Case Law Details

Case Name : Bhagwan Keshu Sakhare Vs ITO (ITAT Pune)
Appeal Number : ITA No.1729/PUN/2018
Date of Judgement/Order : 01/07/2020
Related Assessment Year : 2014-15
Courts : All ITAT (7317) ITAT Pune (249)

Bhagwan Keshu Sakhare Vs ITO (ITAT Pune)

The issue under consideration is whether CIT is correct in denial of exemption u/s 54B of the Act?

In the present case, the case of assessee is selected for limited scrutiny under CASS for the reason of “Deduction claimed under the head capital gains”. After claiming deduction for indexed cost of acquisition and transfer expenses, the assessee computed long term capital gain at Rs.80.84 lakhs. The assessee claimed exemption u/s.54B, inter alia, for a sum of Rs.45.00 lakhs towards a property. The assessment was completed allowing exemption u/s. 54B, inter alia, in respect of the above Rs.45.00 lakhs. Exercising power u/s.263 of the Act, the ld. CIT observed that as against exemption of Rs.45.00 lakhs, a sum of Rs. 35.00 lakhs was neither deposited in the Capital Gain Deposit Account scheme before the stipulated date nor another property was purchased before the prescribed date.

ITAT states that Section 54B of the Act categorically states that the amount of capital gain on transfer of land used for agricultural purposes should not be charged to tax if a new land is purchased within a period of three years or the amount is deposited in a designated capital gain account scheme. Since the assessee failed to satisfy none of these conditions, no exception can be taken to the view canvassed by the CIT in this regard. ITAT, therefore, uphold the impugned order.

In the result, the appeal filed by the assessee is dismissed.

FULL TEXT OF THE ITAT JUDGEMENT

This appeal by the assessee is directed against the order passed by the CIT u/s. 263 of the Income-tax Act, 1961 (hereinafter also called `the Act’) on 30-07-2018 in relation to the assessment year 2014-15.

2. This appeal is time barred by 5 days. The assessee has filed a letter dated 02-11-2018 stating the reasons which led to the late filing of the appeal. We are satisfied with such reasons. The delay is condoned and the appeal is admitted for hearing on merits.

3. The only issue raised in this appeal is against denial of exemption u/s 54B of the Act on a sum of Rs.35.00 lac. Briefly stated, the facts of the case are that the assessee is an individual, whose case was selected for limited scrutiny under CASS for the reason of “Deduction claimed under the head capital gains”. After claiming deduction for indexed cost of acquisition and transfer expenses, the assessee computed long term capital gain at Rs.80.84 lakhs. The assessee claimed exemption u/s.54B, inter alia, for a sum of Rs.45.00 lakhs towards a property. The assessment was completed allowing exemption u/s.54B, inter alia, in respect of the above Rs.45.00 lakhs. Exercising power u/s.263 of the Act, the ld. CIT observed that as against exemption of Rs.45.00 lakhs, a sum of Rs.35.00 lakhs was neither deposited in the Capital Gain Deposit Account scheme before the stipulated date nor another property was purchased before the prescribed date. A show cause notice was issued for which the assessee sought adjournment, which was duly granted. On the next date also, the assessee failed to put in appearance, as a result of which, the ld. CIT set-aside the assessment order directing the Assessing Officer to verify the claim of the assessee made u/s.54B of the Act amounting to Rs.35.00 lakhs. The assessee is aggrieved by such an order.

4. We have heard the rival submissions through virtual hearing and gone through the relevant material on record. The ld. AR fairly admitted that a sum of Rs.35.00 lakhs was neither deposited in the Capital Gain Account scheme nor was it used for purchase of land before the prescribed date. Section 54B of the Act categorically states that the amount of capital gain on transfer of land used for agricultural purposes should not be charged to tax if a new land is purchased within a period of three years or the amount is deposited in a designated capital gain account scheme. Since the assessee failed to satisfy none of these conditions, no exception can be taken to the view canvassed by the ld. CIT in this regard. We, therefore, uphold the impugned order.

5. In the result, the appeal is dismissed.

Order pronounced in the Open Court on 01st July, 2020.

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