S.S. Viswanethra Ravi ORDER
S.S. Viswanethra Ravi, Member (J)
1. This appeal by the assessee against the order dated 10-08-2018 passed by the Commissioner of Income Tax (Appeals)-1, Aurangabad ['CIT(A)'] for assessment year 2009-10.
2. I find no representation on behalf of the assessee nor any application filed seeking adjournment. Thus, the assessee called absent and set ex-parte. Therefore, I proceed to dispose of the appeal by hearing the ld. DR and perusing the material available on record.
3. The assessee raised six grounds of appeal challenging the action of CIT(A) in confirming the order of AO in denying exemption u/s. 54B of the Act and disallowance of improvement cost in the facts and circumstances of the case.
4. I note that according to the AO, 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.
5. Heard ld. DR and perused the material available on record. The AO opined that land belong to the assessee is barren land as per 7/12 extract and the finding of CIT(A) that the said land is within 8 K.M. from the Municipal area of Jalna falling u/s. 2(14)(iii)(b) of the Act. I find there is no evidence brought on record by the AO to show that the land belonging the assessee is within 8 K.M. from the Municipal area of Jalna and has population not less than 10,000. The AO before treating the said property as non-agricultural land, no evidence whatsoever brought on record issued by the competent authority that the land falling within 8 K.M. from the Municipal area of Jalna, has population less than 10,000. The AO should have enquired independently from the concerned competent authority to find out whether the said property is within 8 K.M. from the Municipal area of Jalna has population less than 10,000. In this regard, I find the AO did not even ask the assessee to furnish the said details. On perusal of assessment order, I note that the AO simply noticing that the said land is barren land treated the same as non-agricultural land without any evidence in support of its claim. It is pertinent to note that a barren land could transform into fertile land provided irrigation facilities, therefore, I am unable to subscribe to the view of AO that the barren land is a non-agricultural land. Admittedly, the compensation granted by the Government of Maharashtra for compulsory acquisition of land is non-taxable, but however an incorrect deduction u/s. 54B of the Act was claimed which was denied only on the ground that no deposits were made in the capital gains accounts.
6. I find Shri S.N. Puranik, CA filed paper book containing 40 pages, on perusal of the same 7/12 extract of assessee's agricultural land is provided at page 4. According to which it is noted that the said land was in cultivation from 2002-03 to 2007-08. The ld. DR did not dispute the same. Though it was alleged as barren land, was in cultivation during immediately two prece........