ZAHID HASAN KHAN,YAMUNA NAGAR V. ITO, WARD -5, YAMUNA NAGAR

ITA 122/CHANDI/2023

AI Insights

The case involves Zahid Hasan Khan, the appellant, who contested the order of the CIT(A) confirming the actions of the Assessing Officer (AO) regarding the reopening of assessment under section 147 and the subsequent additions made on account of long-term capital gains from the sale of agricultural land. The AO had initially assessed the capital gains based on the fair market value of the land as determined from sale deeds of different villages, which the assessee challenged. The Tribunal examined the computation of the indexed cost of acquisition and the denial of deductions under sections 54B and 54F. The Tribunal's decision partly favored the assessee by adjusting the fair market value for capital gains computation but denied the deduction under section 54B for the land purchased in the name of the assessee's wife.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 107730 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 05-09-2024
• Assessment Year: 2007-2008
• Appeal Filed On: 03-03-2023
• Other Referred Cases: CIT Vs. Sham Lal, Kishinchand Chellaram Vs. CIT, Bombay CITY II, Manjit Singh Vs. DCIT, Daljit Singh vs The ITO, W-6(4), Mohali, Gurnam Singh, Mrs Jennifer Bhinde, Kamal Wahal, Dinesh Verma, Kamal Kant Khamboj, Jai Narain vs. ITO, Late Gulam Ali Khan Vs. CIT, C.V. Ramanathan Vs. CIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN
• Assessee Lawyers: DHRUV GOEL; C.A; ITS EARLIER
• Keywords: Set aside; Business income; Capital asset; Fair market value; Cost of acquisition; Reopening of assessment; Capital Gains; Principle of natural justice; Valuation report; Benefit of exemption
• Section: 148; 144; 143(3); 54; 54B; 54F; 139; 2(14); 191

Judgement Text

"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “बी” , चǷीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: PHYSICAL MODE ŵी िवŢम िसंह यादव, लेखा सद˟ एवं ŵी परेश म. जोशी, Ɋाियक सद˟ BEFORE: SHRI. VIKRAM SINGH YADAV, AM & SHRI. PARESH M. JOSHI, JM आयकर अपील सं./ ITA NO. 122/Chd/2023 िनधाŊरण वषŊ / Assessment Year : 2007-08 Zahid Hasan Khan C/o Gupta & Malhotra C.A 14, SC Gupta Lane, Raghunath Puri, Yamuna Nagar बनाम The ITO Ward-5, Yamuna Nagar ᭭थायी लेखा सं./PAN NO: BKJPK4030J अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : Shri Dhruv Goel, C.A राजˢ की ओर से/ Revenue by : Shri Vivek Vardhan, JCIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 05/09/2024 उदघोषणा की तारीख/Date of Pronouncement : 03/12/2024 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/ NFAC, Delhi dt. 03/01/2023 pertaining to Assessment Year 2007-08. 2. In the present appeal, the Assessee has raised the following grounds of appeal: 1. That the learned CIT(A) has erred in law and on facts in confirming the actions of learned AO in reopening of assessment u/s 147. 2. That the learned CIT(A) has erred in law and on facts in confirming the actions of Ld. AO of making additions of Rs. 2,49,21,043/- on account of long term capital gain from sale of agriculture land. 3. That the learned CIT(A) has erred in law and on facts in confirming the actions of Ld AO of computing indexed cost of acquisition of the land at Rs. 6,41,457/- as against Rs. 1,10,14,333/- claimed by the assessee. 4. That the learned CIT(A) has erred in law and on facts in not allowing deduction u/s 54B of Rs. 1,49,52,000/- claimed by assessee. 5. That the learned CIT(A) has erred in law and on facts in not allowing deduction u/s 54F of Rs. 35,00,000/- claimed by assessee. 2 6. That the learned CIT(A) has erred on facts in confirming the additions of Rs. 2,49,21,043/- made by the AO by observing that assessee had not filed any details during appellate proceedings. 7. That the learned CIT(A) has erred in law and on facts in passing the order u/s 250 without adherence to principles of natural justice. 8. That the appellant craves leave to add, alter, amend or to substitute the above grounds of appeal either before or at the time of hearing of case.” 3. Briefly the facts of the case are that the assessment in this case was completed under section 144 r.w.s 147 of the Act vide order dt. 13/03/2015 wherein the AO brought to tax long term capital gains on sale of land amounting to Rs. 2,49,21,043/- in the hands of the assessee. In this case, it is noted that the AO had issued two notices under section 148 of the Act. In terms of reasons recorded before issuance of the first notice under section 148 on 21/23.03.2014, the AO noted that the assessee has sold his 42 Kanal 0 marla land situated at Village Kansapur to M/s Anchor Realters Pvt. Ltd. New Delhi for Rs. 2,14,72,500/- on 18/04/2006. In terms of the reasons recorded before the issuance of second notice under section 148 on 21/25.03.2014, the AO noted that the assessee has sold another piece of his agriculture land situated at Vilage Kansapur measuring 8 Kanal 0 Marla to M/s Som Build Well Pvt. Ltd. New Delhi for Rs. 40,90,000/- on 22.05.2006. As per the AO, the assessee’s land is covered within the ambit of capital asset as per the provision of Section 2(14) as the distance of land sold by the assessee in Village Kansapur falls within 8 Km from the municipal limit of Jagadhri. Further, for the purpose of determining the value of land as on 01.04.1981, the AO stated that the information has been sought regarding Fair Market Value (FMV) of land during the year 1981-82 from Sub Registrar, Jagadhri who has in turn supplied copy of two sale deeds No. 1789 dt. 11/06/1981 and 2354 dt. 27/06/1981 in respect of sale of land situated at Village Jaroda during the year 1981-82. Basis the sale consideration as well as FMV of the land as on 01/04/1981 as computed based on information received from the office of the Sub Registrar, the AO determined the long term capital 3 gains and held that income to the extent of Rs. 2,49,21,043/- has escaped assessment and since the assessee did not file any return of income, the reasons were recorded and notices u/s 148 were issued to the assessee, however, there was no compliance on the part of the assessee in response to the notices so issued from time to time. Thereafter AO proceeded and completed the assessment under section 144 bringing to tax Long Term Capital Gain (LTCG) amounting to Rs. 2,49,21,043/- in the hands of the assessee. 4. Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A), who after taking under consideration the submissions filed by the assessee and after calling for the Remand Report and the rejoinder filed by the assessee, has sustained the findings of the AO as far as the computation of capital gains amounting to Rs. 2,49,21,040/- is concerned. Further, regarding the claim of exemption under Section 54B and 54F made for the first time during the appellate proceedings, the Ld. CIT(A) has stated that the same cannot be entertained in absence of valid return of income having ever been filed by the assessee. 5. Against the said findings and the directions of the Ld. CIT(A), the assessee is in appeal before us. 6. During the course of hearing, the Ld. AR submitted that broadly two issues are involved in the present case. Firstly, the incorrect computation of cost of acquisition by way of fair market value of land as on 01/04/1981 and secondly, denial of claim of deduction under section 54B of the Act. In this regard, it was submitted that the assessee has claimed index cost of acquisition of Rs. 1,10,14,333/- whereas the AO has allowed the index cost of acquisition only to the extent of Rs. 641,457/- and secondly, as against the claim of deduction of Rs. 1,49,52,000/- under section 54B, the whole of the claim has been denied by the Ld. CIT(A). 4 6.1 Firstly, regarding the cost of acquisition, it was submitted that the AO has taken the cost of acquisition as on 01/04/1981 on the basis of sale deed dt. 27/06/1981 in Village Jaroda, Dist. Yamuna Nagar which was supplied by the Sub Registrar, Jagadhri. It was submitted that the AO has not explained why such deed is indicative of FMV of land as on 01/04/1981 even though the said land was situated in Village Jaroda while the assessee’s land was situated in Village Kansapur. It was further submitted that the copy of the sale deed or communication so received from the Sub- Registrar was not provided to the assessee. It was submitted that such action of relying on third party evidence without providing a copy to the assessee is bad in law and such evidence deserves to be set aside and in support, reliance was placed on the decision of Hon’ble Punjab & Haryana High Court in case of CIT Vs. Sham Lal (1981) 127 ITR 816 and decision of Hon’ble Supreme Court in case of Kishinchand Chellaram Vs. CIT, Bombay CITY II (1980) 125 ITR 713(SC). 6.2 It was further submitted that the assessee, on his part, has relied on purchase transaction through open auction in nearby Village Bhatauli, Tehsil Jagadhri whereby Ministry of Defence, Government of India had purchased 4 Kanal 10 Marla land for Rs. 1,91,000/- on 03/11/1981. It was submitted that a transaction involving purchase by Government of India in open auction is a much more credible proof of the fair market value than sale deeds executed by private parties and in support, reliance was placed on the decision of Coordinate Chandigarh Bench in case of Manjit Singh Vs. DCIT (2013) 21 ITR 149 wherein it was held that the FMV on 01/04/1981 cannot be held to be equal to the value as per another sale deed as such values are usually understated. It was submitted that the ld CIT(A) has failed to appreciate the same and sustained the findings of the AO without even rebutting as to why the same is not found acceptable. It was accordingly stated that the reliance by the assessee on purchase by the Government of India is more credible and reliable 5 basis of determination of FMV of land as on 01/04/1981 and same should be accepted. 6.3 It was further submitted that the assessee’s son Naseem Ahmad had also sold adjoining piece of agriculture land in village Kansapur and in that case also, the AO had applied similar rates of Village Jaroda, which on appeal, the Ld. CIT(A)-3 Gurgaon has accepted the plea of the assessee that the FMV as on 01/04/1981 should be calculated as per the purchase made by Ministry of Defence in Village Bhatauli and our reference was drawn to the findings of the ld CIT(A)-3 Gurgaon at para 8 of his order dated 22/03/2022 which reads as under: “In this case the appellant has sold agricultural land for Rs. 30,93,063/- upon which AO has computed long term capital gain by adopting indexed cost of acquisition at Rs. 77,616/- resulting into capital gain of Rs. 30,15,450/-. The AO has made the valuation as on 01.04.1981 on the basis of sale deed no. 2354 dt. 27/06/1981 as per which 4 kanal, 9 marla of land was sold for Rs. 11,000/ -. On such basis the AO computed the cost of the land sold by the appellant (6 kanal, 1 marla) at Rs. 14,955/-. During the appellate proceedings it has been explained that the appellant is a farmer and he has invested the sale consideration in the purchase of new agricultural land and thus, was eligible for deduction u/s 54B of the Act. Further, it was explained that the AO has applied rates of land sold situated in village- Jaroda which was about 6.7 km away from the land sold by the appellant. The appellant has given particulars of comparable lands acquired by the Ministry of Defence for Rs. 1,91,000/- measuring (04 kanal, 10 marla) situated in village- Bhatauli whose distance was less. On such basis, the value of land sold by the appellant as on 01.04.1981 worked out for Rs. 2,56,789/-(index cost of acquisition at Rs. 13,32,734/-). On such basis long term capital gain was computed by the appellant at Rs. 17,60,329/-. On consideration of facts, it is found that the capital gain in this case should have been worked out on the basis of land acquired by Ministry of Defence. On such basis the capital gain in this case works out at Rs. 17,60,329/-. The AO in the remand report has stated that the appellant was eligible for deduction u/s 54B of the Act for Rs. 17,74,320/-. The AO in the remand report has not given any specific comment in relation to computation of cost on the basis of land sold to Ministry of Defence. Accordingly, it is directed that income in this case should be computed by adopting long term capital gain at Rs. 17,60,329/- and deduction u/s 54B for Rs. 17,74,320/-. Accordingly, the appeal filed by the appellant is hereby allowed.” 