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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 ..... Shri Daljit Singh in the capacity of the Legal Heir of Late Shri Ajmer Singh, a return of income was filed by Shri Daljit Singh on 22/06/2017 declaring total income of Rs. 1,54,376/-. The assessment in this case was thereafter completed under section 147 r.w.s 143(3) of the Act, in the name of Shri Daljit Singh in the capacity of Legal Heir of the assessee, Late Shri Ajmer Singh at an assessed income of Rs 11,58,870/- taking into consideration the returned income of Rs 1,54,376/- and making an addition of Rs 10,04,500 which is subject matter of dispute before us. 3. During the year under consideration, Late Shri Ajmer 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT(A) relied on the decision of Hon'ble Punjab & Haryana High Court in case of Jai Narayan Vs. ITO reported in 306 ITR 335 wherein it was held 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. It was further stated by the ld CIT(A) that similar view has been taken by the Hon'ble Punjab & Haryana High Court in subsequent decision in the case of CIT Vs. Dinesh Verma reported in 233 Taxmann 409 (P&H). 7. Regarding contention of the assessee that the exemption under section 54B should be allowed as the property was purchased 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ward-3 (ITA No. 512/Chd/2017 dt. 25/02/2019) and Dy. CIT, CC-1 Vs. Shri Jit Singh S/o Shri Dhanna Singh (ITA No. 21(Asr)/2015 dt. 09/03/2016). 11. Per contra, the Ld. Senior DR supported the order and the findings of the Ld. CIT(A). It was submitted that the ld CIT(A) has rightly distinguished the decision of the Hon'ble Delhi High Court in case of CIT Vs. Kamal Wahal (supra), Hon'ble Punjab & Haryana High Court in case of CIT Vs. Gurnam Singh (supra) and Hon'ble Karnataka High Court in case of DIT vs Mrs Jennifer Bhide (supra) relied upon by the assessee as the land was purchased in name of the grandson 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 sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore essential to set out the facts of the present case as emerging from the records before I examine the applicability of these authorities in the context of the said facts. 14. In the present case, the sequence of events and relevant dates are as follows. The assessee executed a will on 10/04/2007 where on his death, it has been stated that all his properties will devolve on his grandson. The sale deed for transfer of original agriculture land was executed by the assessee on 11/11/2009. The fresh purchase of another agriculture land was done through agreement to sell by the assessee on 10/01/2020 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 ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of another house and paid a sum of Rs. 1,000/- as earnest money and subsequently the legal representative completed the transaction within a period of one year from the date of the death of the deceased, it was held that the sale and purchase are two links in the same chain and accordingly matter was decided in favour of the assessee and while deciding so, the Hon'ble High Court relied on the earlier decision of Hon'ble Madras High Court in the case of C.V. Ramanathan Vs. CIT [1980] 125 ITR 191 and it would be equally relevant to refer to the said decision of the Hon'ble Madras High Court. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... haser must be same. The benefit of section 54 was accordingly granted to the legal heir in whose hands the assessment was framed by the AO. 17. In the aforesaid two cases, we find that the issue for consideration before the Hon'ble High Courts was claim of deduction under section 54 in the hands of the legal representative on behalf of the deceased assessee where the subsequent transaction of purchase of new property was initiated by the late assessee during his life time for the purposes of his own residence however on account of death of the assessee, the said transaction was subsequently 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se in the sale deed, assessee's husband name is also mentioned, the same would not disentitle the assessee and the assessee would continue to be entitled for the benefit of section 54 of the Act for the entire investment made by her. It is again a case of joint investment in name of the assessee and her husband and while holding so, the Hon'ble Karntaka High Court has followed the decision of the Hon'ble Punjab & Haryana High Court in case of Gurnam Singh (supra). 21. In case of Kamal Wahal (supra), where the entire investment in purchase of the new house had come out of the sale proceeds 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. While holding so, the Hon'ble High Court has followed its earlier decision in case of Jai Narayan (supra). 24. In case of Kamal Kant Kamboj (supra), the issue for consideration before the Hon'ble Punjab & Haryana High Court was whether the Tribunal was correct in law in holding that for claiming exemption under section 54B, the investment in new land cannot be made in the name of wife of the assessee. The Hon'ble High Court held that the matter stand concluded against the assessee by its earlier decision in case of Jai Narayan's case and in view of the binding precedents 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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