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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 ..... hort "the AO") dated 28.12.2011 under section 153A(a) of Income Tax Act,1961 (in short 'the Act'). 2. Grounds raised by the assessee read as under: "1. The order passed by the learned CIT(A) is bad in law and contrary 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 Rs. 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 exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has transferred the new asset before completion of 3 years from the date of its purchase, hence, the basic condition to avail the exemption has not 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 passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the capital gain, if any, on transfer of new asset should be taxed in the year of transfer of new asset i.e. AY2006-07 is in line with the provisions, 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 assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghtly withdrawn the exemption claimed by the assessee as the new asset was sold before 3 years from the date of its purchase. Therefore, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. Therefore, the withdrawal of exemption would be made in respect of long term capital gain chargeable on old assets 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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