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TMI Blog2022 (10) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... eased assessee himself during his life time and on account of death of the assessee, the legal heir was brought on record and proceedings were subsequently initiated in the hands of the legal heir, the grandson of the assessee. Therefore, we find that unlike the aforesaid two cases, as far as satisfaction of the conditions stipulated in section 54B are concerned, there is no question of any impossibility of performance by the assessee in the present case as he himself has purchased another agriculture land and paid the consideration during his lifetime and there was nothing left to be done and which has actually been done by the grandson after the expiry of the assessee. We therefore find that these two cases are distinguishable on facts and doesn t support the case of the assessee even though the assessment is made in the hands of the grandson as legal heir on behalf of the assessee. Now, coming back to the undisputed fact that where the fresh investment in purchase of another agriculture land, out of sale proceeds of the original agriculture land, was made by the late assessee during his lifetime, in individual name of his grandson, all we have to consider is whether the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Singh had sold certain agricultural land to M/s Bajwa Developers for a consideration of Rs. 11,62,500/- on which capital gain has been worked out at Rs. 10,04,500/-. Late Shri Ajmer Singh thereafter purchased another agricultural land in the name of his grandson Shri Daljit Singh and in the return of income so filed, deduction under section 54B of the Act was claimed. As per the Assessing officer, for claiming the benefit of deduction under Section 54B of the Act, the agricultural land was required to be purchased by the assessee in his own name and not in the name of his grandson. Accordingly, the deduction so claimed under section 54B was not allowed and capital gain worked out at Rs. 10,04,500/- was brought to tax. 4. Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A) and the submission made before the AO were reiterated. It was submitted before the ld CIT(A) that the Late Shri Ajmer Singh was suffering from prolonged illness and died on 17/06/2010 and during his life time, he had executed a will in favour of his grandson on 10/04/2007 stating that after his death, the property owned by him will go in the hands of his grandson. It was submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the name of grandson in whose name the deceased assessee had executed a will on 10/04/2007 whereby all his properties will eventually devolve on his grandson, the Ld. CIT(A) dismissed the same holding that it is a settled position of law that the new asset has to be purchased by the assessee and no one else. It was held by the Ld. CIT(A) that the purchase of the asset in the name of any other person including the grandson of the assessee will not qualify for the deduction. It was held by the Ld. CIT(A) that the existence of a will in the name of grandson in whose name the property was purchased will not alter this situation in any manner as there is no ambiguity in law and for being eligible for the deduction, the property has to be purchased in the name of the assessee and no one else. He accordingly confirmed the findings of the AO and the order of the AO was sustained. Against the said findings and order of the ld CIT(A), the present appeal has been preferred before us. 8. During the course of hearing, the Ld. AR reiterated the submissions made before the lower authorities and submitted that the assessee Late Shri Ajmer Singh sold his agricultural land during the year und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the assessee and no document has been provided to show that the consideration for the said purchase was paid by the assessee. Regarding the decision of the Hon ble Andhra Pradesh High Court in case of Late Gulam Ali Khan Vs. CIT 165 ITR 228, it was submitted that in the said case, the assessee had died and the transaction of purchase of the asset was subsequently completed by the legal representative and in that factual background, the Hon ble High Court held that the word assessee must be given a wide and liberal interpretation as to include his legal heirs also. It was submitted that in the instant case, the property was purchased in the name of the grandson of the assessee by the assessee during his lifetime and hence, this decision doesn t support the case of the assessee. 12. Further, the ld Senior DR placed reliance on the decisions of Hon ble Punjab Haryana High Court in case of CIT Vs. Dinesh Verma [2015] 60 taxmann.com 461, Kamal Kant Kamboj Vs. ITO, Ward-3 [2017] 88 taxmann.com 541 and Jai Narayan Vs. ITO reported in 306 ITR 335 and submitted that the matter is squarely covered by the decisions of the Hon ble jurisdictional High Court. 