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TMI Blog2025 (1) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... s with respect to this aspect and the AO has in our view omitted to enquire into this crucial aspect. Another aspect on which there was failure on part of the AO to make due inquiries was that a sum had been paid by the assessee towards obtaining relinquishment rights from third parties, and the AO had not made due inquiries whether this amount was eligible for claim of deduction u/s 54B of the Act. We observe that PCIT had also obtained report from the concerned Government Authority / agency to substantiate that no agricultural activities were being carried out between the years 2014 to 2018 in respect of both the properties which was sold by the assessee and also the property which was subsequently purchased by the assessee with respect t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law and or on facts in invoking the provisions of revision u/s 263 of the Act and holding that the order of original assessment passed u/s 143(3) on 09.07.2019 by AO was erroneous and prejudicial to the interest of Revenue in so far as the same related to deduction u/s 54B. The ld. Pr. CIT-3 A bad has grievously erred in law and or on facts in holding that the AO had not carried out examination in respect of exemption u/s 54B during the assessment proceedings. 2.2 That in the facts and circumstances of the ld. Pr. CIT-3 A bad has grievously erred in law and or on facts in invoking the provisions of revision u/s 263 and in holding that the AO had not carried out examination in respect of exemption u/s 54B during the assessment proceedings. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, which according to PCIT were not examined by the Assessing Officer. Firstly, in order to claim deduction under Section 54B of the Act, the first condition is that the land which was sold was being used for agricultural purposes for two years immediately preceding the date on which the transfer took place. During the course of 263 proceedings, the PCIT observed that assessee submitted copies of computation of income for A.Ys. 2018-19 and 2019-20 and also 07/12 abstract. However, PCIT observed that while the assessee had sold the land on 26.10.2016, whereas the assessee submitted computation of income for A.Ys. 2018-19 and 2019-20 showing agricultural income offered to tax, which are for succeeding assessment years and therefore, this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r agricultural purposes . However, PCIT observed that while making purchase of new land on which deduction under Section 54B was claimed, the assessee made payment of Rs. 8,33,333/- to the original agricultural land owner and made another payment of Rs. 57,66,666/- to the confirming parties for relinquishment of their rights in their said agricultural land. Therefore, PCIT was of the view that this amount of Rs. 57.66 lakhs had not been spent for purchase of agricultural land but for relinquishment of rights of the confirming parties . The assessee submitted during the course of 263 proceedings that this amount of Rs. 57,66,666/- had been made to the confirming parties on the direction of the land owner, since the land owner had entered int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used for agricultural purposes prior to it s conversion into non-agricultural land. The Counsel for the assessee submitted that the assessee has also grown Castor Seeds and Brinjal on this land prior to it s sale. 6. In response, the Ld. D.R. submitted that the land was not put to agricultural use prior to it s sale and the assessee has not been able to demonstrate that the land was used for agricultural purposes prior to this sale. This crucial aspect was not examined by the Assessing Officer. Secondly, the Assessing Officer was also failed to enquire into the crucial aspects that part of the purchase was paid towards obtaining relinquishment right from the confirming parties and the Assessing Officer had not enquired into this aspect. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment Authority / agency to substantiate that no agricultural activities were being carried out between the years 2014 to 2018 in respect of both the properties which was sold by the assessee and also the property which was subsequently purchased by the assessee with respect to which deduction under Section 54B of the Act was claimed. We observe that the Counsel for the assessee has cited several case laws, however, we are not discussing the same in the present order since those judicial precedents have been rendered with regards to their own set of facts and have no bearing to the issue under consideration before us. 9. In the case of Ramanbhai Bholidas Patel vs. Principal Commissioner of Income-tax [2023] 148 taxmann.com 92 (Ahmedabad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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