Pal Singh S/o Shri Badal Singh, Muzaffarnagar V. ITO, Saharanpur

ITA 930/DEL/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3028 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 22-05-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 17-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V K JIWANI
• Keywords: Capital asset
• Section: 54B; 54F; 142(1); 148; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH SMC : NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 930/DEL/2017 ASSESSMENT YEAR: 2013-14 SH. PAL SINGH, VS. ITO, WARD-3, C/O SH. N.K. ARORA, ADV., SAHARANPUR 219, CIVIL LINES, MUZAFFARNAGAR (PAN: AEWPS1087B) (APPELLANT) (RESPONDENT) ASSESSEE BY : MS. SUMANGLA SAXENA, ADV. & SH SHYAM SUNDER, A.R. REVENUE BY : SH. V.K. JIWANI, SR. DR ORDER THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDE R DATED 15.11.2016 OF THE LD. CIT(A), MUZAFFARNAGAR PERTAIN ING TO ASSESSMENT YEAR 2013-14 AND RAISED THE FOLLOWING GR OUNDS:- 1. THAT ON FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) ERRED IN REJECTING THE AP PEAL WITHOUT APPRECIATING THE FACTS AND LEGAL PROVISIONS AS APPLICABLE IN THE CASE OF APPELLANT. 2. THAT THE LD. CIT(A) AND ASSESSING OFFICER HAVE ERRED IN DISALLOWING THE DEDUCTION AS CLAIMED UNDER SECTION 54B BY PURCHASING AGRICULTURAL LAND IN THE NAME OF WIFE WHO IS NOT HAVING ANY SOURCE OF INCOME AND SOURCE OF INVESTMENT OF HER OWN. 2 3. THAT THE LD. CIT(A) HAS WRONGLY MADE HIS OPINION BY OBSERVING THAT SECTION 54B DOES NOT ANYWHERE PERMIT THE PURCHASE OF AGRICULTURAL LANDS IN THE NA ME OF ANYONE OTHER THAN THE ASSESSEE AND RELIED UPON T HE CASE LAW HAVING DIFFERENT FACTS AND DISCUSSIONS. TH E APPELLANT IS A SENIOR CITIZEN AND RETIRED PERSON HA VING INCOME FROM PENSION AND BANK INTEREST & AGRICULTURE . HE AND HIS WIFE ARE THE FAMILY AND APPELLANT HAS PURCHASED AGRICULTURAL LAND IN THE NAME OF WIFE, WH O IS NEVER ASSESSED TO TAX AND THE AMOUNT OF INVESTMENT IN PURCHASE OF AGRICULTURAL LAND IS INVESTMENT OF APPELLANT, WHICH IS ACCEPTED BY THE ASSESSING OFFIC ER. 4. THAT WIFE OF APPELLANT IS DEPENDENT ON APPELLANT AND SHE WILL BE ONLY LEGAL HEIR ON THE DEATH OF APPELLANT, WHO IS AN OLD PERSON. THE INVESTMENT IN THE NAME OF WIFE IS THE INVESTMENT OF APPELLANT AND THE AGRICULTURAL WORK IS LOOKED AFTER BY THE APPELLANT ONLY. 5. THAT THE CAPITAL GAIN AS COMPUTED BY THE LD. CIT(A) AND ASSESSING OFFICER ARE WRONG AND THE ADDITION OF CAPITAL GAIN AS MADE IS LIABLE TO BE DE LETED. 6. THAT THE LD. CIT(A) HAS ERRED IN NOT APPRECIATIN G THE LEGAL POSITION AS LAID DOWN BY HON'BLE HIGH COU RTS IN WHICH EXEMPTION U/S 54B IS ALLOWABLE IF THE 3 INVESTMENT IN AGRICULTURAL LAND IS MADE IN THE NAME OF WIFE. 7. THAT THE APPELLANT SEEKS LEAVE TO ADD, AMEND, ALTER, ABANDON OR SUBSTITUTE ANY OF THE ABOVE GROUN DS DURING THE HEARING OF THE APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN INDIVIDUAL ENJOYS FROM PENSION, BANK INTEREST AND HAS ALSO SHO WN LONG TERM CAPITAL GAIN ON SALE AGRICULTURAL LAND BEING CAPITA L ASSET AS PER SALE DEED AND AS THE LAND IS WITHIN 8 KM FROM THE MUNICI PAL AREA. NOTICE U/S. 