13. In her rejoinder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 020 and it is clear that the consideration for purchase of the agriculture land was paid by the assessee out of sale proceeds of the original agriculture land. The assessee thereafter expired on 17/06/2010. The notice u/s 148 was issued by the AO in name of legal heir, the grandson of the assessee on 24/03/2017, thereafter the return in response to the said notice was filed by the legal heir, the grandson of the assessee on 22/06/2017. In the return so filed by the legal heir, the grandson of the assessee, capital gains on sale of agriculture land by the late assessee has been offered to tax at Rs 11,62,500/- and thereafter, the deduction u/s 54B has been claimed towards purchase of another agriculture land by the late assessee (though in name of the legal heir) resulting in nil taxability on the said transaction. The assessment thereafter u/s 143(3) r/w 147 was completed by the AO on 06/11/2017 in name of the legal heir, the grandson of the assessee wherein the deduction so claimed under section 54B was not allowed and capital gains on sale of agriculture land were brought to tax in the hands of the legal heir. 15. In case of Late Gulam Ali Khan Vs. CIT (supra), the issue for c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. In case of C.V. Ramanathan Vs. CIT (supra), the question for consideration before the Hon ble Madras High Court was whether the Tribunal was right in holding that the provision of Section 54 of the Act are not applicable to the assessment made on the legal heirs of the deceased assessee. In that case, late Shri C.V. Venkateswaran executed a will in July 1966 wherein he appointed his son, Shri C.V. Ramanathan as the executor and certain bequests were made in the name of his wife and married daughters and the remainder was given to his son absolutely. In September 1969, he sold a residential house, thereafter in November 1969, he purchased a vacant site for which he paid certain advance of Rs 3000/- and a draft sale deed was also got prepared, but before this sale could be executed, he died in December 1969 and the sale deed was thereafter executed in favour of his son in June 1970. A building was put up and construction was completed in September 1971 and the son and his family resided therein. Subsequently, the assessment proceedings were commenced in the hands of his son, being the legal heir of the deceased assessee and claim was made under section 54 of the Act which was rej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y completed by and in the name of the legal representative. In that factual background, it was held that the word assessee must be given a wide and liberal interpretation so as to include his legal heirs and the legal heirs cannot be differentiated from the assessee and where he was liable to pay the tax, he cannot be denied the benefit of section 54 of the Act. In the instant case, we find that both the transaction of sale of agriculture land and subsequent transaction of purchase of another piece of agriculture land were undertaken by the deceased assessee himself during his life time and on account of death of the assessee, the legal heir was brought on record and proceedings were subsequently initiated in the hands of the legal heir, the grandson of the assessee. Therefore, we find that unlike the aforesaid two cases, as far as satisfaction of the conditions stipulated in section 54B are concerned, there is no question of any impossibility of performance by the assessee in the present case as he himself has purchased another agriculture land and paid the consideration during his lifetime and there was nothing left to be done and which has actually been done by the grandson aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceeds of the original property and the new house was purchased in name of wife of the assessee, applying the rule of purposive construction and the object which the section seeks to achieve, the Hon ble Delhi High Court held that for 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 name. This decision we find is pari-materia with the facts in the instant case and supports the case of the assessee where the entire investment in purchase of agriculture land has been made out of sale proceeds of the original agriculture land and the agriculture land so purchased is in name of the grandson of the assessee. At the same time, before applying the ratio laid down therein in the instant case, it is essential to refer to the decisions of the Hon ble Jurisdictional Punjab Haryana High Court as well. 22. In case of Jai Narayan (supra), the issue for consideration before the Hon ble Punjab Haryana High Court was whether the assessee who had purchased the land in his son and grandson s name after the sale of the agriculture land would be entitled to the benefit of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in case of Jai Narayan and Dinesh Verma cases, the Hon ble High court held that it is unable to subscribe to the view taken by the Hon ble Delhi High Court in Kamal Wahal case. 25. I have also gone through the decisions of the Coordinate Benches relied upon by the ld AR but find that the same doesn t act as a binding precedent as the decisions of the Hon ble Punjab Haryana High Court were apparently not brought to the notice of the Coordinate Benches and were accordingly not taken into consideration while arriving at the findings in the respective cases. 26. It is therefore seen that a consistent view has been taken by the Hon ble Punjab Haryana High Court in the matter and the ld. AR failed to draw my attention towards any other subsequent decision rendered by the Hon ble Punjab Haryana High Court in favour of the assessee on this issue. It is a settled position that once the jurisdictional High Court decides a particular issue in a particular manner, that manner has to be mandatorily followed by all the authorities acting under it so long as it holds the field and is not reversed by the Hon ble Supreme Court. In that view of the matter, I am bound to follow the consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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