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2014 (5) TMI 1032 - AT - Income TaxDeduction u/s 54B - new land purchased by the assessee was in the name of Nirmal Singh that is the son of the assessee - Held that - assessee is basically an agriculturalist and is aged about 75 years. Further the land which was sold by the assessee was in the joint name of the assessee along with his son which means the son was also part owner of the land - Even if we consider the decision of Jai Narayan v. ITO 2007 (8) TMI 295 - PUNJAB AND HARYANA HIGH COURT the court has simply stated that the word assessee occurred in section 54B must be interpreted in same manner as occurring with the context and subject of its usage. Even from that angle since the son of the assessee was also joint owner of the land which was sold (because name of the son was there in the land which the assessee was holding though beneficial owner is only the assessee). Therefore in our opinion if the land was purchased in the name of the son of the assessee because of old age and other technical reasons the assessee would still be entitled to deduction under section 54B of the Act. Accordingly we set aside the order of the learned Commissioner of Income-tax (Appeals) and direct the Assessing Officer to allow deduction under section 54B of the Act. - Decided in favour of assessee.
Issues:
- Assessment of long-term capital gain - Eligibility for exemption under section 54B - Compliance with provisions of section 54B - Applicability of different High Court judgments - Proper consideration of submissions during hearing Assessment of long-term capital gain: The appeals were filed against the order of the Commissioner of Income-tax (Appeals) upholding the assessment of long-term capital gain at a specific amount. The Assessing Officer initiated proceedings under section 153C due to documents found during a search on property dealers' premises. The deduction under section 54B was denied as the new land purchased was in the name of the assessee's son. The authorized representative cited a High Court decision, but the Assessing Officer disagreed, leading to the computation of capital gain without allowing the deduction. Eligibility for exemption under section 54B: The main contention was that the assessee, aged 75 years, sold land jointly owned with his son and purchased new land in his son's name due to old age and the son being the only legal heir. The Commissioner of Income-tax (Appeals) applied a different High Court decision, denying the deduction under section 54B. The argument was supported by the fact that the son was a joint owner of the sold land, making the assessee eligible for the deduction under section 54B. Compliance with provisions of section 54B: The assessee's age, joint ownership of the sold land with the son, and the son's status as the sole legal heir were emphasized to support the purchase of new land in the son's name. The argument relied on the High Court's decision, stating that joint ownership sufficed for the deduction under section 54B. The affidavit submitted reinforced the assessee's agricultural background and age, further supporting the claim for deduction under section 54B. Applicability of different High Court judgments: The disagreement arose from the applicability of different High Court judgments, specifically between Jai Narayan v. ITO [2008] 306 ITR 335 (P&H) and CIT v. Gurnam Singh [2010] 327 ITR 278 (P&H). The Tribunal found that even under the interpretation of the former judgment, the joint ownership of the sold land by the son supported the assessee's entitlement to the deduction under section 54B. The Tribunal set aside the Commissioner's order and directed the Assessing Officer to allow the deduction under section 54B. Proper consideration of submissions during hearing: The Tribunal carefully reviewed the submissions, including the affidavit highlighting the assessee's age, sole legal heir, and agricultural income status. By analyzing the ownership structure of the sold land and the reasons for purchasing new land in the son's name, the Tribunal concluded that the assessee met the requirements for the deduction under section 54B. The appeals were allowed, overturning the Commissioner's decision. This detailed analysis highlights the key issues, arguments, legal interpretations, and the final decision of the Appellate Tribunal ITAT CHANDIGARH in the cited judgment.
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