6 6.4 It was submitted that the said order of the Ld. CIT(A) has not been challenged in appeal by the Revenue and same has since attained finality and in light of similarity of facts and circumstances of the case, the assessee plea deserves to be accepted as per principles of consistency and reliance was placed on the decision of Hon’ble Punjab & Haryana High Court in case of CIT Vs. Ravinder Kaur in ITA No. 240 of 2009 (O&M) wherein the Hon’ble High Court has held as under: “ It was not disputed by learned counsel for the revenue that the husband of the assessee, Shri Paramjit Singh also had 25% share in the said property and in his case, the Tribunal had adjudicated the issue in his favour and accepted the valuation shown by him and the order of the Tribunal was accepted by the revenue as no further appeal was filed against it. In such circumstances, it would not be appropriate to adopt two different valuations in respect of identical shares in the same property for the same period.” 6.5 It was accordingly submitted that the FMV of land as on 01/04/1981 should be taken at Rs. 2122/- per marla as per the open auction purchase by the Government of India as against Rs. 123.60/- per marla considered by the AO and accepted by the Ld. CIT(A). 6.6 Now, coming to the second issue relating to claim of deduction under section 54B of the Act, it was submitted that the assessee after carrying out the sale of his agriculture land has purchased various pieces of agriculture land for a total consideration of Rs. 1,49,52,000/- and the necessary details were duly submitted before the Ld. CIT(A) and it was prayed that deduction under section 54B should be allowed on such purchase of agriculture land while computing the income by way of long term capital gains. It was submitted that the ld CIT(A) however has denied such claim holding that the same cannot be entertained in absence of income tax return being filed by the assessee. It was submitted that such observation by the Ld. CIT(A) cannot be sustained as there is no such provision in the Act as applicable for A.Y. 2007-08 which restricted claim under section 54B in absence of filing of the return of income. It was 7 submitted that such restriction has only been provided by way of amendment to 6th proviso to Section 139 by Finance Act No. 2 of 2019 and such amendment has been made effective prospectively from A.Y. 2020-21 onwards. Further, reliance was placed on the decision of Coordinate Delhi Bench in case of Mayur Batra (ITA No. 1002/Del/2018), Mumbai Bench decision in case of Prashant Chandra (ITA No. 619/Mum/2023), and Bangalore Bench decision in case of Thimme Gowda Shekha (ITA No. 1080/Bang/2022). It was accordingly submitted that the assessee be allowed the necessary relief under section 54B amounting to Rs. 1,49,52,000/-. 7. Per contra, the Ld. DR has relied on the order of the lower authorities. It was submitted that there was non-compliance on the part of the assessee before the AO resulting in passing of the order under section 144 r.w.s 147 of the Act and therefore, basis the information in his possession that the assessee has sold a piece of land which falls within the definition of capital asset under section 2(14) of the Act and after calling for the necessary information from the Sub-Registrar office, the AO has rightly computed the capital gain under the head LTCG. 8. Regarding AR’s contention that the copy of the sale deed which were submitted by the Sub Registrar, Jagadhari and which has been relied on by the AO while determining the FMV of land as on 01/04/1981 was not shared with the assessee, it was submitted that all the necessary details in terms of the particulars of land sold, the location, the parties to the transaction, date of execution as well as the sale consideration has been duly mentioned as part of the reasons so recorded by the AO. It was submitted that since the assessee did not file the return of income and there has been complete non- compliance on his part during the course of assessment proceedings, there was no occasion for the AO to share the copy of the sale deeds so obtained from the Sub Registrar, Jagadhari with the assessee nor such details were sought by the assessee. It 8 was further submitted that the said information has been duly stated by the AO in the order so passed under section 144 r.w.s 147 of the Act and the assessee was fully aware of the contents of the assessment order when the same was challenged before the Ld. CIT(A) and thus, the assessee was fully ceased of the matter and cannot claim ignorance thereof. It was accordingly submitted that there is no merit in the contention so raised by the assessee as all the necessary information is on record and the assessee has the requisite opportunity before the Ld. CIT(A) to rebut the findings of the AO. 9. Further, referring to the findings of the AO in the Remand Report so submitted during the appellate proceedings, the Ld. DR submitted that the assessee’s land was situated in Village Kansapur and the copy of the Fird/Intkal furnished by the assessee relates to land situated in Village and Mauja Bhatauli which cannot be accepted as the assessee’s land is situated at much further distance than Village Bhatauli. It was further submitted that the Ld. CIT(A), Panchkula in its order dt. 13/10/2016 in the case of Shri Kuldeep Singh has considered the cost of acquisition of land situated in Village Ratauli as on 01/04/1981 @ 85000/- per acre on the basis of valuation report of the approved valuer and the same should be considered as both villages Kansapur and Ratauli are situated closely and there is no much difference / distance between two and it would be appropriate to adopt the cost of acquisition of land taking into consideration the valuation report in respect of land situated in Village Ratauli @ 85,000/- per acre as against the assessee’s claim of 3,40,000/- per acre in respect of land situated at Village Bhatauli. 