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2019 (2) TMI 2052 - AT - Income TaxDeduction u/s 54B - Denial of deduction as purchase of agricultural land in the name of assessee s son - agricultural land sold by the assessee was a property of HUF and the agricultural land was also purchased for the HUF in the name of son of the assessee who were the coparceners of the HUF - HELD THAT - In the present case, it is noticed that a similar issue has been already decided by ITAT Chandigarh Bench in case of Dalbir Singh 2018 (9) TMI 2096 - ITAT CHANDIGARH assessee is an illiterate and old retired person, the sale proceeds from the agricultural land belonging to the family, were invested in purchase of the agricultural land in the name of the sons who were co-parceners in the HUF of the assessee. So the impugned order is set aside and the AO is directed to allow the claim of the assessee for deduction under section 54B. - Decided in favour of assessee.
Issues Involved:
1. Condonation of delay in filing the appeal. 2. Addition of Rs. 25,51,176/- under Section 143(3)/147 of the Income Tax Act, 1961. 3. Denial of exemption under Section 54B of the Income Tax Act, 1961. 4. Fair Market Value (FMV) of the land as on 01/04/1981. 5. Exemption under Section 54F for the construction of a house. Detailed Analysis: 1. Condonation of Delay in Filing the Appeal: The appeal was delayed by 68 days. The assessee attributed the delay to the rush of work due to filing returns and demonetization. The assessee submitted an affidavit and an affidavit from the Chartered Accountant (CA) explaining the reasons for the delay. The CA mentioned that the order was misplaced in his office due to the rush caused by demonetization and was found only in the second week of March 2017. The Tribunal, considering the reasonable cause for the delay, condoned the delay and admitted the appeal. 2. Addition of Rs. 25,51,176/- under Section 143(3)/147 of the Income Tax Act, 1961: The Assessing Officer (AO) observed that the assessee, along with others, sold land for Rs. 1,18,75,763/-. The AO calculated the capital gain and attributed 1/3rd share to the assessee, reopening the case under Section 147. The AO made an addition of Rs. 29,77,043/- after considering the indexed cost and exemptions claimed by the assessee. The AO disallowed the exemption under Section 54B for the land purchased in the name of the assessee's sons, citing the case of Jai Narayan Vs. ITO. 3. Denial of Exemption under Section 54B of the Income Tax Act, 1961: The assessee claimed exemption under Section 54B for the purchase of agricultural land in the name of his sons. The AO disallowed this exemption, which was upheld by the CIT(A), stating that the purchase deed did not reflect the name of the assessee. The Tribunal, however, referred to a similar case (Dalbir Singh Vs. ITO) where the exemption was allowed for land purchased in the name of the assessee's sons due to the assessee's old age and health issues. Following this precedent, the Tribunal directed the AO to allow the exemption under Section 54B. 4. Fair Market Value (FMV) of the Land as on 01/04/1981: The assessee's FMV was based on a report by an independent valuer, while the AO used the registered value of land from a nearby village. The CIT(A) observed that the AO's basis for FMV was unjustified as it was from a farther village. The Tribunal agreed with the CIT(A) that the FMV adopted by the registered valuer should be considered. 5. Exemption under Section 54F for the Construction of a House: The assessee claimed exemption for the construction of a house but failed to provide documentary evidence. The AO referred the valuation to the Departmental Valuation Officer, who valued the cost of construction at Rs. 11,41,404/-. The CIT(A) upheld this valuation. The Tribunal did not find any justification to alter this finding and upheld the exemption as assessed by the AO and CIT(A). Conclusion: The Tribunal allowed the appeal of the assessee, condoning the delay and directing the AO to allow the exemption under Section 54B for the purchase of agricultural land in the name of the assessee's sons. The FMV adopted by the registered valuer was accepted, and the exemption under Section 54F was upheld as per the Departmental Valuation Officer's report. The addition of Rs. 25,51,176/- was addressed, and the appeal was allowed in favor of the assessee.
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