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TMI Blog2014 (1) TMI 1271X X X X Extracts X X X X X X X X Extracts X X X X ..... t be extended to mean the major married daughters – Decided against Assessee. - ITA No.253/VIZ/2012 - - - Dated:- 22-7-2013 - D Manmohan And B R Baskaran, JJ. For the Appellant : Shri C Subrahmaynam, CA For the Respondent : Shri K V N Charya, CIT-DR ORDER:- PER : B R Baskaran The appeal of the assessee is directed against the order dated 30-03-2012 passed by Ld CIT(A), Vijayawada and it relates to the assessment year 2008-09. 2. The solitary issue urged in this appeal is whether the Ld CIT(A) is justified in holding that the assessee is not entitled to claim deduction u/s 54B and 54F of the Act in respect of investments made in the name of her daughters. 3. The facts relating to the issue are set out in brief. During the year under consideration, the assessee sold 2 acres and 50 cents of wet agricultural land located at Peda Pulipaka village for a consideration of Rs.1,41,12,000/-. There is no dispute that the capital gain arising on sale of the above said agricultural land is assessable to income tax. Thereafter the assessee purchased following two properties in the name of her daughters. (a) A wet agricultural land having an extent of 3 Acres and 94 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and her daughters do not convey any title to the assessee. In this regard, the Ld CIT(A) placed reliance on the decision of Hon ble Supreme Court in the case of Suraj Lamp Industries Pvt. Ltd Vs. State of Haryana Another in SLP (c) No.13917 of 2009 and he has extracted the following observations made by the Hon ble Apex Court in the above said case. 16 We therefore reiterate that immovable property can be legally and lawfully transferred / conveyed only by a registered deed of conveyance. Transactions of the nature of GPA Sales or SA/GAP/Will Transfers do not convey title and do not amount to transfer, nor can they be recognized or valid mode of transfer of immovable property. The courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title nor create any interest in an immovable property. Before Ld CIT(A), the assessee placed reliance on the following case law to support her claim for deduction u/s 54B and 54F in respect of properties purchased in the name of her daughters. (a) CIT Vs. Gurnam Singh (327 ITR 278)(2010)(P H) (b) CIT Vs. Natarajan (287 ITR 271)(Mad) (c) Deputy Director of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g as the sale of 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. 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 what is more, in the instant case, the very same assessee immediately after the sale of the house, entered into an agreement for purchasing another house and paid a sum of Rs.1,000 as earnest money and subsequently the legal representative completed the transaction within the period of one year from the date of the death of the deceased. The sale and purchase are two links in the same chain. We are fortified in this view by a decision of the Madras High Court in C.V.Ramanathan Vs. CIT (1980) 17 CTR (mad) 322 : (1980) 125 ITR 191 (Mad) : TC22R.230. The Ld Counsel further submitted that the decision of the jurisdictional High Court is binding on the Tribunal and in this regard, he invited our attention to another decision rendered by the jurisdictional High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase. He submitted that the assessee therein had sold a house property and he himself entered into an agreement to purchase another residential house. He also paid earnest money. However, before completion of the purchase transaction, he expired and hence his legal representative completed the transaction of purchase. Hence the legal representative claimed deduction u/s 54 of the Act against the capital gain arising on the property sold by the late assessee. Since the transaction of purchase was initiated by the assessee himself and further since the legal representative of the assessee completed the very same transaction, the Hon ble Court has held that the legal representative was entitled to claim deduction u/s 54 of the Act. He submitted that it is the legal representative, who is assessable as representative of the deceased assessee. Accordingly he submitted that the assessee could not place reliance on the said decision. 9. The Ld D.R further submitted that the benefit of exemption u/s 54B and 54F could be given to an assessee only if the new property is purchased in his own name. In this regard, the Ld D.R placed reliance on the following case law. We are extracting the Hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) Darapaneni Chenna Krishnayya (HUF) Vs. CIT (2007)(291 ITR 98)(AP) - Capital gains Exemption under s. 54B Allowability to HUF Benefit under s. 54B is available only to an individual and not HUF CIT Vs. G.K. Devarajulu (1991) 92 CTR (Mad) 184 : (1991) 191 ITR 211 (Mad) concurred with. (b) Vipin Malik (HUF) Vs. CIT (2011)( 330 ITR 309)(Del) Capital gains Exemption under s. 54F Purchase/Construction of new house Assessee had paid most of the amount to the co-operative society for the purchase of flat more than one year before the sale of agricultural land in September, 1995 Allotment letter or the draw of lots took place only in September/October, 1998 i.e., after two years of the sale of agricultural land Therefore, assessee cannot be said to have purchased a residential house within the meaning of s. 54F either within one year before the sale of agricultural land or within two years after the sale That apart, agricultural land that was sold belonged to assessee HUF whereas the flat was purchased in the individual name of the Kartha along with his mother Thus, the new house was not purchased by the same assessee who sold the agricultural land Hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that case. The vital point, in our view, is that the assessee (in the case of Late Mir Gulam Ali Khan (supra)) had entered into an agreement for purchasing a residential house and also paid earnest money in furtherance of the same. Unfortunately he passed away before completion of the purchase transaction. Hence, the legal representative of that assessee completed the process of purchase of property. Thus, in effect, the new house property was not purchased in the name of the assessee, who sold the old property. Since the said legal representative of the assessee is liable to be assessed in respect of the capital gain on the property sold by his father, he claimed the cost of new property as deduction u/s 54 of the Act. Thus, the facts prevailing in Late Mir Gulam Ali Khan (supra) case is peculiar and further, under section 159 of the Act, the legal representative is treated as assessee in respect of liability of the deceased person. Hence, under peculiar facts of the case, the Hon ble jurisdictional High Court held that the term assessee shall include legal representative also. In our view, the liberal view taken by the High Court cannot be stretched in each and every case, whe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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