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TMI Blog2018 (2) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... his bank account bearing No.4016 with Pune District Central Co Operative Bank Ltd, Dehuroad Branch, Pune. A perusal of bank statement shows that the assessee has received payment in respect of Sugarcane bill on various dates starting from 18.07.2008 to 05.02.2010. The entries in the passbook further supports the claim of assessee that sugarcane was cultivated during the financial year 2008-09 and 2009-10. The land revenue entries in 7/12 extract indicating the crop grown coincides with the payments received by assessee in his Bank account for sale of sugarcane. No infirmity in the order of Commissioner of Income Tax (Appeals) in accepting assessee’s claim of deduction u/s. 54B on the basis of 7/12 extracts, the genuineness of which was never in question. Accordingly, Ground No. 1 raised in the appeal by the Department is dismissed. Claim of deduction u/s.54F - benefit of deduction u/s.54F is with respect to capital gains arising in the hands of wife of assessee which was suo-moto clubbed in the hands of assessee u/s. 64 - Held that:- One of the conditions for claiming deduction u/s. 54F is that claim should have been made in the return of income. Since no such claim was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the order of Commissioner of Income Tax (Appeals), Pune-6 dated 25.02.2015 for assessment year 2010-11. 2. The brief facts of the case as emanating from records are: The assessee is an employee of M/s. Force Motors Ltd., Pune and is also running a life insurance agency of Reliance Life Insurance Company Ltd. (Insurance Agent). The assessee filed return of income for the impugned assessment year on 14.03.2011 declaring total income of ₹ 58,17,230/-. The assessee in the return of income had declared Long Term Capital Gain of ₹ 51,79,319/- after claiming deduction of ₹ 38,11,000/- u/s. 54B of the Income Tax Act, 1961 (hereinafter referred to as the Act ). The assessee was co-sharer of land admeasuring 1H 13R comprising in Gut No.239, Village: Gahunje, Taluka- Maval, Dist.- Pune. After sale of said land, the assessee invested part of his share of sale consideration towards purchase of another piece of agricultural land and thus, claimed deduction u/s. 54B of the Act. 2.1 During the course of scrutiny assessment proceedings, the assessee filed revised computation of income inter alia claiming deduction of ₹ 36,15,000/- u/s. 54F of the Act and expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he name of assessee? 3. Whether on the facts and circumstances of the case, the Ld.CIT(A) was justified in deleting the addition of ₹ 27,646/- on account of interest on housing loan when the claim was not made by filing revised return and that no computation under the head 'income from house property' was shown in the computation of total income? 4. Whether on the facts and circumstances of the case, the Ld. CIT(A) was justified in deleting the addition of ₹ 14,262/- by treating it as agricultural income when the assessee could not substantiate his claim with supporting evidences of having carried out agricultural activities? 5. The appellant craves leave to add, amend or alter any of the above grounds of appeal. 4. Shri Mukesh Jha representing the Department vehemently supporting the findings of Assessing Officer submitted that during the course of scrutiny assessment proceedings, the assessee had furnished copy of 7/12 extracts in respect of land sold and on which the assessee has claimed benefit of deduction u/s. 54B of the Act. The Commissioner of Income Tax (Appeals) merely on the basis of 7/12 extract has granted benefit of deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings of Commissioner of Income Tax (Appeals) and upholding the assessment order. 5. None appeared on behalf of the assessee. The assessee vide letter dated 28.10.2017 waived his right of appearance. However, written submissions have been filed by the assessee. The relevant extract of the same are reproduced herein below: It is true that at the time of initial hearing, the assessee had not with him a 7/12 extract for the year 2006-07, for which, upon requisition by the Ld . A . O., the assessee had applied to the Revenue deptt., for issuing the sa i d extract, vide the assessee's letter acknowledged by the revenue department on 21/12/2012 [paper book page 98 and T 9]. A 7/12 extract . The same was issued by the Tahsildar on 1/02/2013 (Paper book page 99 and T 10 to 12), It may kindly be seen that the details of crops taken right from the years 2000-01 to 2009-10 are described therein by the Tahsildar, Maval, which shows that the sold land was continuously under agricultural operations as back as years 2000-01 to the date of sale. It may be stated that the Ld. Assessing Officer had asked the assessee to produce 7/12 extracts in support of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State Govt. clarifies that any- body [any person] who is not agriculturist can purchase agricultural lands without the prior approval of the District Collector, as per Clause (1) of the Section 63 - 1A ...... and that special permission was granted to the purchaser u/s 63 - 1A by the State Government. This fact, it is submitted, clearly establishes that the land was agricultural land at and up to the time of its sale and therefore the capital gains arising from its transfer were eligible to enjoy the deduction u/s 54B in respect of the agricultural land bought by the assessee within the time limit prescribed in the Act. The relief granted by the kind Ld. Commissioner (Appeals) may therefore kindly be upheld. Regarding deduction u/s 54F claimed in revised computation. A query was raised as to why the amount of capital gains shown in the name of the assessee's wife was clubbed in the assessee's hand, u/s 64. It may be submitted that the pages 219 to 221 of the paper book , contain an opinion given by one Kishor B . Phadke Co . , Chartered Accountants . After considering the history of the land holdings and of the partition of the famil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 2010-11, following conditions should have been satisfied for claiming benefit of deduction u/s. 54B: i. The agricultural land is transferred by any individual. ii. The agricultural land has been used by the individual or his parents for agricultural purpose during two years immediately preceding the date of transfer. iii. The assessee had purchased another agricultural land (rural or urban) within a period of two years after the date of transfer of the original agricultural land to be used for agricultural purpose. iv. If the amount of Capital Gain is not utilized by the assessee for the purchase of another agricultural land before the date of furnishing return of income u/s.139 of the Act, the same should have been deposited before furnishing such return in a notified Capital Scheme account with bank. In so far as conditions in clause (i), (iii) and (iv) are concerned, there is no dispute in the present case. The only dispute is whether agricultural activities were carried out by the assessee on his share of land. The Assessing Officer has raised doubt that the land was not used for agricultural purpose either by assessee or his parents. The revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee in the return of income u/s.139(1) or 139(5) of the Act, therefore, the claim of the assessee cannot be entertained. Further, we find that the claim made by assessee u/s. 54F was in respect of capital gain arising in the hands of wife of the assessee, Smt. Sangita Ramakant Bodke, therefore, the same should have been claimed in the return of income filed by the wife of assessee. The claim of assessee u/s. 54F is liable to be rejected on this ground, as well. We observe that in the written submissions, the assessee has admitted that the claim was made mistakenly. Thus, in view of our above observations and the admission by assessee, the Ground No. 2 raised in the appeal by Department is allowed. 8. In Ground No. 3 of the appeal, the Revenue has assailed the deletion of ₹ 27,646/- on account of interest on housing loan. The Revenue has rejected the claim of assessee on two grounds: i) The claim is not made in the return of income or revised return of income. ii) Since the assessee has not shown any income under the head Income from House Property. Therefore, claim of deduction of interest on house loan cannot be allowed. The Commissioner of Income Tax (Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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