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I-T - Absence of agricultural occupation within two years from sale of land, makes it ineligible for Section 54B benefits: HC

 

By TIOL News Service

JAIPUR, MAY 02, 2018: THE ISSUE BEFORE THE DIVISION BENCH IS - Whether carrying out no agricultural activity on the land within two years from the date of sale of land, makes it ineligible for exemption benefits of Section 54B. YES IS THE VERDICT.

Facts of the case:

The Assessee is an individual. In his computation of return, the assessee has shown chargeable long term capital gain at NIL after claiming deduction u/s 54B of Rs. 25,14,850/- against the investment made in purchase of land of Rs. 28,92,480/-. However, the AO noted that the agricultural land sold out during the year under consideration were given on contract Batai to agriculturist and taken one time payment for year as per practice here Girdawari indicating nature of crops sowed by the Kastkar cultivator was known as Mulla Ji of Kesarpur village adjoining to the Bhugore as per past practice. Since the assessee had taken one time payment no other details was given of the buyer of produce, there was no option to examine the lands sold were being used by the assessee within two years immediately preceding the transfer took place except the Khasra Girdawari furnished in the case of his brother for the same A.Y who also sold their share of lands in similar Khasra's. From the details, the AO observed that the land pertaining to Khasra No. 887 was being used for agricultural activates/purposes within two year from the date of transfer. However, the remaining land of Khasra No. 890 had remained vacant within the period of two years from the date of transfer of plots out of it. Thus, out of the claim of total deduction u/s 54B of Rs. 28,92,480/-, the deduction to the extent of Rs. 9,01,.322/- was withdrawn on account of land sold which was not being used for agricultural purposes within last 2 years. Such finding was confirmed by the CIT(A) as well as the Tribunal.

High Court held that,

++ it is seen that the Tribunal while considering the matter has observed that, it is admitted fact that there was no agriculture activity on these lands in the two preceding years from the sale of the land. Therefore, there is no alternate but to confirm the findings recorded by the CIT(A) on this issue. This Court is in complete agreement with the view taken by the Tribunal.

(See 2018-TIOL-811-HC-RAJ-IT)


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