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TMI Blog2019 (4) TMI 1420X X X X Extracts X X X X X X X X Extracts X X X X ..... lands, made by the assessee consequent to selling of one agricultural land. In case, the assessee had sold two pieces of land, i.e. agricultural land, then it could claim the deduction against the aforesaid investments in two separate pieces of land. However, in the present case, it is not so. Hence, I find no merit in the plea of the assessee. Ratio of decisions in SMT. SAVITA RANI. [ 2002 (5) TMI 6 - PUNJAB AND HARYANA HIGH COURT] Anil Bishnoi Vs. ACIT [ 2017 (10) TMI 868 - ITAT CHANDIGARH] are not applicable in facts of assessee. - ITA No.3012/PUN/2017 - - - Dated:- 28-12-2018 - Ms. Sushma Chowla, JM For the Appellant : Shri Aniruddha A. Andhorikar For the Respondent : Shri M.K. Verma ORDER PER SUSHMA CHOWLA, JM: The appeal filed by the assessee is against the order of Commissioner of Income Tax (Appeals) 1, Pune dated 28.09.2017 relating to assessment year 2013-14 against order passed u/s 143(3) of the Income Tax Act 1961 (in short the Act ). 2. The assessee has raised the following grounds of appeal : 1. The Learned CIT(A) did not give the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from PPF of ₹ 1,02,098/-, dividend income of ₹ 200/- which was claimed as exempt. The Assessing Officer was of the view that in view of the provisions of section 14A of the Act read with Rule 8D, the disallowance of expenses on the investments made is to be disallowed. Hence, the disallowance was made under Rule 8D(2)(iii) of the Act @ 0.5% of the average investments at ₹ 24,585/-. The CIT(A) upheld the aforesaid disallowance in the hands of the assessee. 5. On the perusal of record and especially the assessment order, it is clear that the Assessing Officer had failed to record any satisfaction before invoking the provisions of section 14A of the Act. Admittedly, the assessee had not disallowed any part of the expenditure being relatable to the exempt income but section 14A(2) lays down that the AO shall determine the amount of expenditure incurred in relation to such income which does not form part of the total income under the Act, if, the Assessing Officer, having regard to the accounts of the assessee, is not satisfied with the correctness of the claim of the assessee in respect of such expenditure relatable to the exempt income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ej Boyce Manufacturing Company Ltd. Vs. DCIT (supra) and also the clear cut provisions of the Act, i.e. section 14A(3) of the Act, there is no merit in the disallowance made by the Assessing Officer without giving any show cause notice to the assessee before invoking the provisions of section 14A of the Act. Hence, the disallowance made by the Assessing Officer and confirmed by the CIT(A) is reversed. Grounds of appeal No.3 4 raised by the assessee are thus allowed. 8. The next issue raised vide Grounds of appeal No.5 and 6 is against the interpretation of provisions of section 54B of the Act and denying the benefit of deduction under the said section. 9. Briefly in the facts of the case, the assessee during the year under consideration had sold the agricultural land situated at Mauje Bhugaon, Pune for a total consideration of ₹ 1,05,00,000/-. The land was purchased on 15-11-1988. The assessee computed the indexed cost of acquisition of the said land and against the capital gains so determined, claimed the benefit of deduction under section 54EC of the Act against the investment made of ₹ 50,00,000/- in Capital Gain Bond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he issue raised vide Grounds of appeal No.5 6 is in respect of claim of deduction under section 54B of the Act wherein admittedly, the assessee had sold agricultural land and had further made investment in two separate agricultural lands. The assessee purchased two agricultural lands in different locations but both in District Belgaum and the question was whether the assessee could claim the aforesaid benefit under section 54B of the Act, wherein it talks about capital gains arising from transfer of capital asset, being a land which was being used by the assessee for agricultural purposes and if the assessee has within a period of two years, after that date, purchased any other land for being used for agricultural purposes, then the assessee is entitled to the deduction as per the formula provided in (i) and (ii) of the sub-section. If the provisions of clauses (i) and (ii) are read, it talks about the amount of capital gain which is greater than the cost of land so purchased, then the difference between the amount of capital gain and cost of new asset is to be charged under section 45 as income of the previous year but in case, the capital gain is equal to or less than the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. It is not a case wherein two agricultural lands were purchased and the same were allowed as deduction under section 54B of the Act. Hence, the said ratio is not applicable to the facts of the present case. Accordingly, I find no merit in the plea of the assessee 14. The learned Authorized Representative for the assessee has also placed reliance on the decision of Chandigarh Bench of the Tribunal in Anil Bishnoi Vs. ACIT (2017) 167 ITD 381 (Chandigarh) wherein the issue was also a sale of agricultural land and claim of deduction under section 54B of the Act. The assessee had then purchased two agricultural lands, one through sale deed and another through agreement to sale. The AO had denied the benefit of section 54B of the Act against the agricultural land purchased through agreement to sale. The Tribunal decided the issue and held that even where the land is purchased through agreement to sale is investment and amounts to purchase. However, the Tribunal has not addressed the issue of whether the assessee was entitled to claim the aforesaid deduction under section 54B of the Act against the purchase of two agricultural lands. Hence, the proposition laid down by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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