10. Further regarding the claim of deduction under section 54B of the Act, referring to the Remand Report submitted by the AO during the appellate proceedings, the Ld. DR submitted that the assessee has furnished a list comprising of 17 pieces of new agricultural land purchased for total purchase consideration of Rs. 1,49,52,000/-. The assessee has also furnished copies of 9 registered purchase deeds as documentary evidence. However, on examining the registered purchase deeds dated 13.02.2017 and 06.02.2017 as mentioned at Sr. No. '16' & '17' of the said list for purchase of land for purchase consideration of Rs.11,20,000/- and Rs.25,50,000/-, it was submitted that both these pieces of land have been purchased by the assessee exclusively in the name of his wife Smt. Sulekha. As the assessee has not purchased the new capital asset viz. agricultural land in his name as such he was not entitled to deduction claimed u/s 54B of the Income Tax Act, 1961 in view of the Punjab & Haryana High Court's decision in the case of Jai Narain vs. ITO 306 ITR 335, wherein it has been held that deduction u/s 54B of the Income Tax Act, 1961 is not admissible if the new capital asset is purchased in the name of any other family members of his family. Thus the assessee's claim of deduction u/s 54B of the Income Tax Act, 1961 is not tenable & rightly denied by the ld CIT(A). 11. In his rejoinder, the Ld. AR submitted that the assessee has requested for considering the fair market value of the land as in 1981 as per value given in the mutation no. 464 dated 3/11/1981 in nearby Village Bhatauli, Tehsil Jagadhri whereby Ministry of Defence, Government of India through open auction had purchased 4 Kanal 10 Marla land for Rs. 1,91,000/- on 03/11/1981. It was submitted that the AO in his remand report has rejected the value as adopted by his predecessor who had adopted the value of land situated in Village Jaroda and has substituted the value of land situated in Village Ratauli which is much nearer. However, he has accepted the fact impliedly that he has no documents/ evidences in his possession in respect of value of land in the village wherein the assessee had sold his land. It was submitted that the AO in his remand report has not commented against the value as requested by the assessee which is based not upon the report of the valuer but on the basis of value of land which was sold off in public auction by the Ministry of Defence, Govt, of India. It was submitted that it is unfair on the part of the AO to oppose a 10 legitimate demand by the assessee and that too to extract more revenue. It was submitted that incidentally, the road distance of Jaroda Village i.e. the village whose registered deed the AO had relied in the original assessment order, from the village in which land is sold is app. 6.7 Kms whereas the aerial distance is app. 2.9 Kms and the assessee has relied upon the value of land sold in Bhatauli Village which is 6.7 Kms by road but the aerial distance as provided u/s 2(14) (iii) (b) is only 2.4 Kms and copies of Google Maps as downloaded from the internet were duly submitted before the lower authorities. It was accordingly submitted that the value of land as on 01.04.1981 as requested by the assessee may kindly be accepted especially in light of the fact that the same has been accepted in case of the assessee’s son on principle of parity. 12. As regards the claim of deduction under section 54B, it was submitted that out of 17 pieces of agricultural land purchased by the assessee, the AO’s objection is restricted to two plots valuing at Rs 25,50,000/- and Rs 11,20,000/- which were purchased by the assessee in the name of his wife. Therefore, as far as the remaining 15 pieces of agricultural land, there is no dispute that the assessee is eligible for claim of deduction under section 54B of the Act. As far as the land purchased in the name of the wife of the assessee is concerned, it was submitted that the wife of the assessee is an illiterate, pardanashin homemaker, that she does not have any independent income of her own and that the assessee had purchased land in the name of his wife to provide her financial security and therefore, to deprive her from the financial security is against the spirit and intent of the legislature and the assessee be allowed the necessary deduction under section 54B of the Act. 13. We have heard the rival contentions and purused the material available on record. The assessee had sold two pieces of land measuring 42 Kanal and 8 Kanal situated in Village & Mauja Kansapur through two registered deeds 11 dated 18.04.2006 and 22.05.2006 for a total sales consideration of Rs. 2,55,62,500/-. The land has been held as capital asset by the AO in terms of section 2(14) of the Act as the same was situated within 8 kms from the Municipal Limits of Yamuna Nagar. The said facts and findings of the AO have not been disputed by the assessee. Therefore, as far as the nature of the land being sold, it is not in dispute that the same qualifies as capital asset and gains arising on its transfer are liable for tax under the head “capital gains”. Further, it is also not in dispute that the full value of consideration which has to be considered for the purposes of computation of capital gains is Rs 2,55,62,500/-. 14. The limited dispute and matter under consideration relates to determination of cost of acquisition and consequent indexed cost of acquisition, being the transfer of long term capital asset while computing the capital gains. The Assessing Officer has adopted the cost of acquisition of the land, being the fair market value of land as on 01/04/1981 based on a registration sale deed No. 2354 executed on 27.06.1981 in respect of land situated in Village Jaroda, Tehsil Jagadhri which has been contested by the assessee and infact, the AO in his remand report submitted during the appellate proceedings has himself stated that “the Fair Market Value adopted by the Assessing, Officer at the time of assessment is also not considered, to be correct & logical, being adopted on the basis of land situated in some other village.” The AO in his remand report has also contested the fair market value of the land basis fird/intkal as so submitted by the assessee relating to transaction through open auction in nearby Village Bhatauli, Tehsil Jagadhri whereby Ministry of Defence, Government of India had purchased 4 Kanal 10 Marla land on 03/11/1981 stating that the assessee's land is situated in Village Kansapur at much farther distance than the Village Bhatauli. The AO in the remand report has however proposed to adopt the fair market value of land on the basis of land situated at village Ratauli in the case of another assessee, Sh. Kuldeep 12 Singh as