K.M. Joseph, J.

1. Appellant returned nil income for the assessment year 2005- 2006. Acting on information that the assessee had transacted a property on 05.11.2004, the assessment was reopened. Appellant had 1/4th share in 1.10 acres of land in Ayyanthole Village. The same was sold for .44 lakhs on 14.11.2004.The assessee received `.11 lakhs as her share. In her return, she computed her capital gain at nil after claiming indexation on cost of acquisition and cost of improvement and further claiming exemption under Section 54F of the Income Tax Act (hereinafter referred to as the Act) on the basis of a property purchased at Koothattukulam, a farm house with 1.92 acres of land for `.11 lakhs on 28.3.2005. During the course of the assessment proceedings, the appellant took up the contention that she is entitled to exemption under Section 54B of the Act. The tribunal has affirmed the findings of the authorities that the appellant is not entitled to the benefit of Section 54B for the reason that the property at Ayyanthole Village which she sold was not used for agricultural purposes for a period of two years prior to the date of the sale as required under Section 54B of the Act. It is the further finding of the tribunal that the appellant is entitled only to take `.2 lakhs as the cost of acquisition over and above `.1 lakh allowed as value of super-structure under Section 54F of the Act. It is being aggrieved by the same that the appellant is before us.

2. The following substantial questions of law have been raised in the Appeal Memorandum:

"i. Whether the sale proceeds of the land at Ayyanthole were within the scope of Section 54B of the Income Tax Act?

ii) Whether the cost of improvement of the land that was sold should have been determined at Rs.3,50,000/= ?

iii. Whether the subsequent purchase of land I (at Koothattukulam) in which a farm house is situated satisfied the requirements of Section 54F and/or Section 54B and thus there was no liability to pay any long term capital gains tax on the sale of land atAyyanthole, in the Assessment Year 2005-06 ?".

3. We heard Shri G. Sarangan, learned senior counsel for the appellant and also Shri Jose Joseph, learned counsel appearing for the Department.

4. Learned senior counsel for the appellant would submit that the approach of the tribunal in denying the benefit of the exemption under Section 54B is unsupportable. There were materials before the authorities indicating that the land at Ayyanthole was indeed being put to agricultural use for a period of two years. In this regard, he drew our attention to certain photographs showing coconut trees. He also relied on the receipt for the water cess. Further more, he drew support from the certificate of the village officer. We find that the certificate from the agricultural officer is also referred to in the order of the tribunal. A copy of the certificate from the agricultural officer was made available to us by the appellant. It is further pointed out that a receipt was produced from the Electricity Board and it was contended that the connection was an agricultural one. He would point out further that the tribunal and the authorities have taken into consideration irrelevant facts. In this regard, he would point out that the fact that the purchaser of the property at Ayyanthole had converted the land and an apartment complex was set up, should not have weighed with the authority in denying the benefit under Section 54B of the Act. The assessing officer also finds that it cannot stand to reason that an agricultural property lying right under the nose of the District Administration could be converted into a commercial complex without any issues. According to the appellant, what is relevant is the use to which the land was put as provided. Still further more, he would submit that the fact that the appellant had not originally set up the claim under Section 54B could not disentitle her from claiming the benefit under Section54B, i