Shri Vasudev Somabhai Vankar, Ahmedabad V. The ITO, Ward-7(1)(5), Ahmedabad

ITA 56/AHD/2020

AI Insights

The case revolves around the appeal by Shri Vasudev Somabhai Vankar against the order of the CIT(A)-7, Ahmedabad, which confirmed the disallowance of a significant portion of the exemption claimed under Section 54B of the Income Tax Act, 1961. The assessee had sold agricultural land and claimed exemption for the reinvestment in another agricultural land, which was registered in his wife's name. The Assessing Officer initially granted a partial exemption, but the CIT(A) later withdrew it entirely, leading to the appeal. The Tribunal's decision reversed the CIT(A)'s order, supporting the assessee's claim based on the substantive evidence provided during the assessment proceedings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129437 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-04-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 05-01-2020
• Other Referred Cases: CIT vs. Kamal Wahal, 351 ITR 4, Laxmi Narayan vs CIT, 402 ITR 117
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 147; 148; 54B; 143(2)

Judgement Text

ITA No.56/Ahd/2020 Assessment Year: 2010-11 Page 1 of 5 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.56/Ahd/2020) Assessment Year: 2010-11 Shri Vasudev Somabhai Vankar, vs. Income Tax Officer, 91, Vankar Vas, Ward –7(1)(5), Nr. Karshidhi Mata Temple, Ahmedabad. Ahmedabad - 382443. [PAN – ACPPV 9410 L] (Appellant) (Respondent) Assessee by : Shri Aseem Thakkar, AR Revenue by : Shri Sanjay Kumar, Sr. DR Date of hearing : 03.04.2023 Date of pronouncement : 05.04.2023 O R D E R This appeal is filed by the Assessee against order dated 31.10.2019 passed by the CIT(A)-7, Ahmedabad for the Assessment Year 2010-11. 2. The Assessee has raised the following grounds of appeal :- “1. The learned Commissioner of Income Tax (Appeals) has erred in confirming action of the Assessing Officer in computing the total income of the Appellant at Rs.47,99,268/- as against that of Rs.1,76,070/- declared in the return of income filed by the Appellant on 28/04/2017. 2. The learned Commissioner of Income Tax (Appeals) has erred in confirming action of the Assessing Officer in making disallowance of Rs.46,23,198/- for the alleged wrong exemption claimed under section 54B of the I.T. Act, 1961 without considering the fact that the Appellant has made investment of his share of Rs.61,20,000/- in sale consideration of agricultural land in the name of his wife and claimed exemption of Rs.59,23,198/- u/s. 54B of the I.T Act, 1961 taking indexed cost of Rs.1,96,802/-. 3. The learned Commissioner of Income Tax (Appeals) has erred in holding that the appellant is not entitled for claiming deduction under section 54B of the Act either at Rs.13,00,000/- or at a higher amount as claimed by the appellant and giving direction to the A.O. for withdrawing the deduction of Rs.13,00,000/- given by the A.O. u/s. 54B of the Act. 1961 which is not permissible under the Act ITA No.56/Ahd/2020 Assessment Year: 2010-11 Page 2 of 5 4. The learned Commissioner of Income Tax (Appeals) has erred in exceeding her jurisdiction by issuing directions on issues not covered by the grounds of appeal raised by the assessee 5. The learned Commissioner of Income Tax (Appeals) has erred in indirectly enhancing assessment without giving the statutory notice as stipulated u/s.251(2) of the Act by giving direction to withdraw the claim of exemption u/s.54B of the Act of Rs.13 Lacs already granted . 6. The learned Commissioner of Income Tax (Appeals) has erred in not taking cognizance of the affidavit of legal heirs of the sellers namely Vasudev Odharbhai Rabari and Arjunbhai Rajabhai Rabari who have affirmed the receipt of money to the assessee. 7. The learned Commissioner of Income Tax (Appeals) has erred in giving direction to the A.O. to intimate the facts of consideration received and conveyance deeds executed in respect of sale and purchase of agricultural lands by the appellant to the concerned Sub-registrars of Government of Gujarat 8. Alternatively, it is held that the capital gain does not result to the assessee on transfer of agricultural land not being owned by him the amount in question should be treated as capital receipt or alternatively cash credits whose source stands explained.” 3. After receiving information the case of the assessee was reopened under Section 147 of the Income Tax Act, 1961 after recording reasons. Notice under Section 148 of the Act was issued on 26.12.2016 which was served upon the assessee. In response to notice under Section 148 of the Act, the assessee filed his return on 28.04.2017 by declaring total income of Rs.1,76,070/- and the assessee also claimed exemption under Section 54B of Rs.59,23,198/-. The Assessing Officer observed that the assessee is having income from salary and capital gain. Notice under Section 143(2) of the Act was issued on 04.05.2017. The assessee filed the details as well as the submissions before the Assessing Officer. The Assessing Officer observed that the provisions of Section 54B of the Act and the benefit related to that of sale of agricultural land by the assessee has to be invested in another agricultural land within a period of 2 years after the date of transaction of capital asset. The Assessing Officer further observed that the assessee sold agricultural land for Rs.91,80,000/- and received the share of Rs.61,20,000/- and claimed benefit of Section 54B of the Act to the extent of Rs.59,23,198/- after taking the index cost of Rs.1,96,802/-. The assessee purchased the agricultural land in his wife’s name and conveyance deed registered for Rs.13,00,000/- only. Therefore, the Assessing Officer held that the assessee is eligible to claim deduction under Section 54B of the Act only for Rs.13,00,000/- and the balance amount of Rs.46,23,198/- was disallowed and ITA No.56/Ahd/2020 Assessment Year: 2010-11 Page 3 of 5 added to the income of the assessee as wrongly claimed under Section 54B of the Act. 4. Being aggrieved by the Assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee and also withdrawn the deduction under Section 54B of the Act granted by the Assessing Officer to the extent of Rs.13,00,000/- and the entire amount of Rs.59,23,198/- was added to the income of the assessee. 