2008 (4) TMI 28

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....se of the respondent-assessee for the Block Period 01.04.1988 to 15.07.1998 by raising the following substantial question of law:-Whether on the facts and law, the Hon'ble Income Tax Appellate Tribunal was justified in allowing deduction u/s 54B of the Income Tax Act, 1961 in respect of agricultural land purchased in the name of son of respondent/assessee when Section 54B stipulated investment of capital gain in purchase of another agricultural land by the assessee? 2. In the present case, the respondent is an illiterate agriculturist. During the search which was conducted in the business premises of M/s S.S. Property Dealer on 15.07.1998, an agreement to sell dated 26.03.1997 was seized. The said agreement revealed that Gurnam Singh (re....

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....stion was purchased by the assessee in the name of his son. The learned Assessing Officer disallowed the deduction on the ground that the land is in the name of the son of the assessee, so the deduction cannot be allowed, specially when the land was purchased by Sh. Gurnam Singh out of the sale proceeds of agricultural land and since Palwinder Singh was bachelor and was not having any independent source of income was dependent upon his father even for livelihood. The conclusion of the learned Assessing Officer is available on page 4 of the assessment order. Before coming to a conclusion, we are supposed to analyze section 54B which is applicable where the capital gains arise from the transfer of capital asset and was being used for agricult....

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.... The only dispute raised by the revenue is that the land was got registered in the name of his son. This fact is not disputed that the assessee was an old and illiterate person and never filed any return. At the same time, he was not having any other source of income also. It is not the case that the sale proceeds were used for any other purposes or beyond the stipulated period. This fact was also not disputed that the son of the assessee was bachelor and was not having any other source of income and was totally dependent upon his father. Undisputedly, the earlier land which was sold, also belonged to the assessee and the sale proceeds were also used for purchasing agricultural land. The possession of the said land was also taken by the ass....