Wrong claim of assessee should be assisted by authorities in assessment proceeding

Kishor Ganpatrao Karande Vs ITO (ITAT Pune)

ITAT Pune held that that the authorities under the Act are required to assist the assessee in the assessment proceedings by giving effect on the correct position of law, even if the assessee makes wrong claim. Hence, assessee is entitled to claim the same as exempted u/s. 10(37) of the Act instead of deduction u/s 54B of the Income Tax Act.

Facts-

The assessee is an individual and an agriculturist. The Government of Maharashtra acquired the land belonging to the assessee admeasuring 1H 21R and paid compensation to the assessee. The AO opined that as per 7/12 extract that the said land is barren land and situated within 8 K.M. from the Municipal area of Jalna. The AO treated the said land as non-agricultural land within the meaning of provisions of section 2(14)(iii)(b) of the Act. Further, he found that the assessee did not utilize the amount of capital gain in purchasing of new asset before filing of return of income u/s. 139(1) of the Act, even not deposited in any capital gains accounts scheme. The assessee contended that he is illiterate, no knowledge of Income Tax technicalities but taken FDR. Having not satisfied with the contention of the assessee, the AO proceeded to deny exemption u/s. 54B of the Act. Further, he disallowed improvement cost for non-filing of documentary evidence. Before the CIT(A), I find the same contention was reiterated by the assessee in support of claim u/s. 54B of the Act. The CIT(A), however, confirmed the view of AO in denying exemption u/s. 54B of the Act, upheld the disallowance made by the AO towards improvement cost for want of evidence.

Conclusion-

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