Namdeo Janku Thorat Vs ITO (ITAT Pune)
Summary: The Pune Bench of the Income Tax Appellate Tribunal considered the assessee’s appeal for AY 2012-13 against the order of the CIT(A), NFAC, Delhi, arising from an assessment framed under section 143(3) read with section 263 of the Income-tax Act, 1961. The principal dispute concerned the character of agricultural land at Village Vaki Khurd, Tal. Khed, whether its sale gave rise to taxable capital gains, and whether the assessee could claim deduction under section 54B for purchase of another parcel of land.
The assessee had sold land situated at Village-Vaki for Rs.1,40,00,000/- and had itself disclosed capital gains in the return of income while claiming deduction under section 54B. The original assessment under section 143(3) was completed on 18.12.2014 at an assessed income of Rs.6,20,750/-. Subsequently, the Pr. CIT passed an order under section 263 on 30.03.2017 with specific directions, pursuant to which the AO passed an order under section 143(3) read with section 263 on 20.12.2017 assessing income at Rs.80,00,750/-. The CIT(A) confirmed that assessment order.
The assessee argued that the land sold was agricultural land and therefore did not constitute a capital asset under section 2(14). It was submitted that the description of the land as industrial land in the registered sale deed was a typing mistake and that the description resulted from the fact that the purchasers were non-agriculturists. The assessee also contended that the land purchased at Village Ambethan remained agricultural land despite being described as industrial land, and therefore the investment of Rs.73,80,000/- should qualify for section 54B relief. The assessee further sought refund of Rs.2,15,973/- allegedly offered as long-term capital gains.
