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TMI Blog2018 (12) TMI 1745X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of section 54B(1)(2) of the Act. Since the assessee has not satisfied the basic condition to avail the exemption u/s.54B(1) of the Act as the new asset is transferred before 3 years of its purchase, the capital gain is worked out after deducting the exemption out of such gains so benefited on the transfer of old asset. This, further stipulates that there should be a capital gain of transfer of such land, hence the assessee has invested in his land it will not be further taxable to capital gain as the land is rural agricultural land, it is not a capital asset. Basic condition to avail the exemption has not been fulfilled by the assessee, therefore there is no relevance of the fact that new asset was capital asset or non-capital asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntrary to the provision of law facts. 2. The learned CIT(A) erred in law as well as on facts in confirming the order of AO for withdrawing exemption u/s 54B of the Act amounting to ₹ 14,78,092/-. 3. The learned CIT(A) erred in law in interpreting the legislature providing exemption u/s 54B. 4. The learned CIT(A) failed to understand that dispute is not in respect of original asset, but in respect of new asset. 5. The learned CIT(A) has erred in law as well as on facts in confirming the view of the AO that exemption U/S.54B is allowable only if the new asset purchased is capital asset. 3. Ground N.1 to 5 relates to withdrawing the exemption u/s.54B of the Act amounting to ₹ 14, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t been fulfilled by the assessee. There should be capital gain n transfer of such land, hence, the assessee has invested in a land which will not be further taxable to capital gain as the land is rural agricultural land, which is not a capital asset. Therefore, the new asset has to be eligible asset transfer of which could be subjected to charging of capital gain. The assessee s interpretation would lead to misuse of section 54B, which provides that the benefit of this section would be available if the assessee holds the new asset for a period of 3 years. This requirement can be by passed when the new asset is an asset not chargeable to capital gain tax. Since the assessee has not satisfied the basic condition to avail exemption, hence, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions, but cannot be accepted as appellant himself as not disclosed any capital gain in the A.Y. 2006-07. The decision of ITAT Chandigarh Bench in the case of DCIT vs. Kaushalya Devi in ITA No.1300/CHD/2010 was distinguished on the ground that in that case agricultural land was sold by the assessee and another agricultural land was purchased and subsequently sold. In the case of the appellant, the appellant has not sold any agricultural land and the original asset in the case of the appellant was a capital asset, therefore, the facts of the case are distinguishable. 6. Being aggrieved, the assessee has filed this appeal before the Tribunal. The ld.Counsel for the assessee submitted that the contention of the AO that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, basic conditions of section 54B is not satisfied. The ld.CIT-DR further referred the provisions of section 54B(3) wherein the specific provisions are given that if new asset is transferred within 3 years then the capital gain chargeable to tax in the previous year in which the new asset has been transferred. However, there is not specific provision in respect of section 54B of the Act, hence if the new asset is transferred within the period of 3 years from the date of purchase then the capital gain exemption claimed in respect of old asset would be chargeable to tax for that year in which the old asset was transferred. The reliance in the case of DCIT vs. Kaushalya Devi (supra) is distinguishable on facts and the CIT(A) has rightly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sets sold during the relevant assessment year. The decision in the case of DCIT vs. Kaushalya Devi (supra) has already been distinguished by the CIT(A) as in that case the AO sought to tax the capital gain arising on transfer of new asset in the year in which the new asset was transferred. Therefore, the Tribunal has come to a finding that new asset so transferred is not a capital asset, hence no capital gain chargeable on the same. In view of these facts, we are of the considered opinion that the Lower Authorities have justified in withdrawing the exemption claim u/s.54B of the Act as basic conditions stipulated u/s.54B(1)(2) has not been satisfied. Therefore, this grounds of appeal of the assessee are dismissed. 9. In the result ..... X X X X Extracts X X X X X X X X Extracts X X X X
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