SOHAN SINGH V. CIT JALANDHAR AND ANR.

ITA/354/2010

AI Insights

The case involves an appeal by Sohan Singh against the decision of the Income Tax Appellate Tribunal, which had dismissed his claim for a deduction under Section 54B of the Income Tax Act, 1961. The deduction was sought for the purchase of agricultural land, which was acquired using compensation received from the acquisition of his own land. The primary legal question was whether the assessee could claim the deduction when the land was purchased in the name of his son. The High Court referenced a previous decision (Jai Narayan v. Income Tax Officer) which clarified that the benefit of Section 54B cannot be extended to an assessee who purchases land in the name of a third party.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 766047 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 20-08-2010
• Assessment Year: misc
• Other Referred Cases: Jai Narayan v. Income Tax Officer
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: AMAN BANSAL
• Keywords: Agricultural Land Purchase; Assessment year 1999-2000; Deduction under section 54B; Income Tax; Compensation received
• Section: 148; 271(1)(c); 54B; 260-A

Judgement Text

" Income-tax Appeal No. 354 of 2010 -1- In the High court of Punjab and Haryana at Chandigarh --- Income-tax Appeal No. 354 of 2010 Date of decision: 20.8.2010 Sohan Singh --- Appellant Versus Commissioner of Income-tax, Jalandhar, Punjab and another --- Respondents --- CORAM: HON’BLE MR. JUSTICE AJAY KUMAR MITTAL HON’BLE MR. JUSTICE MEHINDER SINGH SULLAR --- Present: Mr. Aman Bansal, Advocate for the appellant. --- AJAY KUMAR MITTAL, J, This order will dispose of Income-tax Appeal Nos. 354 and 355 of 2010, filed at the instance of the assessee, as identical questions of law have been raised in these appeals. The facts, however, have been taken from ITA No. 354 of 2010. This appeal filed under Section 260-A of the Income Tax Act, 1961 (for short “the Act”) at the instance of the assessee challenges the order of the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (in short “the Tribunal”) passed on 25.1.2008 in Income-tax Appeal No. 338/ASR/2007, pertaining to the assessment year 1999-2000. Income-tax Appeal No. 354 of 2010 -2- The assessee has claimed that the following substantial questions of law arise for the consideration of this Court: 1- Whether in the facts and circumstances of the present case, the action of the authorities below not to allow the deduction under Section 54B and thereby totally ignoring the ratio as laid down in (2005) 95 ITD 313 (MUMBAI) is legally sustainable in the eyes of law? 2- Whether in the facts and circumstances of the present case, the action of the authorities below in ignoring the factum that the purchase consideration with expenses has been borne by the assessee/ appellant, as son of the assessee/appellant has no source of independent income, is legally sustainable in the eyes of law? 3- Whether in the facts and circumstances of the present case, the impugned orders A-1 to A-3 are legally sustainable in the eyes of law? The facts necessary for adjudicating the present appeal are that the appellant received compensation in 1998 in respect of his land that had been acquired in the year 1995. The Assessing Officer issued a notice dated 16.3.2006, under Section 148 of the Act and assessed the income of the assessee to the tune of Rs. 78,93,896/-, vide assessment order dated 1.11.2006, Annexure A-1. Notice under Section 271(1)(c) of the Act for imposition of the penalty was also issued to the assessee. The assessee preferred appeal before the Commissioner of Income Tax, (Appeals), Jalandhar, Punjab [in short “the CIT(A)”]. Appeal was partly allowed vide order dated 7.5.2007, Annexure A-2. The claim of the assessee in respect of deduction under Section 54B of the Act for the purchase of the agricultural land in the name of his son, amounting to Rs. 19,75,773/- was rejected. The assessee as well as the Revenue filed separate appeals before the Tribunal. The Tribunal dismissed both the Income-tax Appeal No. 354 of 2010 -3- appeals vide Annexure A-3. This is how the assessee is again in appeal before us. We have heard learned counsel for the appellant and have gone through the record with his assistance. The issue that arises for consideration in this appeal is, whether the assessee who has purchased agricultural land in the name of his son from the amount of compensation received on account of acquisition of his land, is entitled to get deduction under Section 54B of the Act. This matter is no longer res integra. This Court earlier had an occasion to consider the provisions of Section 54-B of the Act in Jai Narayan v. Income Tax Officer, (2009) 221 CTR 255= (2008) 306 ITR 335, and after examination thereof had held as under: “In interpreting the words contained in a statute, the Court has not only to look at the words but also to look at the context and the object of such words relating to such matter and interpret the meaning intended to be conveyed by the use of the words under the circumstances. The word “assessee” occurring in s. 54B must be interpreted in such a manner as to accord with the context and subject of its usage. A reading of s. 54B of the Act nowhere suggests that the legislature intended to advance the benefit of the said section to an assessee who purchased the agricultural land even in the name of a third person. Wherever the legislature intended it to be so, it had specifically provided under the provision. The term “assessee” is qualified by the expression “purchased any other land for being used for agricultural purposes”, which necessarily means that the new asset which is purchased has to be in the name of the assessee himself for seeking exemption under s. 54B of the Act. The purchase of agricultural land by the assessee in his son or grandson’s name, therefore, cannot be held entitled to exemption under s. 54B of the Act.” Income-tax Appeal No. 354 of 2010 -4- In view of the observations of this Court, noticed above, there is no scope for interference by this Court in the present appeal. The substantial questions of law as proposed do not arise in this appeal. The appeals are consequently dismissed. (AJAY KUMAR MITTAL) JUDGE (MEHINDER SINGH SULLAR) August 20, 2010 JUDGE *rkmalik* "