approved by the ld CIT (Appeals), Pankchula in his order dated 13/10/2016 stating that both the Villages Kansapur and Ratauli are situated closely and there is no much distance/difference between the both. We therefore, have a situation where the land which has been sold and whose fair market value has to be determined is situated at village Kansapur and since, there is no material available on record as to the fair market value of land at Village Kansapur, the AO has proposed to adopt the fair market value of land situated at village Ratauli where as the assessee’s contention is that the fair market value of land situated at Village Bhatauli be considered. The reasoning adopted by the AO is that Villages Kansapur and Ratauli are situated closely and there is no much distance/difference between the both, however the exact distance has not been specified whereas the assessee has submitted that the aerial distance between village Kansapur and Village Bhatauli is only 2.4 kms and in the case of the assessee’s son, who had also sold his share of agricultural land at village khansapur, the proximity/distance between the two villages has been considered and basis the same, value of land at village Bhatuali has been considered and accepted by the ld CIT(A) in a latter decision to arrive at the fair market value and the said matter has attained finality in absence of further appeal by the Revenue. Given the parity of facts where the assessee and his son have sold land situated at same village during the same period to the same party, we don’t see any justifiable basis to deviate and adopt two different valuations and our view is fortified by the ratio laid down by the Hon’ble Punjab and Haryana High Court in case of Ravinder Kaur (supra) wherein it was held that it would not be appropriate to adopt two different valuations in respect of identical shares in the same property for the same period. Further, we find merit in the contention advanced by the ld AR that the price which an asset can fetch in an open market auction rather than privately negotiated transaction would be a better determinant of the fair market price of the asset as so held by the Coordinate Bench in case of Manjit Singh (supra) as well and in that view of 13 the matter, the fair market value of the land basis fird/intkal as so submitted by the assessee relating to transaction through open auction in nearby Village Bhatauli, Tehsil Jagadhri whereby Ministry of Defence, Government of India had purchased 4 Kanal 10 Marla land on 03/11/1981 would be a better determinant of the fair market value of the land that was sold by the assessee. The AO is accordingly directed to adopt the said value being the fair market value of the land as on 01/04/1981 for the purposes of determining the cost of acquisition and resultant indexed cost of acquisition while computing the capital gains in the hands of the assessee. In the result, the ground no. 3 of the assessee’s appeal is allowed. 15. Now, coming to the matter relating to claim of deduction under section 54B, it is a matter of record that such claim was not made in the return of income or during the course of assessment proceedings, however, such a claim was made for the first time during the appellate proceedings before the ld CIT(A) and necessary documentation in support thereof were submitted and remand report was called from the AO. Being a legal claim, there is nothing under law for the impugned assessment year 2007-08 which prevented the ld CIT(A) in examining such a claim more so where the AO has not objected to such a claim in his remand report except where the agriculture land has been purchased in two instances in the name of wife of the assessee. We refer to remand report dated 10/05/2018 submitted by the AO during the appellate proceedings and the relevant contents thereof read as under: “As regards the assessee's claim with regard to deduction u/s 54B of the Income Tax Act, 1961, the assessee has furnished a list comprising of 17 pieces of new agricultural land purchased for total purchase consideration of Rs. 1,49,52,000/-. The assessee has also furnished copies of registered purchase deeds as documentary evidence. However, on examining the registered purchase deeds dated 13.02.2017 and 06.02.2017 as mentioned at Sr. No. '16' & '17' of the said list for purchase of land for purchase consideration of Rs.11,20,000/- and Rs.25,50,000/-, it is submitted that both these pieces of land have been purchased by the assessee exclusively in the name of his wife Smt. Sulekha. As the assessee has not purchased the new capital asset viz. agricultural land in his name as such 14 he is not entitled to deduction claimed u/s 54B of the Income Tax Act, 1961 in view of the Punjab & Haryana High Court's decision in the case of Jai Narain vs. ITO 306 ITR 335, wherein it has been held that deduction u/s 54B of the Income Tax Act, 1961 is not admissible if the new capital asset is purchased in the name of any other family members of his family. Thus the assessee's claim of deduction u/s 54B of the Income Tax Act, 1961 is not tenable & accepted.” 16. In view of the remand report so submitted by the AO and referred to by the ld DR during the course of proceedings before us, we find that no dispute has been raised by the AO as far as claim of deduction in respect of agriculture land purchased in the name of the assessee is concerned and the only dispute relates to where the agriculture land has been purchased in the name of wife of the assessee and in this regard, the AO has referred to the decision of the Hon’ble Punjab and Haryana High Court in case of Jai Narain (supra) wherein it has been held that deduction u/s 54B of the Income Tax Act, 1961 is not admissible if the new capital asset is purchased in the name of any other family members of his family. Infact, the said decision has been followed subsequently in case of Dinesh Verma and Kamal Kant Khamboj by the Hon’ble Punjab and Haryana High Court. The ld AR has not brought on record any latter decision of the Hon’ble Punjab and Haryana High Court or any decision of the higher authority reversing or taking a different view in the matter. 