Sh. Bant Singh, Ludhiana V. ITO, Ludhiana

ITA 278/CHANDI/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77070 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 19-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJINDER SINGH
• Keywords: Business income; Benefit of exemption
• Section: 54B; 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITAS NO. 277 & 278/CHD/2014 ASSESSMENT YEAR: 2005-06 & 2007-08 SHRI BANT SINGH VS. THE ITO, S/O SH. HARNAM SINGH WARD-3(2), VILL BHAMIAN KHURD LUDHIANA TEH & DISTT. LUDHIANA CEJPS 6070P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI RAJINDER SINGH DATE OF HEARING : 12.05.2014 DATE OF PRONOUNCEMENT : 21.5.2014 ORDER PER T.R.SOOD, A.M. THESE APPEALS ARE FILED BY THE ASSESSEE AND ARE DIR ECTED AGAINST THE ORDER DATED 31.01.2014 OF LD. CIT (APPE ALS)-II, LUDHIANA. THE ISSUES ARE SAME IN THESE APPEALS AND THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS C ONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2 IN THESE APPEALS IDENTICAL GROUNDS HAVE BEEN RAIS ED BY THE ASSESSEE WHICH ARE AS UNDER: 1 THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) , LUDHIANA HAS ERRED IN UPHOLDING THE ACTION OF THE A SSESSING OFFICER IN ASSESSING THE LONG TERM CAPITAL GAIN AT RS. 24,47,500/. 2 THAT THE LD CIT(A) HAS ERRED IN UPHOLDING IN NOT GIVING THE BENEFIT OF EXEMPTION U/S 54 B FOR THE PURCHASE OF AGRIL.LAND IN THE NAME OF HIS SON AS PER BINDING JU DGMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT. 3 THAT THE WORTHY CIT(A) HAS FAILED TO CONSIDER THA T THE LAND SOLD WAS IN JOINT NAMES OF FATHER & SON AND TH E LAND PURCHASED WAS IN THE NAME OF SON, THOUGH, THE AGREE MENT 2 WAS IN JOINT NAMES AND, AS SUCH, THERE WAS DUE COMP LIANCE OF THE PROVISIONS OF SECTION 54 B. 4 THAT THE CIT(A) HAS ERRED IN APPLYING THE JUDGMEN T OF HONBLE PUNJAB & HARYANA HIGH COURT AS REPORTED IN 306 ITR 335 AND NOT FOLLOWING THE LATER JUDGMENT AS REPORTE D IN 327 ITR 278. 5 THAT THE ADDITION HAS BEEN UPHELD AGAINST THE FAC TS AND CIRCUMSTANCES OF THE CASE AND SUBMISSION MADE DURIN G THE COURSE OF HEARING HAS NOT BEEN CONSIDERED PROPERLY. 3 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURIN G ASSESSMENT PROCEEDINGS THE ASSESSING OFFICE NOTICED THAT A SE ARCH WAS CONDUCTED ON PREMISES OF PROPERTY DEALERS AND SOME DOCUMENTS REGARDING SALE OF LAND WERE FOUND BECAUSE OF WHICH PROCEEDINGS U/S 153C WERE INITIATED AGAINST THE ASSESSEE. ULTIMATE LY CAPITAL GAIN WAS COMPUTED. THE ASSESSEE HAD ALSO CLAIMED DEDUCT ION U/S 54B OF THE ACT. THIS DEDUCTION WAS MAINLY DENIED BY TH E ASSESSING OFFICER BECAUSE NEW LAND PURCHASED BY THE ASSESSEE WAS IN THE NAME OF NIRMAL SINGH THAT IS THE SON OF THE ASSESSE E. THE LD. AUTHORISED REPRESENTATIVE RELIED ON THE DECISION OF HON'BLE PUNJAB AND HARYANA HIGH COURT IN CASE OF CIT VS. GURNAM S INGH, 327 ITR 278 BUT THE ASSESSING OFFICER OBSERVED THAT THAT DE CISION WAS DISTINGUISHABLE ON FACTS AND ULTIMATELY COMPUTED C APITAL GAIN WITHOUT ALLOWING DEDUCTION U/S 54B OF THE ACT. 4 ON APPEAL IT WAS MAINLY CONTENDED THAT THE ASSESS EE WAS AGED 75 YEARS. THE LAND WHICH WAS SOLD WAS IN THE JOINT NAME OF THE ASSESSEE AND HIS SON. BECAUSE OF OLD AGE OF TH E ASSESSEE, NEW LAND PURCHASED WAS REGISTERED IN THE NAME OF HIS SO N WHO WAS ONLY SON OF THE ASSESSEE. RELIANCE WAS AGAIN PLACED ON THE DECISION OF CIT V. GURNAM SINGH (SUPRA). RELIANCE WAS ALSO PLA CED ON THE DELHI BENCH OF THE TRIBUNAL IN CASE OF JAGPAL SINGH VS. ITO, 186 TAXMAN 26 (DELHI) (MAG). 3 5 THE LD. CIT(A) DID NOT FIND FORCE IN THESE SUBMIS SIONS AND OBSERVED THAT IN THE PRESENT CASE DECISION OF HON'B LE PUNJAB AND HARYANA HIGH COURT IN CASE OF JAI NARAYAN V ITO, 306 ITR 335 (PH) IS APPLICABLE. 