benefit u/s 54B

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 February 2011 Sold agricultural land and within a period of 2 years from date of sale purchased an agricultural land but the land purchased is not from the receipt of land sold, it is through loan, can you claim benefit u/s 54B

Sunil Kr. Sanganeria

Sunil Kr. Sanganeria (Expert)
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01 February 2011 Section 54B provides relief to a tax payer who gets gains on account of sale of agricultural land. The provision u/s 54B provides that tax will not be imposed on long term gains on sale of agricultural land up to the extent gains same is utilised for buying another land for agricultural purpose within two years from the date of transfer.
But the question is whether a tax payer has to spend the same money which he got out of sale or the tax payer just needs to agricultural land within specified period. In my opinion it hardly matterfrom where the money has come.
Recently , Bomaby High Court in CIT vs Dr.P.S.Pasricha has confirmed the decision of Mumbai Tribunal that for claiming benefit under s. 54(1). The same rule apply for 54B also.
law does not make it mandatory that the assessee must use the same funds as received from sale. The source of funds is not relevant

Guest

Guest (Expert)

01 February 2011 It seems that you have not deposited sales proceeds of land so sold in a required bank account etc. and therefore, you can not get benefit u/s 54B.

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