The Dy. Commissioner Income-tax, Jalandhar V. Sh. Jit Singh ,S/o- Dhanna Singh, Jalandhar

ITA 21/ASR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8797 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 08-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR KANCHAN GARG
• Assessee Lawyers: S S KALRA
• Keywords: Additional evidence; Question of law
• Section: 54B; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S. KAPOOR, HONBLE ACCOUNTANT MEMBER I.T.A NO. 21(ASR)/2015 ASSESSMENT YEAR: 2009-10 DY. CIT, CENTRAL CIRCLE -1, JALANDHAR. VS. SH. JIT SINGH S/O S. DHANNA SINGH VPO SARMAST PUR, TEHSIL-KARTARPUR, DIST:-JALANDHAR. PAN:ATVPT1531B (APPELLANT) (RESPONDENT) APPELLANT BY: SH. DR. KANCHAN GARG (DR.) RESPONDENT BY: SH. S.S.KALRA (CA.) DATE OF HEARING: 18.02.2016 DATE OF PRONO UNCEMENT: 09.03.2016 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY REVENUE AGAINST T HE ORDER OF LEARNED CIT(A), LUDHIANA, DATED 17.10.2014, FOR THE ASST. Y EAR 2009-10. 2. THE FOLLOWING GROUNDS OF APPEAL HAS BEEN TAKEN B Y THE REVENUE. (I) WHETHER THE DECISION OF THE LD. CIT(A) IS RI GHT IN ALLOWING THE EXEMPTION U/S 54B TO THE EXTENT OF RS.59.50 LAC S WHERE INVESTMENT IS MADE IN THE NAME OF SMT. KASHMIR KAUR (WIFE) AND SMT. BALWINDER KAUR W/O SH. DALBIR SINGH & NOT IN T HE NAME OF THE ASSESSEE SH. JIT SINGH. (II) THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROU NDS OF APPEAL ON OR BEFORE THE APPEAL IS HEARD AND DISPOSE D OF. (III) IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE SET ASIDE. ITA NO.2 1(ASR)/2015 ASST. YE AR: 2009-10 2 3. THE LEARNED DR, AT THE OUTSET, FILED ADJOURNMEN T LETTER AND REQUESTED FOR ADJOURNMENT OF THE CASE. HOWEVER, ON GOING THROUGH THE FILE WE OBSERVED THAT MATTER CAN BE DISPOSED OFF WI TH THE ASSISTANCE OF LEARNED AR, THEREFORE, LEARNED AR WAS DIRECTED TO E XPLAIN THE FACTS OF THE CASE AND ADJOURNMENT LETTER FILED BY REVENUE WA S REJECTED. 4. THE LEARNED AR SUBMITTED THAT IT WAS A CASE OF D ENIAL OF EXEMPTION OF CLAIM MADE BY ASSESSEE U/S 54B OF THE ACT. HE EXPLAINED THAT ASSESSEE HAD EARNED A CAPITAL GAIN ON SALE OF AGRICULTURAL LAND AND OUT OF SALE PROCEEDS INVESTMENT WAS MADE FOR PURCHA SE OF ANOTHER AGRICULTURAL LAND, BUT, INVESTMENT WAS MADE IN THE NAME OF ASSESSEE, ASSESSEES WIFE AND ASSESSEES BHABHI. THE ASSESSIN G OFFICER HAD NOT GRANTED THE EXEMPTION U/S 54B FOR THE INVESTMENT MA DE BY ASSESSEE IN THE NAME OF HIS WIFE AND BHABHI HOWEVER, LEARNED CI T(A) ALLOWED THE RELIEF TO THE ASSESSEE AND IN THIS RESPECT OUR ATTE NTION WAS INVITED TO PARA 7 OF LEARNED CIT(A)S ORDER. THE LEARNED AR FU RTHER INVITED OUR ATTENTION TO PAPER BOOK PAGE 14 & 15 WHERE A COPY O F REMAND REPORT WAS PLACED WHICH WAS ISSUED BY ASSESSING OFFICER IN VIEW OF ADDITIONAL EVIDENCE FILED BY ASSESSEE. THE LEARNED AR INVITED OUR ATTENTION TO PAPER BOOK PAGE 1 WHERE WORKING OF CAPITAL GAINS EA RNED BY ASSESSEE WAS PLACED AND HE SUBMITTED THAT IF THE INVESTMENT MADE BY ASSESSEE IN THE NAME OF HIS WIFE AND BHABHI ARE CONSIDERED T HE FIGURE OF CAPITAL GAIN WILL BE IN NEGATIVE AND EVEN IF THE INVESTMENT IN THE NAME