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TMI Blog2016 (7) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... 54B of the Income Tax Act on account of agriculture land purchased by assessee in the name of his wife Smt. Manjit Kaur. 4. Briefly the facts of the case are that assessee alongwith Shri Sanjay Kumar had sold land measuring 24 kanals in village Ratoli, Yamuna Nagar for ₹ 72,00,000/- on 09.10.2006 to M/s Zion Promoters and Developers Pvt. Ltd. Faridabad. Since the land was within 8 km of the municipal limit and capital gain on such sale was taxable, therefore, Assessing Officer initiated the re- assessment proceedings. The assessee has half share in the property therefore, capital gain arise on transfer of the capital asset. The assessee did not declare any capital gain in the return of income. The assessee submitted before Assessing Officer that he had invested sale proceeds in purchase of new agricultural land at Manja Shahkampur, Jagadhri and assessee had got land in the joint name of his wife. The Assessing Officer found that the aforesaid agriculture land situated at Manja Shahkampur, Jagadhri was purchased by Smt. Manjit Kaur wife of the assessee for ₹ 35,51,000/- on 15.05.2007 and not in the joint name with her husband. The Assessing Officer, therefore, was of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing an individual or his parent, or a Hindu undivided family] for agricultural purposes [(hereinafter referred to as the original asset)], and the assessee has, within a period of two years after that date, purchased any other land for being used for agricultural purposes, then, instead of the capital gain being charged to income tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,-- (i) if the amount of the capital gain is greater than the cost of the land so purchased (hereinafter referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be nil; or (ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expression purchased any other land for being used for agricultural purposes , which necessarily means that the new asset which is purchased has to be in the name of the assessee himself for seeking exemption under s. 54B. The purchase of agricultural land by the assessee in his son or grandson's name, therefore, cannot be held to be entitled to exemption under s. 54B.--CIT vs. V, Nataraian (2006) 203 CTR (Mad) 37: (2007) 287ITR 271 (Mad) dissented from... 6(ii) Hon'ble Punjab Haryana High Court in recent decision in the case of CIT V Dinesh Verma 60 Taxman.com 461 vide judgement dated 06.07.2015 considered identical issues and also considered the question No. 7 as follows : 7. Whether the respondent-assessee was entitled to the benefit under Section 54-B of the Income Tax Act, 1961 in respect of the property purchased from the sale proceeds in the name of his wife? 7. The findings of Hon'ble Punjab Haryana High Court in paras 16 to 20 read as under : Re: Questions No. 4 and 7. the additional question raised by our order dated 02.03.2015. 16. Question No.4 must be answered in favour of the appellant. As we mentioned earlier, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A reading of section 54B of the Act nowhere suggests that the Legislature intended to advance the benefit of the said section to an assessee who purchased the agricultural land even in the name of a third person. Wherever the Legislature intended it to be so, it had specifically provided under the provision. The term assessee is qualified by the expression purchased any other land for being used for agricultural purposes , which necessarily means that the new asset which is purchased has to be in the name of the assessee himself for seeking exemption under section 54B of the Act. The purchase of agricultural land by the assessee in his son or grandson's name, therefore, cannot be held entitled to exemption under section 54B of the Act. 11. We may make a brief reference to the decision relied upon by counsel for the assessee. Learned counsel mainly relied upon the decision in V. Natarajan [2006] 287 ITR271 (Mad), with reference to section 54 of the Act. 12. The Madras High Court in V. Natarajan's case [20061 287 ITR 271 was dealing with a case relating to section 54 of the act wherein the assessee who after selling his residential house had purchased another ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in the case of CIT V Kamal Wahal 351 ITR 4 in which it was held as under : For the purposes of claiming deduction u/s 54F, the new residential house need not be purchased by the assessee in his own name nor is it necessary that it should be purchased exclusively in his name. A purposive construction is to be preferred as against a literal construction. 10. This judgement cannot be given precedence against the judgement of jurisdictional High Court referred to above. The ld. counsel for the assessee also relied upon order of ITAT Chandigarh Bench in the case of Bant Singh Vs ITO 52 Taxman.com 364 in which son of the assessee was joint owner of the land which was sold and purchased by the assessee because of the old age. The Tribunal relied upon decision in the case of Gurnam Singh (supra) therefore, these decisions could not be given preference against judgements of the High Court. In the case of CIT V Kamal Wahal (supra), Hon'ble Delhi High Court relied upon decision in the case of CIT Vs Ravinder Kumar Arora 342 ITR 38, therefore, ld. CIT(Appeals) was justified in observing that in the case of Ravinder Kumar Arora, the Tribunal allowed the deduction under section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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