TaxTMI 
TaxTMI 
2024 (6) TMI 62
X X X X Extracts X X X X
X X X X Extracts X X X X
....sale proceeds of original asset. 3. That the respondent ought to have considered the intent and spirit of Section 54B which simply casts an obligation upon the assessee to buy agricultural land for claiming the said deduction without specifying in whose name the new Land should be bought. 4. That the respondent failed to notice that the minors are incompetent to be a buyer in the eyes of law and assessee is a natural/legal guardian. 5. That the respondent failed to see that the subject agricultural lands were purchased in the name of wife & minor children and squarely allowed even under 2(9) of the Benami Transaction Prohibition Act 1988 and even under the amended Act passed in the year 2016. 6. The statutory recognition to purchase property in name of wife and minor children is a good evidence which the respondent failed to comply under the I.T. Act." 2. The assessee is an individual and filed return of income on 28.07.2013 declaring total income of Rs. Nil after claiming deduction u/s 54B. The case of assessee was selected for scrutiny under CASS on the issue of capital gain arising from sale of urban agricultural land. The assessee has expl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....her submitted that the Hon'ble jurisdictional High Court in case of Pr. CIT vs. Balmukund Meena in ITANo.118/Ind/2016 has upheld the order of this tribunal allowing the claim of deduction u/s 54B in respect of the land purchased by the assesse in the name of his son. Ld. AR has then relied upon the decision of this tribunal dated 28.09.2018 in case of Shri Raja Ram Patidar vs. ITO in ITANo.371/Ind/2015. Thus, ld. AR has submitted that when all other conditions of section 54B are complied with by the assesse then the deduction u/s 54B cannot be denied merely because the assessee purchased the land in the name of his wife and children. 4. On the hand Ld. DR has relied upon the orders of the authorities below and submitted that the CIT(A) has followed the decision of Hon'ble Punjab & Haryana High Court as well as decision of the Delhi benches of the Tribunal in case of Karamvir vs. ITO dated 06.07.2022 in ITA No.2023/Del/2017. 5. We have considered rival submissions as well as relevant material on record. The assessee has sold the agricultural land for consideration of Rs. 2 crore but long term capital gain was workout on the market value being stamp duty value of Rs. 2,55,00000....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... actually he who paid the amount of 84 ,700/- and that his wife's name was added benami and that the title thereof even to that extent vested in himself. We must, therefore, proceed on the basis that out of the sum of Rs. 60,00,000/-, the appellant invested only Rs. 44,76,000/- in the second property." 5.2 Thus it was found by the Hon'ble High Court that the investment was made by the wife of the assessee and therefore, to that extent the title is also vested in the name of the wife. In case in hand, we find that the entire payments for purchase of new land has been made by the assessee from his own bank accounts. On the directions of the Bench the assessee has produced the bank account statements of the assessee reflecting payments made by the assessee for purchase of these five lands and particularly the lands purchased in the name of wife, two minor daughters and one minor son. The details given in the respective sale deeds for payment of the consideration for purchase of the lands are matching with the entries in the bank account of the assessee. The payments details of purchase of new lands are reproduced as under: 5.3 These details has been verified by us from the r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....earned 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 agriculture purposes which was invested in the purchase of any other land and again being used for agricultural purposes. There is no dispute to the fact that the assessee sold his agricultural land and then purchased other agricultural land out of the sale proceeds and got registered some portion of the land in the name of his only son who was a bachelor at the relevant time. If the 'ikrarnama'/agreement is analyzed which is available at page 9 of the paper book, it clearly speaks that "The purchaser is at liberty to execute the sale deed in the name of any member of his family. He is also at liberty to execute as many as sale deeds as he desires...." If the contents of the 'ikrarnama'/agreement to sale is analyzed one undisputed fact is oozing out that the sale proceeds of the agricultural land were in fact used to purchase another agricultural land. Section 54B speaks about transfer of capital asset being land within....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d by the assessee, the land in question was purchased for any other purpose than the agricultural purpose. Undisputedly, the purchased land is being used by the assessee only for agricultural purpose and merely because in the sale deed his only son was also shown as co-owner, the ITAT has rightly come to the conclusion that it does not make any difference because the purchased land is being used by the assessee for agricultural purposes. It is not the case of the revenue that the said land is being used exclusively by his son. In our view, a pure finding of fact has been recorded by the ITAT which does not require any interference in this appeal. 4. No substantial question of law is involved in this appeal.