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TMI Blog2025 (2) TMI 487X X X X Extracts X X X X X X X X Extracts X X X X ..... and and consequent exemption u/s. 54B cannot be denied.
Assessee purchased agricultural land out of the Capital Gain and further deposited a sum of Rs. 60.00 lacs in Capital Gain Scheme, which was on withdrawal offered for taxation. Assessee has produced the copies of the return which is not disputed . X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to the assessee, capital gain arose on sale of agricultural land, assessee purchased another agricultural land for a consideration of Rs. 15,00,000/- on 11.09.2012. This was stated to be agricultural land and, therefore, exemption u/s.54B of the Act was claimed. The assessee also deposited a sum of Rs. 60,00,000/-in Capital Gain Account Scheme by placingsix deposits of Rs. 10,00,000/- each on 11.08.2012 for unutilized sums. Therefore, the assessee claimed that on sale of agricultural land, the capital gain arising thereon has been partly utilized by purchase of an agricultural land and partly by depositing the same before the due date for furnishing of the return of income u/s. 54B(2) of the Act. Therefore, out of the total Capital Gain of Rs. 78,71,504/-, the assessee claimed deduction u/s. 54B of the Act of Rs. 77,31,800/-. 8. Subsequently, as assessee could not utilized sum of Rs 60 lakhs for purchase of agricultural land, in A.Y. 2014-15, the assessee offered Rs. 60,00,000/-, which was deposited u/s. 54B(2) of the Act withdrawing the same on 12.09.2013 and offering the same amount to tax under the head Long Term Capital Gain. Thus, the Long Term Capital Gain claimed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestioned why deduction u/s.54B of the Act should not be allowed. 10. The assessee reiterated the facts stated above and claimed that the land was used for agricultural purposes in the above two assessment years. Assessee further referred to A.Y. 2011-12 return of income wherein the agricultural income of Rs. 14,000/- were shown. Therefore, it was submitted that the land was used for agricultural production as per the report of halka Patwari clearly shows that the deduction is available u/s. 54B of the Act. 11. The learned Assessing Officer found the explanation of the assessee untenable and stated that only certain portion of the land had Gwar plantation and during the current year assessee has not shown any agricultural income, therefore, the claim of the assessee is not maintainable. 12. The assessee also preferred an application u/s.144A of the Act, wherein the assessee did not get any relief. 13. Thus, the learned Assessing Officer disallowed the exemption claimed u/s.54B of the Act of Rs. 77,31,800/-. 14. On appeal before the learned CIT(A) for the reasons given by the Assessing Officer, the order of the Assessing Officer was upheld. Therefore, the assessee is in appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee deserves to be allowed. 17. The learned Departmental Representative (D.R.) vehemently supported the orders of the learned lower authorities and stated that the agricultural activities on the land are not proved by the assessee but only in miniscule part the agricultural activities are stated to be carried out. Thus, if the land has not been used for agricultural activities for last two years, the claim of the assessee has been correctly disallowed. He submitted that when Section 54B of the Act itself does not apply to the assessee the claim of deposit in capital gain account scheme or purchase of another agricultural is also not applicable. 18. We have carefully considered the rival contention and have perused the orders of the learned lower authorities. The solitary issue in this appeal is whether assessee is entitled to deduction u/s. 54B of the Act. 19. According to the provisions of Section 54B of the Act if the assessee earns any long term capital gain from the transfer of agricultural land which is used for agricultural purposes in immediately preceding two years and purchases, within a period of two years from the date of the transfer and new agricultural land to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceding the date of transfer. For the purposes of Section 54B of the Act, it is not necessary that the whole of the land should be continuously used for agricultural purposes for full two years immediately preceding the date of transfer. It would be sufficient if in the two years, the land is to be used for agricultural purposes. The plain language of Section 54B of the Act does not support the view that the land should be used for two years continuously and wholly. We draw support from the decision of the Hon'ble Punjab and Haryana High Court in the case of CIT vs. Dinesh Verma (2015) 60 taxmann.com 461. Undisputedly the assessee has shown agricultural income for earlier years which is demonstrated that for A.Y. 2011-12 the agricultural income of Rs. 14,000/- is shown. It is not the case of the Revenue that the land being sold by the assessee was not agricultural land or was being used for any other purposes but assessee claims it to be agricultural land. The grievance of the revenue is that part of the land is used for agricultural purposes but assessee claims deduction u/s 54 B of the Act on whole of the land. It is fact that whole parcel of the land was an integrated asset. Even ..... X X X X Extracts X X X X X X X X Extracts X X X X
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