17. Infact, a similar matter has been examined by the Coordinate Chandigarh Benches in case of Daljit Singh vs The ITO, W-6(4), Mohali 1428/chd/2018 dated 14/09/22 wherein (speaking through one of us), we have followed the dicta laid down by the Hon’ble Punjab and Haryana High Court, being the jurisdictional High Court and the discussion therein read as under: “14. I have heard the rival contentions and purused the material available on record. Firstly, it is noted that various legal authorities have been cited at the Bar from both the sides in support of their rival contentions. Here it is relevant to note that the legal proposition so arrived at in these cases have been arrived at taking into consideration relevant facts and circumstances of the respective cases. It is therefore essential to set out the facts of the present case as emerging 15 from the records before I examine the applicability of these authorities in the context of the said facts. 14. In the present case, the sequence of events and relevant dates are as follows. The assessee executed a will on 10/04/2007 where on his death, it has been stated that all his properties will devolve on his grandson. The sale deed for transfer of original agriculture land was executed by the assessee on 11/11/2009. The fresh purchase of another agriculture land was done through agreement to sell by the assessee on 10/01/2020 and it is clear that the consideration for purchase of the agriculture land was paid by the assessee out of sale proceeds of the original agriculture land. The assessee thereafter expired on 17/06/2010. The notice u/s 148 was issued by the AO in name of legal heir, the grandson of the assessee on 24/03/2017, thereafter the return in response to the said notice was filed by the legal heir, the grandson of the assessee on 22/06/2017. In the return so filed by the legal heir, the grandson of the assessee, capital gains on sale of agriculture land by the late assessee has been offered to tax at Rs 11,62,500/- and thereafter, the deduction u/s 54B has been claimed towards purchase of another agriculture land by the late assessee (though in name of the legal heir) resulting in nil taxability on the said transaction. The assessment thereafter u/s 143(3) r/w 147 was completed by the AO on 06/11/2017 in name of the legal heir, the grandson of the assessee wherein the deduction so claimed under section 54B was not allowed and capital gains on sale of agriculture land were brought to tax in the hands of the legal heir. 15. In case of Late Gulam Ali Khan Vs. CIT (supra), the issue for consideration before the Hon’ble Andhra Pradesh High Court was whether the legal representative was entitled to claim the exemption under section 54 of the Act. In that case, briefly the facts of the case were that Late Mir Gulam Ali Khan, during his lifetime, sold his residential house in December 1975 and immediately, thereafter, he entered into an agreement for purchase of another house and paid an advance amount of Rs. 1,000/- by way of earnest money and due to his death in April 1976, the transaction was subsequently completed by the legal representative of the deceased and house was purchased in December 1976, within one year of date of sale of the original house. In the said facts and circumstances of the case, the Hon’ble Andhra Pradesh High Court rejected the contention of the Revenue that for the purpose of Section 54 of the Act, the person who sold the house must be the same as the person who purchased the house. It was held by the Hon’ble High Court that the object of granting exemption under section 54 of the Act is that the person who sells the residential house for the purpose of purchasing another house must be given exemption so far as the capital gain are concerned. And as long as the sale of the house and purchase of another house are part of the same scheme, the lapse of some time between the sale and purchase makes no difference. It was held by the Hon’ble High Court that the word “assessee” must be given a wide and liberal interpretation so as to include his legal heirs also. There is no warrant for giving too strict an interpretation to the word “assessee” as that would frustrate the object of granting the exemption and considering the fact that the very same assessee immediately after the sale of the house entered into an agreement for purchasing of another house and paid a sum of Rs. 1,000/- as earnest money and subsequently the legal representative completed the transaction within a period of one year from the date of the death of the deceased, it was held that the sale and purchase are two links in the same chain and accordingly matter was 16 decided in favour of the assessee and while deciding so, the Hon’ble High Court relied on the earlier decision of Hon’ble Madras High Court in the case of C.V. Ramanathan Vs. CIT [1980] 125 ITR 191 and it would be equally relevant to refer to the said decision of the Hon’ble Madras High Court. 16. In case of C.V. Ramanathan Vs. CIT (supra), the question for consideration before the Hon’ble Madras High Court was whether the Tribunal was right in holding that the provision of Section 54 of the Act are not applicable to the assessment made on the legal heirs of the deceased assessee. In that case, late Shri C.V. Venkateswaran executed a will in July 1966 wherein he appointed his son, Shri C.V. Ramanathan as the executor and certain bequests were made in the name of his wife and married daughters and the remainder was given to his son absolutely. In September 1969, he sold a residential house, thereafter in November 1969, he purchased a vacant site for which he paid certain advance of Rs 3000/- and a draft sale deed was also got prepared, but before this sale could be executed, he died in December 1969 and the sale deed was thereafter executed in favour of his son in June 1970. A building was put up and construction was completed in September 1971 and the son and his family resided therein. Subsequently, the assessment proceedings were commenced in the hands of his son, being the legal heir of the deceased assessee and claim was made under section 54 of the Act which was rejected by the ITO and upheld by the Tribunal. On further appeal before the Hon’ble High Court, the Hon’ble High Court held that the whole scheme behind section 54 is to give relief to the assessee who had reinvested the capital gain by