â A similar view has been taken by the High Court of Delhi in the case of Commissioner of Income-tax-XII vs. Kamal Wahal, reported in 2013 (30) taxmann.com 34 (Delhi). Paragraph Nos. 8, 9 and 10 of the aforesaid judgment read as under:- "8. This Court in the decision cited 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 Se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iew of the decision of Malabar Industrial company Ltd. (supra) Sec.263 provisions are taken only on the ground of prejudicial and interest loss of the revenue to the Government. Merely change of opinion will not give any right u/s 263 hence, the issue regarding Sec. 263 is required to be answered in favour of the assessee and against the department. 7.2 On the ground of investment made by the assessee in the name of his wife, in view of the decision of Delhi High Court in Sunbeam Auto Ltd. and other judgments of different High Courts, the word used is assessee has to invest it is not specified that it is to be in the name of assessee. 7.3 It is true that the contentions which have been raised by the department is that the investment is made by the assessee in his own name but the legislature while using language has not used specific language with precision and the second reason is that view has also been taken by the Delhi High Court that it can be in the name of wife. In that view of the matter, the contention raised by the assessee is required to be accepted with regard to Section 54B regarding investment in tubewell and others. In our considered opinion, for t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee in his name and merely because he- has included the name of his wife and the property purchased in the joint names would not make any difference. Such a conduct has to be, rather, encouraged which gives empowerment to women. There are various schemes floated by the Government itself permitting joint ownership with wife. If the. view of the Assessing Officer (AO) or the contention of the Revenue is accepted, it would-be a derogatory step. 10. Even when we look into the matter from another angle, facts remain that the assessee is the actual and constructive owner of the house. In CIT Vs. Podar Cements (P) Ltd. & Ors., (1997) 226 ITR 625 (SC), the Supreme Court has also accepted the theory of constructive ownership. Moreover, Section 54F mandates that the house should be purchased by the assessee and it does not stipulate that the house should be purchased in the name of the assessee only. Here is a case where the house was purchased by the assessee and that too in his name and wife's name was also included additionally. Such inclusion of the name of the wife for the above-stated peculiar. factual reason should not stand in the way of the deduction legitimately accruin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arnataka High Courts (supra) are in favour of the assessee, the revenue fairly brought to our notice a similar view of this Court in CIT Vs. Ravinder Kumar Arora: (2012)342 ITR 38 (Del.). That was also a case which arose under Section 54F of the Act. The new residential property was acquired in the joint names of the assessee and his wife. The income tax authorities restricted the deduction under Section .54F to 50% on the footing that the deduction was not available on the portion of the investment which stands in the name of the assessee's wife. This view was disapproved by this Court. It noted that the entire purchase consideration was paid only by the assessee and not a single penny was contributed by the. assessee's wife. It also noted that a purposive construction is to be preferred as against a literal construction, more so when even applying the literal construction, there is nothing in the section to show that the house should be in the name of the assessee only. As a matter of fact, Section 54F in terms does not require the new residential property shall be purchased in the name of the assessee; it merely says that the assessee should have purchased/constructed "a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arises] from the transfer of a capital asset being land which, in the two years immediately preceding the date on which the transfer took place, was being used by [the assessee being an individual or his parent, or a Hindu undivided family] for agricultural purposes (hereinafter referred to as the original asset),, and the assessee has, within a period of two years after that date, purchased any other land for being used for agricultural purposes, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,- (i) if the amount of the capital gain is greater than the cost of the land so purchased (hereinafter referred to as the new asset), the difference between the amount of the capital gain and the shall be charged under section 45 as the income of the previous year, and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be nil; or (ii) if the amount of the capital gain is equal to or less t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... purchase of agriculture land in the name of his son and daughter who are not someone not connected or strangers to the assessee and as held by the Hon'ble High Court that the assessee includes his legal heirs also so as to give the vide and legal interpretation. We therefore are of the view that the Ld.CIT(A) erred in denying the exemptions u/s 54B of the Act to the assessee for investment of sale consideration for purchasing agriculture land in name of his son and daughter at Rs. 49,86,085/- and Rs. 12,50,175/- respectively. We accordingly set aside the findings of both the lower authorities and direct the Ld. Assessing Officer to give the benefit of exemption u/s 54B of the Act to the assessee at Rs. 62,36,260/- which is over and above the benefit of Rs. 91,18,190/- already allowed by Ld.CIT(A) u/s 54B of the Act. In the result the issue No.3 raised by the assessee under Ground No.2 of the appeal is allowed. Accordingly in the facts and circumstances of the case as discussed above and in view of the binding precedent of Hon'ble jurisdictional High Court as well as other decisions cited above we allow the claim of the assessee u/s 54B of the Act. 6. In the result, appea....