Section 54B of Income Tax Act, 1961— Exemption u/s 54B— In the instant case, Assessing Officer found that the assessee sold agricultural land which results in long term capital gain and after considering the exemption u/s.54B of the same was worked out to “Nil". The Assessing Officer however, held that the profits realized on sale of the land constituted business income and also denied the exemption claimed u/s.54B of the Act.

Held that—The definition of capital asset excludes agricultural land and certain criteria have been placed in this statue to qualify the land as agricultural land. The facts on records demonstrate that both the parties have accepted the land to be an agricultural land. The 7/12 extracts clearly demonstrates the fact that the land to be an agricultural land. The Assessing Officer though agreed the land to be an agricultural land but denied benefit of deduction u/s.54B of the Act to the assessee on the ground that the land was not used by the assessee for agricultural purposes for the preceding two years from the date of transfer of such land. The Assessing Officer has not conducted any specific enquiry to negate the assertions made by the assessee that the land was used for agricultural purposes. As per the 7/12 extracts, kharif season crops were grown on that land.

we do not find any infirmity with the findings of the Ld. CIT(Appeals) and relief provided to the assessee by the Ld. CIT(Appeals) is hereby sustained.[THE INCOME TAX OFFICER, WARD 3 (2) , PUNE. VERSUS SHRI MUKESH CHAMPAKLAL SHAH AND (VICE-VERSA)][2019] 16 ITCD Online (11) [ITAT PUNE]