5. The Ld. AR submitted that the assessee furnished copy of sale deed of the land during the assessment proceedings wherein it was revealed that the assessee sold six bighas of agricultural land on 17.04.2010. The Ld. AR further submitted that prior to this Sale Deed, the assessee and the purchaser prepared Banakhat as on 19.01.2010 for Rs.91,80,000/- and Sale Deed was registered for Rs.20,00,000/- on 19.04.2010. The assessee was a co-owner and confirming party of the land with two other persons and as per the sale deed the assessee’s share of sale consideration was Rs.61,20,000/-. This was shown as sale value in computing capital gain including cheque and cash. During the course of enquiry in the case of purchaser Shri Saiyad Gulam Haider M. Bukhari, he had accepted the purchase of above property for Rs.92,50,000/- during the financial year 2009-10 and admitted that the amount was paid through cheque of Rs.12,00,000/- and Rs.80,90,000/- in cash. The said purchaser also admitted that document was registered for Rs.20,00,000/- but the deal was for Rs.92,50,000/- and the same amount was given to seller which includes assessee’s mother and other two confirming parties alongwith the assessee. The Ld. AR further submitted that the assessee had claimed capital gain under Section 54B of the Act against the sale consideration of the agricultural land as the assessee purchased agricultural land in the name of wife of the assessee Smt. Madhuben Somabhai Vankar (Parmar) for an amount of Rs.13,00,000/- vide purchase deed dated 27.04.2010. This aspect was explained to the Assessing Officer during the assessment proceedings. The Ld. AR further submitted that the purchase of agricultural land is for Rs.59,23,198/- and to that extent the remaining amount of Rs.46,23,198/- was paid in cash on various dates. The Ld. AR submitted that the observations of the Assessing Officer that for claiming deduction under Section 54B the purchase has to be made in the name of the assessee only and not in any other person’s. The Ld. AR submitted that this is not correct position of law as the purchase ITA No.56/Ahd/2020 Assessment Year: 2010-11 Page 4 of 5 was made in the name of wife of the assessee and the amount was given by the assessee to the seller. Therefore, the claim of exemption under Section 54B of the Act was an appropriate claim. The Ld. AR relied upon the decision of Hon’ble Delhi High Court in the case of CIT vs. Kamal Wahal, 351 ITR 4 and the decision of Hon’ble Rajasthan High Court in the case of Laxmi Narayan vs CIT, 402 ITR 117. The Ld. AR further submitted that the CIT(A) erred in confirming the disallowance of Rs.46,23,198/- and also withdrawing the deduction of Rs.13,00,000/- given by the Assessing Officer which amount to enhancement for which the assessee was not given any notice and the assessee was not heard by the CIT(A). The Ld. AR further submitted that all the documents related to sale deed and the purchase deed was before the CIT(A) and the remand report was also called for from the Assessing Officer but the CIT(A) simply taken cognisance of the statement of the Notary and not taken into account the contents of the sale deed and a purchase deed. Therefore, the Ld. AR submitted that the disallowance made by the Assessing Officer and enhancement made by the CIT(A) is not justifiable and the assessee be granted exemption under Section 54B to the extent of Rs.59,23,198/-. 6. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). The Ld. DR further submitted that the assessee has not purchased the land in his own name and the purchase deed is in the name of the wife of the assessee and, therefore, the CIT(A) has rightly rejected the exemption under Section 54B of the Act. 7. Heard both the parties and perused all the relevant material available on record. It is an undisputed fact that the assessee though registered the documents related to sale deed of agricultural land to the extent of Rs.20,00,000/-but the amount was paid entirely to the extent of Rs.92,50,000/- jointly. It is an undisputed fact that the assessee’s share was Rs.61,20,000/- including cheque and cash. The purchase of the agricultural land was in the same financial year i.e. 2009-10 and the purchase deed dated 27.04.2010 is in the name of assessee’s wife. This fact was also not disputed. The amount given to the seller was from the assessee which can be seen from the documents provided by the assessee during the assessment proceedings as well as before the CIT(A). The assessee has demonstrated that the amount of Rs.13,00,000/- was paid in cheque and remaining amount was paid on various dates in cash. The remand report is solely relying on the statement of the Notary but the actual transaction was not disputed by the Assessing Officer as well as the CIT(A). ITA No.56/Ahd/2020 Assessment Year: 2010-11 Page 5 of 5 Thus, the claim made by the assessee that of deduction under Section 54B of the Act was justifiable as the purchase was made in the name of assessee’s wife for which the assessee has paid the entire amount of Rs.59,23,198/-. Therefore, the CIT(A) was not right in denying the said claim. Appeal of the assessee is allowed. 8. In the result, appeal of the assessee is allowed. Order pronounced in the open Court on this 5 th day of April, 2023. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 5 th day of April, 2023 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad