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TMI Blog2024 (5) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the land being fit for agriculture. The other infirmity we observe in the impugned order is that it is not proper for the ld. Pr.CIT to have held that the assessee is not eligible for a claim u/s. 54B of the Act, followed by direction for a de novo examination and adjudication in accordance with law per a speaking order. This is dichotomous. Accordingly, the first sentence in para 7 of his order the words is not eligible be read as may not be eligible . The material gathered by the Revenue may though; rather, ought to be, put across to the assessee, who is to establish his claims, leading evidence. See SMT. ASHA GEORGE [ 2013 (1) TMI 545 - KERALA HIGH COURT] The ensuing assessment would accordingly be sustainable only on the basis of finding/s of fact, i.e., as to whether the facts admit of, or not, a claim u/s. 54B. We may also clarify that we may not be construed as having expressed any opinion in the matter, except that the AO s enquiry is seriously wanting, and there had thus been no proper verification and examination of the assessee s claim by him, finding each of the several objections as highlighting the various aspects of the matter which ought to have been, but wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he properties purchased by the assessee for availing exemption u/s. 54B are agricultural and used exclusively for agriculture. The genuineness of the transaction was also enquired into by the ld. Pr.CIT, causing physical inspection of the land/s purchased and sold by the assessee, through his Inspector, whose report is extracted at para 6.4 (pgs. 9-11) of his order. The same points to several infirmities in the assessee s claim, viz.: (a) The land purchased for Rs. 1.18 crore was not fit for agricultural use; (b) The agreement dated 06.08.2018 for purchase of the second land for Rs. 6.91 crores was not per registered Deed but on a stamp paper of Rs. 100; non-compliance of the provision of s. 54B(2) for the Act qua utilization of capital gains in relation to the second purchase of Rs. 6.91 crores. (c) Non-completion of the said purchase; the agreement dated 06.08.2018 expired on 05.07.2018, followed by another agreement dated 30.06.2020, and which again expired on 30.06.2021. The transaction is doubtful also considering the fact that Mrs. Fatima, the seller of the land, also claims exemption u/s. 54B of the Act; and (d) The said land is also not fit for agricultural use. The assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2008] 306 ITR 52 (SC), confirming the decision by the Hon'ble High Court reported at [2008] 306 ITR 49 (Del), it was explained that the Tribunal could not have substituted it s own reasons which were required to be recorded by the AO, and ought to have remanded the matter to the latter. Sure, there must thus be circumstances which would make the enquiry prudent, and not de hors the same, even as explained in CIT v. Gabriel India Ltd. [1993] 203 ITR 108 (Bom), the same being an objective fact which must be satisfied on the basis of the material on record. This in fact is captured by the words: which should have been made occurring in Explanation 2(a) to s. 263(1) with reference to any inquiry or verification by the AO. 4.2 Section 54B of the Act, claim for deduction under which has been directed for verification and examination in the set aside proceedings, reads as under: Capital gain on transfer of land used for agricultural purposes not to be charged in certain cases. 54B. (1) Subject to the provisions of sub-section (2), where the capital gain arises from the transfer of a capital asset being land which, in the two years immediately preceding the date on which the transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin the period specified in sub-section (1), then, (i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of two years from the date of the transfer of the original asset expires; and (ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid. 4.3 The assessee s case before us was that the relevant enquiry had been made by the AO, who though did not write an elaborate order, and which should not therefore prejudice the assessee. The argument is valid in principle. As afore-noted, lack of inquiry is an indicator of non-application of mind, vitiating the order. We may further clarify that inquiry is in fact only the beginning of the verification process, and is to be followed by due examination and issue of finding/s based on materials and explanations furnished, i.e., subject the return to due process. The matter is principally factual, and no hard and fast rule/s, by the very nature of the process, laid down, even as we observe the assessment order as sub silentio qua each of the aspects, germane to the assessee s claim, emphasized by the ld. Pr. CIT. 4.4 The issue before us, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes, and it could well be that due to certain accentuating factors, it becomes not feasible, even as explained by the assessee per its statement of facts before us. The same, if anything, again confirms absence of enquiry inasmuch as this explanation ought to have been, on being subject to verification and consequent enquiry, before the AO, and not the revisionary authority or the appellate authority in appeal against his order.] 5.1 Apart from a clear absence of pertinent enquiry into the several specific aspects of the matter, the assessment is not per a speaking order, a sine qua non for a judicial order. We, accordingly, find the impugned order as valid in principle. We are, though, not in agreement with the ld. Pr. CIT, where he expresses an apprehension as to the fitness of the land sold for agricultural purposes. The only aspect relevant, even as pointed out by him, is if it was indeed put to use for agricultural purposes in the two-year period prior to sale (s. 54B(1)). The requirement being stricter than of the subject land being agricultural, and which would require being positively satisfied, subsumes the requirement of the land being fit for agriculture. The other ..... X X X X Extracts X X X X X X X X Extracts X X X X
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