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TMI Blog2022 (12) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(14) and section 2(47) of the Act in the context of a claim of acquisition of rights of property and interest in a capital asset for the purpose of Income tax. The principles of this decision of the Delhi High Court in the case of CIT Vs. Ram Gopal [ 2015 (2) TMI 500 - DELHI HIGH COURT] applying to the facts of the present case, we hold that there is no infirmity in the order passed by the Ld.CIT(Appeals) in allowing the exemption claimed u/s 54B of the Act as claimed by the assessee. Thus, we sustain the order of the Ld.CIT(A) and reject the grounds of Revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... Kali Ram Gupta on 07.11.2013. The assessee submitted that since she had purchased the new agricultural land from Smt. Sumitra Devi Gupta vide agreement to sell dated 15.11.2013 and executed General Power of Attorney by the assessee in the name of Smt. Sumitra Devi Gupta and possession was also transferred through possession letter on the same day by investing whole of sale consideration in respect of old agricultural land which was sold by her the assessee claimed exemption u/s 54B of the Act for the AY 2014-15. The assessee furnished copy of agreement to sell, copy of General Power of Attorney, copy of possession letter, affidavit of Shri Kali Ram Ganga Bishan (HUF) in proof of purchase of land by the assessee from Shri Kali Ram Ganga Bishan (HUF) in the year 2000 and copy of sale deed dated 07.11.2013 executed in the name of Pearls Life Style Developers (P) Ltd. Similarly, the assessee also furnished agreement to sell, possession letter, General Power of Attorney (GPA), Deed of Will, Affidavit executed by the assessee in favour of Smt. Sumitra Devi Gupta in proof of sale of property by the assessee during the previous year 2013-14 relevant to the AY 2014-15. 3. The Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n claimed by the assessee u/s 54B of the Act. Ld. DR strongly placed reliance on the order of the AO. 6. On the other hand, the Ld. Counsel for the assessee strongly placed reliance on the orders of the Ld.CIT(Appeals). The Ld. Counsel for the assessee further submits that the Hon'ble Delhi High Court in the case of CIT Vs. Ram Gopal (supra) while deciding as to whether the amount spent towards the cost of acquisition in the absence of an agreement to sell, the rights acquired by the assessee through provisional booking of the property by way of letter did not meet the requirements spelt out u/s 54 of the Act i.e., the acquisition of new capital asset, considered the judgment of the Hon'ble Supreme Court in the case of Suraj Lamp & Industries Pvt. Ltd. Vs. State of Haryana (340 ITR 1) and held that the assessee is entitled deduction u/s 54 of the Act. Ld. Counsel further submits that the Hon'ble Delhi High Court distinguished the decision of Hon'ble Supreme Court observing that the Hon'ble Supreme Court did not had an occasion to deal with the provisions of Section 2(14) and 2(47) in the context of a claim of acquisition of rights of property and interest in capital asset for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, Will Affidavit - all dated 15.11.2013) which were executed in her favour by Smt. Sumitra Devi Gupta on 15.11.2013, after receiving the entire consideration from the assessee (through banking channel, from time to time). The assessee had kept on making payments (through banking channel) towards purchase of new agricultural land, to the said Smt. Sumitra Devi Gupta. Immediately upon receiving the payments (through banking channel) on account of sale consideration in respect of old agricultural land the assessee had invested whole of the sale consideration received in respect of her old agricultural land, towards purchase of new agricultural land. Since the assessee had purchased the new agricultural land by investing whole of the sale consideration in respect of old agricultural land within next few days, she had become eligible and entitled to claim the deduction/exemption u/s 54B of the Act and accordingly, the assessee had claimed the deduction/exemption u/s 54B in her ITR filed for AY 2014-15 which was denied by the Assessing Officer. 10. We observe that the Assessing Officer though accepted the transaction of sale of property by the assessee to Pearls Life Style Developers ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her recorded that the second transaction i.e. claim of purchase of land by the appellant has been undertaken merely to claim deduction u/s 54B. The AO has drawn strength from the judgment of Hon'ble Supreme Court in the case of Suraj Lamps & Industries Pvt. Ltd. Vs. State of Haryana & Anr. The AO further recorded that he had issued notice u/s 133(6) to Smt. Sumitra Devi Gupta (from whom the appellant had purchased agricultural land) to furnish complete set of ITR for AY 2014-15, but she had not furnished the same. Due to non compliance by Smt. Sumitra Devi Gupta, the AO inferred that Smt. Sumitra Devi Gupta (from whom the appellant had claimed to had purchased agricultural land) had not disclosed the sale consideration in her ITR for capital gain purposes. 5.2.6 Before me, the Ld. AR of the appellant argued that the mode of purchase of new agricultural land, was not in anyway different from the mode (unregistered SPA & GPA etc.) of purchase of old agricultural land (which was sold by the appellant in this year). The appellant had purchased the new agricultural land in the same manner. 5.2.7 The Ld. AR of the appellant has vehemently argued that the case of the appellant is full ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our of the appellant in the Revenue Records cannot be a deterrent for allowing deduction u/s 54B of the Act. 5.2.9 Regarding the AO comment relating to non compliance of his notice u/s 133(6) by Smt. Sumitra Devi Gupta, the Ld. AR of the appellant furnished copy of the letter of Smt. Sumitra Devi Gupta addressed to the AO through speed post which she confirmed making sale of agricultural land to Smt. Babita Gupta in FY 2013-14 and also confirmed receiving sale consideration from Smt. Babita Gupta through banking channel. I have perused the said letter and noticed that Smt. Sumitra Devi Gupta had confirmed having filed her ITR for AY 2014-15 and also that Smt. Sumitra Devi Gupta had filed copies of the documents executed by her in favour of Smt. Babita Gupta relating to sale of agricultural land. During the course of appellate proceedings, the AR was asked to furnish copy of the ITR Form with Computation of Income for AY 2014-15 of Smt. Sumitra Devi Gupta. In compliance thereof, the Ld. AR furnished copy of the ITR Form with Computation of Income for AY 2014-15 of Smt. Sumitra Devi Gupta. I find that as per the Computation of Income of Smt. Sumitra Devi Gupta for AY 2014-15, the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wance of deduction u/s 54B by the AO, is not sustainable. Therefore, the addition made is deleted and the Grounds of Appeal Nos. 2 to 5 of the appellant are allowed." 11. As could be seen from the above observations of the Ld.CIT(Appeals) the assessee furnished copy of return filed by Smt. Sumitra Devi Gupta from whom the land was purchased by assessee, wherein the capital gain was declared by Smt. Sumitra Devi Gupta in her return of income for the AY 2014-15. We also observe that the Ld.CIT(A) followed the decision of Delhi High Court in the case of CIT Vs. Ram Gopal (supra), wherein the judgment of the Apex Court in the case of Suraj Lamp & Industries (P) Ltd. was also considered by the Delhi High Court. The issue before the Hon'ble Delhi High Court was whether the assessee was entitled for deduction u/s 54 of the Act in respect of cost of acquisition and cost of improvement. The AO in this case rejected the assessee's claim and held that in the absence of agreement to sell the rights acquired by provisional booking of the property did not meet the requirements spelt out u/s 54 of the Act i.e. acquisition of new capital asset. However, the Hon'ble Delhi High Court allowed the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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