Exemption under section 54B allowed if agriculture land purchased in the name of son
Case Details: |
Jeetendra Patidar vs. Pr. CIT |
Appeal No.: |
ITA No. 486/Ind/2019 |
Order pronounced by: |
ITAT Indore |
Date of order: |
21-10-2020 |
Assessment Year: |
2015-16 |
In favour of: |
Assessee |
Brief Facts:
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Submission by assessee:
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Cases relied upon by assessee:
CIT vs. Kamal Wahal [Appeal No. ITA 4/2013] Delhi High CourtFor the 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 own name. The assessee has purchased it only in the name of his wife and not in name of stranger and there is also no dispute that the entire investment has come out of the sale proceeds of old residential house. |
Similar view was taken by Hon’ble Madras High Court in case of CIT vs. Natarajan 154 Taxmann 399 where the Hon’ble High Court allowed exemption u/s 54 on investment of sale proceeds of residential house in the name of wife. |
Hon’ble jurisdictional High Court in the case of Pr. CIT vs. Balmukund Meena [Appeal No. ITA 118/2016 dated 16-02-2017]:Undisputedly, the purchased land is being used by the assessee only for agricultural purpose and merely because in the sale deed his only son was also shown as co-owner, the ITAT has rightly come to conclusion that it does not make any difference because the purchased land is being used by the assessee for agricultural purposes. It is not the case of the revenue that the said land is being used exclusively by his son. |
CIT vs. Gurnam Singh (2010) 327 ITR 278/ [2008] 170 Taxman 160 Punjab and Haryana High Court:Same view was taken with reference to section 54F. |
Indore Bench of ITAT in case of Shri Raja Ram Patidar [Appeal No. ITA No. 371/Ind/2015]:The above provision contemplates that the benefit is available if an agricultural land is purchased out of the sale consideration of sale of agriculture land. In the instant appeal, the assessee applied the same to purchase another agriculture land in name of self and in name of wife and children. The revenue authorities and Ld. CIT(A) have already accepted the claim for purchase of agriculture land in the name of assessee as well as wife. We don’t find any reason that why the benefit should not be given for purchase of agriculture land in the name of his son and daughter who are not someone not connected or strangers to the assessee and as held by the Hon’ble High Court that the assessee includes his legal heirs also so as to give the vide and legal interpretation. We therefore are of the view that the Ld. CIT(A) erred in denying the exemption u/s 54B of the Act to assessee for purchase of agricultural land in the name of his son and daughter. |
Tribunal’s Ruling:
It is a well settled position of law that the provisions of section 263 of the Act can be invoked when twin conditions i.e. the assessment order is erroneous and prejudicial to the interest of the revenue are satisfied. In the present case, under the identical facts, the Hon’ble jurisdictional High Court has ruled in favour of the assessee regarding availability of deduction u/s 54B of the Act where the investment in new asset is made in the name of son of the assessee. The revenue has not brought to our notice any contrary judgement by the Hon’ble jurisdictional High Court or Hon’ble Supreme Court as a binding precedence. Therefore, under these facts, it cannot be construed that the order passed by the assessing officer is prejudicial to the interest of the revenue. As the assessment order is in accordance with the ratio laid down by the Hon’ble jurisdictional High Court, we are of the considered view that Ld. Pr. CIT was not justified in invoking the provision of section 263 of the Act. The impugned order is therefore, set aside.
Read Complete order: Jeetendra Patidar vs. Pr. CIT