142(1) OF THE I.T. ACT, 1961 DATED 24.12.2013 WAS ISSUED TO THE ASSESSEE. IN COMPLIANCE TO NOTICE ISSUED, ASSESEE F ILED A WRITTEN RELY ON 15.1.2014 STATING THEREIN THAT THE RETURN HAS BE EN FILED ON 15.1.2014. ON GOING THROUGH THE SAME AO OBSERVED T HAT THE ASSESSEE HAS CLAIMED LONG TERM CAPITAL GAIN ON SAL E OF AGRICULTURAL LAND BEING CAPITAL ASSETS. AS PER WORKING OF LONG TERM CAPITAL GAIN, THE LAND PURCHASED BY THE WIFE SMT. KESHO URF SMT . KESHOWATI, ASSESSEE HAS CLAIMED DEDUCTION U/S. 54B OF THE ACT WHICH IS NOT ALLOWABLE. THEREFORE, NOTICE U/S. 148 OF THE ACT WA S ISSUED AFTER RECORDING THE REASONS. IN COMPLIANCE TO NOTICE ISSU ED, ASSESSEE FILED WRITTEN RELY ON 12.5.2015 STATING THEREIN THAT THE RETURN ALREADY FILED ON 15.1.2014 DECLARING INCOME OF RS. 20390/- MAY PLEASE BE TREATED AS RETURN FILED IN COMPLIANCE TO NOTICE ISS UED U/S. 148 OF THE ACT. THE AO WAS OF THE OPINION THAT THE INVESTMENT RELATING TO PURCHASE OF LAND IN THE NAME OF WIFE IS NOT ALLOWAB LE TO BE EXEMPTED 4 U/S 54B OF THE INCOME TAX ACT, HENCE, HE ADDED BAC K THE ADDITION IN DISPUTE IN THE HANDS OF THE ASSESSEE AND ASSESSED T HE INCOME OF THE ASSESSEE U/S. 143(3)/148 OF THE ACT VIDE ORDER DATE D 20.10.2015. AGAINST THE ASSESSMENT ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AND FILED VARIOUS JUDGMENT AND ALSO DISTINGUISH THE JUDGEMENTS QUOTED BY THE AO, BUT LD. CIT(A) HAS DIS MISSED THE APPEAL OF THE ASSESSEE BY UPHOLDING THE ACTION OF T HE AO VIDE HIS IMPUGNED ORDER DATED 15.11.2016. 3. AGGRIEVED WITH THE IMPUGNED ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. LD. COUNSEL OF THE ASSESSEE HAS SUBMITTED THAT L OWER AUTHORITIES HAVE WRONGLY DISALLOWING THE DEDUCTION CLAIMED UNDER SECTION 54B BY PURCHASING AGRICULTURAL LAND IN THE NAME OF WIFE WHO IS NOT HAVING ANY SOURCE OF INCOME AND SOURCE OF IN VESTMENT OF HER OWN. SHE FURTHER STATED THAT LD. CIT(A) HAS WRONGLY MADE HIS OPINION BY OBSERVING THAT SECTION 54B DOES NOT ANYW HERE PERMIT THE PURCHASE OF AGRICULTURAL LANDS IN THE NAME OF ANYON E OTHER THAN THE ASSESSEE AND RELIED UPON THE CASE LAW HAVING DIFFER ENT FACTS AND DISCUSSIONS, WITHOUT OBSERVING THAT ASSESSEE IS A S ENIOR CITIZEN AND RETIRED PERSON HAVING INCOME FROM PENSION AND BANK INTEREST & AGRICULTURE. HE AND HIS WIFE ARE THE FAMILY AND ASS ESSEE HAS PURCHASED AGRICULTURAL LAND IN THE NAME OF WIFE, WH O IS NEVER ASSESSED TO TAX AND THE AMOUNT OF INVESTMENT IN PUR CHASE OF AGRICULTURAL LAND IS INVESTMENT OF ASSESSEE, WHICH WAS ACCEPTED BY 5 THE AO. IT WAS FURTHER SUBMITTED THAT THE WIFE OF A SSESSEE IS DEPENDENT ON ASSESSEE AND SHE WILL BE ONLY LEGAL HE IR ON THE DEATH OF ASSESSEE, WHO IS AN OLD PERSON. THE INVESTMENT IN T HE NAME OF WIFE IS THE INVESTMENT OF ASSESSEE AND THE AGRICULTURAL WORK IS LOOKED AFTER BY THE ASSESSEE ONLY. IN VIEW OF ABOVE, LD. C OUNSEL OF THE ASSESSEE STATED THAT LOWER AUTHORITIES HAVE WRONGLY COMPUTED THE CAPITAL GAIN AND MADE THE ADDITION OF CAPITAL GAIN WHICH IS LIABLE TO BE DELETED. LASTLY, SHE STATED THAT LOWER AUTHORITIES HAVE NOT APPRECIATED THE LEGAL POSITION AS LAID DOWN BY HON' BLE HIGH COURTS IN WHICH EXEMPTION U/S 54B IS ALLOWABLE IF THE INVESTM ENT IN AGRICULTURAL LAND IS MADE IN THE NAME OF WIFE. 5. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS O F THE AUTHORITIES BELOW. 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. I FIND THAT ASSESSEE IS A SENIOR CITIZEN AND RETIRED PERSO N HAVING INCOME FROM PENSION AND BANK INTEREST & AGRICULTURE. HE AN D HIS WIFE ARE THE FAMILY AND ASSESSEE HAS PURCHASED AGRICULTURAL LAND IN THE NAME OF HIS WIFE, WHO IS NEVER ASSESSED TO TAX AND THE AMO UNT OF INVESTMENT IN PURCHASE OF AGRICULTURAL LAND IS INVESTMENT OF A SSESSEE, WHICH WAS ACCEPTED BY THE AO. THE WIFE OF THE ASSESSEE IS DEP ENDENT ON ASSESSEE AND SHE WILL BE ONLY LEGAL HEIR ON THE DEA TH OF ASSESSEE, WHO IS AN OLD PERSON. IN THE PRESENT CASE IN MY CON SIDERED OPINION, THE INTENTION OF THE LEGISLATURE IS TO MAKE INVESTM ENT OF THE CAPITAL GAIN AND THE PURPOSE OF THE LEGISLATURE IS FULFILLE D IF THE LAND IS 6 PURCHASED EITHER ON HIS OWN NAME OR IN THE NAME HIS CLOSED FAMILY MEMBER MAYBE A WIFE, MINOR DAUGHTER OR IN THE NAME OF HIS SON OR HIS GRANDSONS TO WHOM IT WOULD DIRECTLY GO IF A PER SON DIES INTESTATE. HENCE, THE EXEMPTION U/S 54B HAS TO BE ALLOWED INVE STMENT IN AGRICULTURAL LAND IS MADE IN THE NAME OF WIFE, IN V IEW OF THE LAW LAID DOWN BY THE HONBLE HIGH COURTS AS UNDER:- - DECISION DATED 15.2.2006 OF THE HONBLE HIGH COUR T OF MADRAS IN THE CASE OF CIT VS. NATARAJAN WHEREIN IT WAS OBSERVED IN THE (HEAD NOTES) THAT SECTION 54 OF THE INCOME TAX ACT, 1961 CAPITAL GAINS PROFIT ON SALE OF PROPERTY USED FOR RESIDENTIAL HOUSE ASSESSMENT YEAR 1990-91 ASSESSEE, WHO OWNED A HOUSE PROPERTY, SOLD SAME AND PURCHASED A PROPERTY IN NAME OF HIS WIFE ASSESSEE CLAIMED EXEMPTION UNDER SECTION 54 WHETHER SINCE ASSESSEE WAS OWNER OF A HOUSE PROPERTY, HE WOULD BE ENTITLED TO EXEMPTION UNDER SECTION 54 HELD, YES. - DECISION DATED 11.1.2013 OF THE HONBLE DELHI HIG H COURT IN THE CASE OF CIT VS. KAMAL WAHAL WHEREIN IT WAS OBSERVED IN THE (HEAD NOTES) THAT SECTION 54F OF THE INCOME TAX ACT, 1961 CAPITAL GAINS EXEMPTION OF, IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE OWNERSHIP OF NEW PROPERTY ASSESSMENT YEAR 2008-09 WHETHER FOR CLAIMING DEDUCTION OF CAPITAL GAINS UNDER SECTION 54F, NEW RESIDENTIAL 7 HOUSE NEEDS TO BE PURCHASED BY THE ASSESSEE EXCLUSIVELY IN HIS OWN NAME HELD, NO WHETHER, WHERE ASSESSEE PURCHASED NEW HOUSE IN NAME OF HIS WIFE AND NOT IN NAME OF ANY STRANGER WHO WAS UNCONNECTED WITH HIM, EXEMPTION COULD NOT BE DENIED, IF ENTIRE INVESTMENT HAD COME OUT OF PROCEEDS OF OLD PROPERTY HELD, YES (PARA 9) IN FAVOUR OF ASSESSEE. 7. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES E XPLAINED ABOVE AS WELL AS THE CASE LAWS, I AM OF THE CONSIDERED VI EW THAT THE ISSUE IN DISPUTE IS IDENTICAL TO THE CASE LAW CITED ABOVE . HENCE, RESPECTFULLY FOLLOWING THE SAME, I DELETE THE ADDIT ION IN DISPUTE BY ACCEPTING THE APPEAL OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED ON 09-03-2018. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED : 09-03-2018 SR BHATANGAR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.