6 BEFORE US, THE SUBMISSIONS MADE BEFORE THE LD. CI T(A) WERE REITERATED. IT WAS FURTHER SUBMITTED THAT SINCE TH E ASSESSEE WAS AN OLD PERSON AND HAD ONLY ONE SON WHO WAS GOING TO BE LEGAL HEIR, THERE WAS NO PURPOSE FOR PURCHASING THE NEW LAND IN THE NAME OF THE ASSESSEE HIMSELF AND THAT IS WHY LAND WAS PURCH ASED IN THE NAME OF HIS SON. FURTHER HON'BLE PUNJAB AND HARYAN A HIGH COURT HAS CLEARLY HELD IN CASE OF CIT VS. GURNAM SINGH (S UPRA) THAT IF THE LAND WAS PURCHASED BY THE ASSESSEE ALONG WITH HIS S ON THEN THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 54B. IT WAS FURTHER PLEADED THAT THE ASSESSEE IS ONLY A FARMER AND DOES NOT HAV E ANY OTHER INCOME AND IN THIS REGARD AN AFFIDAVIT OF THE ASSES SEE HAS BEEN FILED. IT WAS POINTED OUT THAT IN CASE OF JAI NARA YAN VS. ITO (SUPRA) THE LAND WAS PURCHASED IN NAME OF SON AND HIS GRAND SON THAT IS WHY A DIFFERENT VIEW WAS TAKEN. 7 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE S TRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 8 WE HAVE GONE THROUGH THE RIVAL SUBMISSIONS CAREFU LLY. THE CONTENTS OF THE AFFIDAVIT READS AS UNDER: I, BANT SINGH SON OF SHRI HARNAM SINGH RESIDENT OF VILLAGE BHAMIAN KHURD, LUDHIANA DO HEREBY SOLEMNLY AFFIRM AND DECLA RE AS UNDER: 1 THAT I AM PRESENTLY AGED ABOUT 75 YEARS. 2 THAT I AM ENCLOSING HEREWITH PROOF TO CONFIRM MY AGE. 3 THAT I HAVE ONLY SON NAMELY SHRI NIRMAL SINGH. 4 THAT I HAVE ONLY AGRICULTURAL INCOME AND NO OTHER BUSINESS INCOME. 5 THAT MY SON IS LIVING WITH ME, HE IS TOTALLY DEPE NDENT UPON ME. 6 THAT AFTER MY DEATH HE SHALL BE MY ONLY LEGAL HEI R. THE ABOVE MAKES IT CLEARLY THAT THE ASSESSEE IS A BASICALLY AN AGRICULTURALIST AND IS AGED ABOUT 75 YEARS. FURTHE R THE LAND WHICH WAS SOLD BY THE ASSESSEE WAS IN THE JOINT NAME OF T HE ASSESSEE ALONG WITH HIS SON WHICH MEANS THE SON WAS ALSO PAR T OWNER OF THE 4 LAND, THEREFORE THE ISSUE WOULD STAND COVERED BY TH E DECISION OF HON'BLE PUNJAB AND HARYANA HIGH COURT IN CASE OF C IT VS. GURNAM SINGH WHEREIN IT WAS HELD AS UNDER: 327 ITR 278 HELD, DISMISSING THE APPEAL, THAT TH E TRIBUNAL HAD RECORDED A PURE FINDING OF FACT THAT THE LAND IN QU ESTION WAS PURCHASED OUT OF THE SALE PROCEEDS OF THE AGRICULTURAL LAND W HICH WAS USED ONLY FOR AGRICULTURAL PURPOSES AND MERELY BECAUE THE ASSESSE ES SON WAS SHOWN IN THE SLE DEED AS CO-OWNER, IT DID NOT MAKE ANY DI FFERENCE. IT WAS NOT THE CAE OF THE REVENUE THAT THE LAND IN QUESTION WA S EXCLUSIVELY USED BY HIS SON. THEREFORE THE ASSESSEE WAS ENTITLED TO DE DUCTION U/S 54B. EVEN IF WE CONSIDER THE DECISION OF JAI NARAYAN VS. ITO (SUPRA) THE COURT HAS SIMPLY STATED THAT THE WORD ASSESSEE OC CURRED IN SECTION 54F MUST BE INTERPRETED IN SAME MANNER AS O CCURRED WITH THE CONTEXT AND SUBJECT OF ITS USAGE. EVEN FROM TH AT ANGLE SINCE THE SON OF EH ASSESSEE WAS ALSO JOINT OWNER OF THE LAND WHICH WAS SOLD (BECAUSE NAME OF THE SON WAS THERE IN THE LAND WHI CH ASSESSEE WAS HOLDING THOUGH BENEFICIAL OWNER IN ONLY ASSESSE E). THEREFORE IN OUR OPINION, IF THE LAND WAS PURCHASED IN THE NAME OF THE SON OF THE ASSESSEE BECAUSE OF OLD AGE AND OTHER TECHNICAL REA SONS, THE ASSESSEE WOULD STILL BE ENTITLED TO DEDUCTION U/S 5 4F OF THE ACT. ACCORDINGLY WE SET ASIDE THE ORDER OF THE LD. CIT(A ) AND DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S 54F OF THE ACT. 9 IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.5.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21.5.2014 SURESH COPY TO:THE APPELLANT/THE RESPONDENT/THE CIT/THE CI T(A)/THE DR