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TMI Blog2023 (3) TMI 1045X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Decided in favour of assessee. - ITA No. 561/Ahd/2020 - - - Dated:- 22-3-2023 - Ms. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Assessee : None For the Revenue : Smt. Trupti Patel, Sr. D.R. ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This is an appeal filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals-4), Vadodara, in proceeding u/s. 143(3) vide order dated 22/09/2020 passed for the assessment year 2017- 18. 2. The assessee has filed the following grounds of appeal:- 1. The Ld. CIT (Appeals) erred in ignoring the submission and the decision relied upon by the appellant during the course of appellate proceedings. 2. The Ld. CIT (Appeals) erred in disregarding the decision of the Hon'ble IT AT Amritsar in the case of DCIT ANR Vs. ASSA Singh ANR and also disregarding the Circular No.359 dated 10.05.1983 which was quoted by the appellant during the course of appellate proceedings. 3. The Ld. CIT (Appeals) erred in confirming the addition based on the decision of the Hon'ble IT AT, Ahmedabad in the case of Paras Chinubhai Jani Vs. Pr.CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of aforesaid properties since 2011 and it was this advance so received by the assessee, which was utilised for the purchase of new agricultural property, which was finally registered on 21-10-2016. Further, the assessee submitted a table before Ld. CIT(Appeals) to the effect that advances so received by the assessee toward sale of properties were utilised by the assessee for giving advance towards purchase of new agricultural land. As per the table submitted before Ld. CIT(Appeals), the contention of the assessee was that the assessee had received a total amount of ₹ 2.20 crores as advance towards sale of aforesaid properties two (though sale deeds were registered on 10-08-2016 for ₹ 1.04 crores and 20-03-2017 for ₹ 1.90 crores respectively) from 14-07-2011 to 24-09-2015 through account payee cheques and this advance was utilised towards giving advance towards purchase of new agricultural land in various instalments amounting to ₹ 1.77 crores between the period 14-10-2015 to 11-11-2016, again through account payee cheques. Therefore, the contention of the assessee is that the advance of ₹ 2.20 crores received toward sale of properties (from 14-07- 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culture land situation at survey No. 701, at Mogri on 21.10.2016. From the above, it is clear that the assessee had purchased new agricultural land before the sale of original agricultural land. The A.O. ha further mentioned that as per section 54B of the I.T. Act, 1961, the deduction on long term capital gains from sale of old agricultural land is allowable if he long term capital gains is invested by the assessee in another land (being used for agricultural purposes) within 2 years after the date of transfer of original and (sold land). From the above, it is clear that in order to claim deduction us 54 the new set has to be required within sears from the date of sale of agricultural land. Therefore AO has restricted the claim of deduction us 543 to Rx 99,21,759 On this issue. Hon ble ITAIT Ahmedabad has delivered its judgment which is squarely applicable to the facts of the present case ITAT Ahmedabad in case of Par Chinubhai Jani Vs Principal Commissioner of Incomes Vs. Ahmedabad reported in 177 ITD 91 held that the eligibility of deduction us S4B of the Act in respect of land acquired prior to transfer of capital asset is clearly opposed to the plain provision of the Act and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le of interpretation may not be required to be applied. The Supreme Court in this case observed as under: This being the case, it is obvious that the beneficial purpose of the exemption contained in Section 3(1)(b) must be given full effect to, the line of authority being applicable to the facts of these cases being the line of authority which deals with beneficial exemptions as opposed to exemptions generally in tax statutes. This being the case, a literal formalistic interpretation of the statute at hand is to be eschewed. We must first ask ourselves what is the object sought to be achieved by the provision, and construe the statute in accord with such object. And on the assumption that any ambiguity arises in such construction, such ambiguity must be in favour of that which is exempted. Consequently, for the reasons given by us, we agree with the conclusions reached by the impugned judgments of the Division Bench and the Full Bench. 6.1 The Gujarat High Court in the case of Kishorbhai Harjibhai Patel v. ITO [2019] 107 taxmann.com 295 (Gujarat) held that section 54F is a beneficial provision and is applicable to an assessee when the old capital asset is replaced by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rival submissions. The assessee has filed copy of the sale deed dated 19.2.2009 in the paper book in which it is specifically mentioned that assessee received various advances from the purchasers on different dates in the year 2007 before execution of sale deed. According to the chart prepared by the Ld. Counsel for the assessee, upto November 2007, the assessee has received advance money of Rs. 4,63,35,060/-. It would, therefore, prove that purchaser has paid substantial amount to the assessee as advance money as against total sale consideration of Rs. 5.64 crores. No purchaser would make such a huge advance without taking the possession of the land. The contention of the assessee, is therefore, correct that assessee has handed over the possession of land to the purchaser sometime in April 2008 otherwise the purchaser would not make the huge advances to the assessee. It is also proved that when substantial amount was received against the sale of land, it is available to the assessee for making investment in purchases of land. The assessee claimed that he has made investment of Rs. 51,80,000/- in the purchase of another land vide purchased deed dated 9.6.2008. Therefore, author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived for the purpose of buying agricultural land. In the present case, the assessee sold agricultural land was not disputed by the AO and also purchased agricultural land. The CIT (A) in his order had given a finding that though the sale deed was executed on 30.12.2008, but the possession was given on 10.09.2008. He had also observed that the sale deed had to be executed on or before four months from the date of agreement. There were certain dispute between the assessee and the purchaser. Therefore, the execution of sale deed was delayed and the sale deed was executed in December, 2008. So far as the objection raised by the revenue was that the property was only transferred in December, 2008, therefore, the property purchased before that date was not eligible for claiming deduction u/s 54B. It was opined, this was only a hyper technical objection raised by the revenue, because, the assessee had received substantial amount from the purchaser before executing sale deed. It was held that so far as registration of the sale agreement was concerned, if both the parties proceeded to carry the execution of the sale as per the agreement whether it was registered agreement or not, there was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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