OF HIS BHABHI IS NOT CONSIDERED EVEN THEN TAXABLE CAPITAL GAIN WILL WORK OUT TO ITA NO.2 1(ASR)/2015 ASST. YE AR: 2009-10 3 BE RS.2,02,955/- AND HE STATED THAT ASSESSEE WILL N OT HAVE ANY OBJECTION IF THE ADDITION TO THIS EXTENT IS CONFIRM ED. THE LEARNED AR IN THIS RESPECT RELIED UPON THE CASE LAW OF CIT VS. KAMAL WAHAL, 351 ITR 0004 DECIDED BY HONBLE DELHI HIGH COURT, FOR THE PROPO SITION THAT INVESTMENT OF CAPITAL GAINS IN THE NAME OF WIFE OF AN ASSESSEE IS AN ALLOWABLE EXEMPTION. THE LEARNED AR FURTHER RELIED UPON THE ORDER OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. GURNAM SINGH 327 ITR 0278, FOR THE PROPOSITION THAT INVESTMENT OF CAPITAL GAIN S WAS ELIGIBLE FOR EXEMPTION U/S 54B IF THE INVESTMEN T WAS MADE IN THE JOINT NAMES OF THE ASSESSEE AND HIS SON. IN VIEW OF THE RATIO OF THESE JUDICIAL PRECEDENTS, THE LEARNED AR ARGUED THAT LEA RNED CIT(A) HAS RIGHTLY ALLOWED THE EXEMPTION. 5. THE LEARNED DR, ON THE OTHER HAND, HEAVILY PLACE D HER RELIANCE ON THE ORDERS OF ASSESSING OFFICER. 6. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ASSESSMENT IN THIS CASE WAS COMPLETED U/S 144 OF THE ACT AS ASSESSEE DID NOT AT TEND THE ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER ON TH E BASIS OF AN INFORMATION THAT ASSESSEE HAD EARNED CAPITAL GAINS HAD REOPENED THE CASE OF THE ASSESSEE AND IN THE ABSENCE OF COOPERAT ION FROM THE ASSESSEE HAD MADE AN ADDITION OF RS.2,40,83,353/- A S CAPITAL GAINS ON SALE OF LAND. AGGRIEVED WITH THE ORDER THE ASSESSEE FILED APPEAL BEFORE ITA NO.2 1(ASR)/2015 ASST. YE AR: 2009-10 4 LEARNED CIT(A) AND ARGUED THAT THE LAND IN QUESTION WHICH WAS SOLD WAS AN AGRICULTURAL LAND AND BEFORE MAKING THE SALE THE ASSESSEE HAD TO INCUR CERTAIN EXPENDITURE FOR EVICTION OF PERSO NS WHO WERE OCCUPYING THE LAND. IT WAS FURTHER SUBMITTED THAT A SSESSEE HAD MADE MUCH MORE INVESTMENT THAN THE CAPITAL GAINS IN THE PURCHASE OF AGRICULTURAL LAND AND THEREFORE, THE CASE OF THE AS SESSEE WAS FULLY COVERED BY PROVISIONS OF SECTION 54B AND NO TAXABLE INCOME ON ACCOUNT OF CAPITAL GAIN AROSE. IT WAS SUBMITTED THAT THOUGH THE ASSESSEE AS PER AGREEMENT TO SALE HAD PURCHASED AGRICULTURAL LAND M UCH MORE THAN SALE CONSIDERATION BUT EVEN IF REGISTERED VALUE AFT ER TAKING INTO ACCOUNT THE INDEXED COST IS CONSIDERED THE TAXABLE CAPITAL GAIN IS NEGATIVE. THE LEARNED CIT(A) HAS ADMITTED THE ADDITIONAL EVIDENCE AND AFTER OBTAINING REMAND REPORT FROM THE ASSESSING OFFICER ALLOWED RE LIEF TO THE ASSESSEE. IN THE REMAND REPORT AT PAPER BOOK PAGE 14 & 15 THE ASSESSING OFFICER HAS ACCEPTED THAT THE LAND WHICH WAS SOLD AND WHICH WAS PURCHASED WAS AN AGRICULTURAL LAND AND FURTHER HE HAS ACCEPTE D THAT ASSESSEE HAD PAID AN AMOUNT OF RS.78,36,115/- FOR THE EVICTION O F LAND AND HAS FURTHER VERIFIED THAT THE ASSESSEE HAD MADE INVESTM ENT IN THE PURCHASE OF AGRICULTURAL LAND TO THE TUNE OF RS.1,00,35,000/ -. WE FIND THAT OUT OF THE INVESTMENT OF RS.1,00,35,000/-, THE INVESTMENT OF RS.59,50,000/- IS IN THE NAME OF WIFE OF ASSESSEE AND HIS BHABHI A S IS APPARENT FROM COPY OF SALE DEED PLACED AT PAPER BOOK PAGE 2 TO 13 . AS PER