substituting another property for the one which was sold. It was held by the Hon’ble High Court that in the present case, Shri Venkateswaran had paid an advance for the purpose of acquisition of the property to serve as a residential accommodation for him and unfortunately, before the conveyance could be executed in his favour, he passed away and the sale deed therefore had to be executed in favour of the son. It was held by the Hon’ble High Court that the Late assessee was the vendor and capital gain are to be taxed in his hands and the assessment on his son is only as his legal representative and as per Section 54, the later events i.e, purchase within two years have to be taken into account and to see whether said condition is specified or not. It was held by the Hon’ble High Court that the legal representative cannot be differentiated from the assessee for this purpose and where he would be liable to pay tax, he cannot be denied the benefit of Section 54 of the Act which forms part of the scheme of taxation of capital gains. It is also relevant to note that the Hon’ble High Court referred to the contention advanced on behalf of the Revenue that where the assessee was the deceased, though he had sold the property but he has not purchased and built another in its place and where the assessee was the legal representative, he had not sold the property though he may have acquired a new one and rejected the said contention as mere delimma holding that scheme of taxation of capital gains did not expressly stipulate that the vendor and the purchaser must be same. The benefit of section 54 was accordingly granted to the legal heir in whose hands the assessment was framed by the AO. 17. In the aforesaid two cases, we find that the issue for consideration before the Hon’ble High Courts was claim of deduction under section 54 in the hands of the legal representative on behalf of the deceased assessee where the subsequent transaction of purchase of new property was initiated by the late assessee during his life time for the purposes of his own residence however on account of death 17 of the assessee, the said transaction was subsequently completed by and in the name of the legal representative. In that factual background, it was held that the word “assessee must be given a wide and liberal interpretation so as to include his legal heirs and the legal heirs cannot be differentiated from the assessee and where he was liable to pay the tax, he cannot be denied the benefit of section 54 of the Act. In the instant case, we find that both the transaction of sale of agriculture land and subsequent transaction of purchase of another piece of agriculture land were undertaken by the deceased assessee himself during his life time and on account of death of the assessee, the legal heir was brought on record and proceedings were subsequently initiated in the hands of the legal heir, the grandson of the assessee. Therefore, we find that unlike the aforesaid two cases, as far as satisfaction of the conditions stipulated in section 54B are concerned, there is no question of any impossibility of performance by the assessee in the present case as he himself has purchased another agriculture land and paid the consideration during his lifetime and there was nothing left to be done and which has actually been done by the grandson after the expiry of the assessee. We therefore find that these two cases are distinguishable on facts and doesn’t support the case of the assessee even though the assessment is made in the hands of the grandson as legal heir on behalf of the assessee. 18. Now, coming back to the undisputed fact that where the fresh investment in purchase of another agriculture land, out of sale proceeds of the original agriculture land, was made by the late assessee during his lifetime, in individual name of his grandson, all we have to consider is whether the same satisfies the conditions stipulated in section 54B of the Act. 19. In case of Gurnam Singh (Supra), the assessee had purchased another piece of agriculture land in his name and in name of his only son as co-owner, the Hon’ble Punjab & Haryana High Court upheld the findings of the Tribunal holding that where out of the sale proceeds, the assessee had purchased another piece of agriculture land, merely because in the sale deed, the assessee’s son was shown as co-owner, it would not make any difference as the land so purchased was being used by the assessee for agriculture purposes and it is not the case of the Revenue that the land was being used exclusively by his son. The said decision of the Hon’ble Punjab & Haryana High Court is distinguishable on facts as in the instant case, the land is purchased solely in the name of the grandson who eventually will use it as the assessee had since expired with few months of executing the said transaction. 20. In case of Mrs Jennifer Bhinde (supra), the new residential property was purchased by the assessee jointly with her husband, the Hon’ble Karnataka High Court held that where the entire investment has flown from the assessee and no consideration has flown from her husband, merely because in the sale deed, assessee’s husband name is also mentioned, the same would not disentitle the assessee and the assessee would continue to be entitled for the benefit of section 54 of the Act for the entire investment made by her. It is again a case of joint investment in name of the assessee and her husband and while holding so, the Hon’ble Karntaka High Court has followed the decision of the Hon’ble Punjab & Haryana High Court in case of Gurnam Singh (supra). 