DCIT Vs Bhupinder Singh Bhalla (ITAT Delhi)
ITAT Delhi held that exemption under section 54B of the Income Tax Act allowed since assessee is able to prove the nature of land as agricultural land based on revenue records and income tax return, wherein, income accepted as agricultural income.
Facts- The case of the assessee was selected for scrutiny assessment through CASS for scrutiny of substantial increase in capital in a year; large deduction claimed u/s. 54B, 54C, 54D, 54G, 54GA and large long term capital gain.
Notice u/s. 143(2) of the Act dated 22.06.2016 was served on assessee. Subsequently, notices u/s. 142(1) dated 10.07.2018 and 06.09.2018 were served on assessee. On completion of assessment proceedings, AO vide order dated 30.12.2018 made addition of Rs.41,71,72,652/-. Against order dated 30.12.2018 of AO, assessee filed appeal before CIT(A) which was allowed vide order dated 25.08.2023. Being aggrieved, the appellant/revenue preferred present appeal.
Conclusion- Once the assessee establishes that the land in question was assessed to land revenue and was continuously used for agricultural purposes, a prima-facie presumption arises from such user is that the land in question continued to be agricultural land. The price paid or received and/or the situation of the particular land in a well-developed area do not displace that presumption. The presumption can be rebutted only by showing that the land was not agricultural land and the current user of the land was a stop-gap arrangement pending some other user. Even the effect of the amendment i.e., amendment in Section 47(viii) of the Act with effect from 01.03.1970 is that the transfer of urban agricultural land will make the gains thereby earned exigible to the levy of capital gains tax but, in order to mitigate the hardship, capital gains on transfer of such urban agricultural land enjoys exemption under Section 54B of the Act if the conditions specified therein are fulfilled.