WORKING SHEET OF CAPITAL GAIN AND ITS EXEMPTION U/S 54B AS PLACED IN PAPER ITA NO.2 1(ASR)/2015 ASST. YE AR: 2009-10 5 BOOK PAGE 1, WE FIND THAT AFTER TAKING INTO ACCOUNT THE EVICTION CHARGES PAID BY ASSESSEE AND AFTER TAKING INTO ACCOUNT THE INDEXED COST OF LAND THE CAPITAL GAIN WORKS OUT TO BE RS.84,72,570/- OUT OF WHICH INVESTMENT WAS MADE IN THE NAME OF ASSESSEE TO THE TUNE OF RS.40,85,000/- AND IN THE NAME OF HIS WIFE TO THE T UNE OF RS.41,84,615/-. THEREFORE, EVEN IF WE IGNORE THE IN VESTMENT MADE IN THE NAME OF HIS BHABHI THE TAXABLE CAPITAL GAIN WOR KS OUT TO BE RS.2,02,955/-. THE INVESTMENT MADE IN THE NAME OF W IFE IS ELIGIBLE FOR EXEMPTION U/S 54B AS IS HELD IN THE CASE OF CIT VS. GURNAM SINGH 327 ITR 0278 DECIDED BY HONBLE PUNJAB & HARYANA HIGH C OURT WHERE IN THE ASSESSEE SOLD AGRICULTURAL LAND AND HAD PURCHAS ED AGRICULTURAL LAND IN THE NAME OF HIS SON AND HONBLE COURT HAS D ECIDED THE ISSUE IN FAOUR OF ASSESSEE BY HOLDING AS UNDER: WE HAVE HEARD THE COUNSEL FOR THE REVENUE AND GONE THROUGH THE AFORESAID IMPUGNED ORDER. IN OUR OPINION, FROM THE IMPUGNED ORDER, NO SUBSTANTIAL QUESTION OF LAW IS ARISING FOR CONSIDER ATION OF THIS COURT AS THE TRIBUNAL WHILE RECORDING A PURE FINDING OF FACT HAS DISMISSED THE APPEAL OF THE REVENUE. UNDISPUTEDLY, IN THIS CASE T HE ASSESSEE HAD SOLD THE AGRICULTURAL LAND WHICH WAS BEING USED BY HIM F OR AGRICULTURAL PURPOSES. OUT OF SALE PROCEEDS OF THE SAID SALE, TH E ASSESSEE HAS PURCHASED OTHER PIECE OF LAND (LAND IN QUESTION) IN HIS NAME AND IN THE NAME OF HIS ONLY SON, WHO WAS BACHELOR AND DEPENDEN T UPON HIM, FOR BEING USED FOR AGRICULTURAL PURPOSES WITHIN THE STI PULATED TIME. FURTHER, IT IS NOT THE CASE OF THE REVENUE THAT FROM THE SAL E PROCEEDS OF THE AGRICULTURAL LAND EARLIER OWNED BY THE ASSESSEE, TH E LAND IN QUESTION WAS PURCHASED FOR ANY OTHER PURPOSE THAN THE AGRICU LTURAL PURPOSE. UNDISPUTEDLY, THE PURCHASED LAND IS BEING USED BY T HE ASSESSEE ONLY FOR AGRICULTURAL PURPOSE AND MERELY BECAUSE IN THE SALE DEED HIS ONLY SON WAS ALSO SHOWN AS CO-OWNER, THE TRIBUNAL HAS RIGHTL Y COME TO THE CONCLUSION THAT IT DOES NOT MAKE ANY DIFFERENCE BEC AUSE 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 USE D EXCLUSIVELY BY HIS SON. IN OUR VIEW, A PURE FINDING OF FACT HAS BEEN R ECORDED BY THE TRIBUNAL WHICH DOES NOT REQUIRE ANY INTERFERENCE IN THIS APP EAL. ITA NO.2 1(ASR)/2015 ASST. YE AR: 2009-10 6 WE FIND THAT IN THE PRESENT CASE, THE INSTEAD OF SO N THE PART INVESTMENT HAS BEEN MADE IN THE NAME OF HIS WIFE, THEREFORE, R ESPECTFULLY FOLLOWING THE RATIO OF THE CASE LAWS RELIED UPON BY LEARNED A R WE AGREE WITH THE CONTENTION OF LEARNED AR THAT INVESTMENT IN THE NAM E OF WIFE WAS ELIGIBLE U/S 54B OF THE ACT. HOWEVER, THE INVESTMEN T IN THE NAME OF HIS BHABHI IS NOT ELIGIBLE FOR EXEMPTION U/S 54B, THERE FORE, TAXABLE CAPITAL GAIN IN THE CASE OF THE ASSESSEE IS RESTRICTED TO R S.2,02,955/-. 7. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH MARCH, 2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED:09.03.2016. /PK/PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.