21. In case of Kamal Wahal (supra), where the entire investment in purchase of the new house had come out of the sale proceeds of the original property and 18 the new house was purchased in name of wife of the assessee, applying the rule of purposive construction and the object which the section seeks to achieve, the Hon’ble Delhi High Court held that for purposes of section 54F, the new residential house need not be purchased by the assessee in his own name nor it is necessary that it should be purchased exclusively in his name. This decision we find is pari- materia with the facts in the instant case and supports the case of the assessee where the entire investment in purchase of agriculture land has been made out of sale proceeds of the original agriculture land and the agriculture land so purchased is in name of the grandson of the assessee. At the same time, before applying the ratio laid down therein in the instant case, it is essential to refer to the decisions of the Hon’ble Jurisdictional Punjab & Haryana High Court as well. 22. In case of Jai Narayan (supra), the issue for consideration before the Hon’ble Punjab & Haryana High Court was whether the assessee who had purchased the land in his son and grandson’s name after the sale of the agriculture land would be entitled to the benefit of exemption under section 54B of the Act. The Hon’ble High Court held that a reading of section 54B nowhere suggests that the legislature intended to advance the benefit of the said section to an assessee who purchased the agriculture land even in the name of a third person and the term “assessee” is qualified by the expression “purchased any other land for being used for agriculture purposes” which necessarily means that the new asset which is purchased has to be name of the assessee himself for seeking exemption under section 54B of the Act. It was accordingly held by the Hon’ble High Court that the purchase of agriculture land by the assessee in his son or grandson’s name cannot be held entitled to exemption under section 54B of the Act. 23. We find that a similar view has been taken in case of Dinesh Verma (supra) wherein the Hon’ble Punjab & Haryana High Court didn’t agree with the view of the Tribunal wherein the Tribunal observed that as long as funds from original sale of the property was invested, the assessee can purchase the new asset in name of his wife taking into consideration such as stamp duty, social considerations, security for ladies, etc. The Hon’ble High Court held that Section 54B requires the assessee to purchase the property out of sale consideration of the capital asset and it doesn’t entitle the assessee the benefit conferred therein where the subsequent property is purchased by a person other than the assessee including a close relative even such as wife or children and where the legislature intended conferring such a benefit, it would have provided for the same expressly. It has been held by the Hon’ble High court that an assessee can purchase an asset or part thereof in the name of his wife but he would not be entitled to the benefit of section 54B of the Act. While holding so, the Hon’ble High Court has followed its earlier decision in case of Jai Narayan (supra). 24. In case of Kamal Kant Kamboj (supra), the issue for consideration before the Hon’ble Punjab & Haryana High Court was whether the Tribunal was correct in law in holding that for claiming exemption under section 54B, the investment in new land cannot be made in the name of wife of the assessee. The Hon’ble High Court held that the matter stand concluded against the assessee by its earlier decision in case of Jai Narayan’s case and in view of the binding precedents in case of Jai Narayan and Dinesh Verma cases, the Hon’ble High court held that it is unable to subscribe to the view taken by the Hon’ble Delhi High Court in Kamal Wahal case. 19 25. I have also gone through the decisions of the Coordinate Benches relied upon by the ld AR but find that the same doesn’t act as a binding precedent as the decisions of the Hon’ble Punjab & Haryana High Court were apparently not brought to the notice of the Coordinate Benches and were accordingly not taken into consideration while arriving at the findings in the respective cases. 26. It is therefore seen that a consistent view has been taken by the Hon’ble Punjab & Haryana High Court in the matter and the ld. AR failed to draw my attention towards any other subsequent decision rendered by the Hon’ble Punjab & Haryana High Court in favour of the assessee on this issue. It is a settled position that once the jurisdictional High Court decides a particular issue in a particular manner, that manner has to be mandatorily followed by all the authorities acting under it so long as it holds the field and is not reversed by the Hon’ble Supreme Court. In that view of the matter, I am bound to follow the consistent view taken by the Hon’ble jurisdictional High Court in series of decisions as discussed above. I, therefore, hold that the authorities below were justified in making the assessee not eligible to exemption u/s 54B of the Act where the investment is made in the name of the grandson of the assessee.” 18. In light of the aforesaid discussions, there is no estoppel under law to acquire agriculture land in the name of wife of the assessee for stated social and economic reasons, however, the assessee cannot claim any deduction under section 54B as so held by the Hon’ble High Court. In view of the same, the AO is directed to allow the claim of deduction u/s 54B as far as the agriculture land which has been purchased in the name of the assessee for a consideration of Rs 1,12,82,000/- and as far as the agriculture land purchased in the name of the wife of the assessee for a consideration of Rs 36,70,000/- is concerned, the assessee shall not be eligible for claim of deduction under section 54B of the Act. In the result, ground no. 4 of the assessee’s appeal is partly allowed. 19. In Ground no. 1, the assessee has challenged the order of the ld CIT(A) in confirming the action of AO in reopening of assessment u/s 147 and in Ground no. 5, the assessee has challenged the order of the ld CIT(A) in not allowing deduction u/s 54F of Rs. 35,00,000/- claimed by assessee, however, no arguments were advanced during the course of hearing, hence the same are dismissed. The ground nos. 2, 6, 7 & 8 are general in nature which doesn’t require any separate adjudication. 20 20. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open Court on 03/12/2024. Sd/- Sd/- परेश म. जोशी िवŢम िसंह यादव (PARESH M. JOSHI) ( VIKRAM SINGH YADAV) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟/ ACCOUNTANT MEMBER AG आदेश कᳱ ᮧितिलिप अᮕेिषत/ Copy of the order forwarded to : 1. अपीलाथᱮ/ The Appellant 2. ᮧ᭜यथᱮ/ The Respondent 3. आयकर आयुᲦ/ CIT 4. िवभागीय ᮧितिनिध, आयकर अपीलीय आिधकरण, च᭛डीगढ़/ DR, ITAT, CHANDIGARH 5. गाडᭅ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar "