TaxTMI 
TaxTMI 
2020 (5) TMI 349
X X X X Extracts X X X X
X X X X Extracts X X X X
....registered Agreement/VisarPavti as not valid & has erred in holding the same not being in compliance with the Transfer of Property Act & has also erred in considering the possession being not given & has failed to consider the Affidavit filed by the legal heirs/family members of the deceased Seller stating possession been already given, further the Learned CIT(A) has erred & failed by holding that once the seller is dead the land cannot be transferred& has also erred & failed to hold that the re-investments made for purchase of new assets can be considered to be part of the HUF funds as received from sale of ancestral Land. 2. The learned CIT(A) has erred in confirming the disallowance of Rs. 11.50 lakhs on account of payments made to father's sisters & daughter's. The learned CIT(A) has erred & failed to appreciate the delicate balance of relationship with father's sisters & daughters, the learned CIT(A) has failed to understand that these relations cannot be strictly viewed with legal perspective alone & the element of preponderances of probabilities is always required to be weighted in such relations. 2.1. The learned CIT(A) has erred in understanding the proposition of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and exclusively in connection with the transfer of the asset. 4. The background facts of the above issues are narrated in the order of the CIT(A) in para 4.1 and the same is as follows. The fact of the sale and the sale consideration are not disputed. The assessee executed a Development Agreement along with his family members in favour of M/s Rishi Constructions & Others dated 07.09.2006 on their ancestral agricultural land at Sl. No.40, Ravet, admeasuring about 72 aar. The total consideration is Rs. 96 lacs. The assessee was holding 50% share in his ancestral property along with his uncle, Mr. Biku Namdev Bondhve & other family members. Thereafter, the assessee executed sale deed for the same property for the same agreed consideration as per Development Agreement & registered the same dated 21.04.2008. The assessee had 50% share and accordingly, he received 50% of the sale consideration being Rs. 48 lacs. This was adopted as the gross sale consideration by the Assessing Officer as well as the assessee. It is an undisputed fact that the transfer of land took place in the present assessment year through a Development Agreement dated 07.09.2006, which was subsequently registered a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sition that the 'reinvestment made in the name of the assessee' alone is eligible for deduction u/s 54F of the Act. Accordingly, the CIT(A) held that the reinvestment of Rs. 3,25,000/- in the name of son i.e. Shri Rahul Sakaram Bhondve, another sum of Rs. 3,25,000/- invested in agricultural land in the name of another son i.e. Shri Tarachand Sakaram Bhondve and investment of Rs. 6,90,000/- against the agricultural land in the name of wife i.e. Smt. Kalinda Sakaram Bhondve are found ineligible for claim of deduction. Further, advance payment of Rs. 18,00,000/- reinvested in the agricultural land was also found ineligible. It is the finding of the CIT(A) on this advance payment that the reinvestment is incomplete from that payment is only advanced and the agreement of purchase is not registered. The transaction is found suspicious considering the transaction of cash payments. A. Reinvestment in wife's name 8. Before me, with respect to the investment in the name of wife namely Smt. Kalinda Sakaram Bhondve (Rs. 6,90,000/-), ld. Counsel for the assessee relied on the Hon'ble Bombay High Court's judgement in the case of CIT vs. Kamal Wahal, 351 ITR 4 and submitted that the reinvestmen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ited alone also noticed the judgment of the Madras High Court (supra) and agreed with the same, observing that though the Madras case was decided in relation to Section 54 of the Act, that Section was in pari materia with Section 54F. The judgment of the Punjab and Haryana High Court in the case of CIT Vs. Gurnam Singh : (2014) 327 ITR 278 in which the same view was taken with reference to Section 54F was also noticed by this Court. 9. It thus appears to us that the predominant judicial view, including that of this Court, is that for the purposes of Section 54F, the new residential house need not be purchased by the assessee in his own name nor is it necessary that it should be purchased exclusively in his name. It is moreover to be noted that the assessee in the present case has not purchased the new house in the name of a stranger or somebody who is unconnected with him. He has purchased it only in the name of his wife. There is also no dispute that the entire investment has come out of the sale proceeds and that there was no constribution from the assessee's wife. 10. Having regard to the rule of purposive construction and the object which Section 54F seeks to achieve an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Rs. 18,00,000/- paid to D.N. Chaudhary deceased. Notwithstanding the incompleteness of the transaction, the requirement for claim of deduction in the investment of capital gains, I am of the opinion that the assessee is entitled for deduction to that extent the contribution belongs to the assessee out of the said Rs. 18,00,000/-. The Assessing Officer is directed to examine the same and the claim of the assessee indicated above. Thus, this part of grounds is allowed for statistical purposes. D. Allowability of expenses out of Rs. 48 lakhs 14. Regarding the issue relating to the claim of deduction of Rs. 11,50,000/- out of his share of the total consideration of Rs. 48,00,000/-, I find, it is the case of the assessee that the share consideration received by the assessee should be reduced to the extent of the amounts are paid to the father's sisters and father's daughters. It is the case of the assessee that these relatives still have some right in the said property though the property actually stands in the name of the assessee at the time of sale of the land. I find there is no dispute about an ancestral nature of the lands in question. The lands were partly owned by the asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g expenses are as under : a. I find that the release deed dtd. 10/10/1997 which has been, duly registered with the sub registrar, the sisters of the appellant's father viz. Kasabai Bhedge, Draupadibai Bagal, Savitribai Valekar, Panabai Sawant, Shantabax Balghare and released their right in favor of Tukaram Namdev Bhondve, Bhike N. Bhondve (uncles of the assessee} and Sakharam P Bhondve (assessee). After: registration of this deed, an entry was duly made in the mutation records ore 9/2/1998 vide entry no.4142. b. In the development agreement did. Sept 2006 the sellers are exclusively mentioned as Bhiku N. Bhondve his wife Bhagubai B. Bhondve. his sons Vilas. Dyaneshwar, Popat Bhondve and his daughter Hirabai M. Garade along with the assessee Sakharam Bhondve. There is no mention whatsoever of the father's sisters or his daughters in the development agreement. c. In the sale deed registered on 21/4/2008, the sellers are mentioned as Smt. Bhagubai B. Bhondve, her sons Vilas, Dyaneshwar, Popat Bhondve and her daughter Hirabai M. Garade along with the assessee Sakharam Bhondve. The confirming parties are 14 in number being other members of the extended Bhondve family, including th....