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TMI Blog2024 (6) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... quired to be accepted with regard to Section 54B Accordingly when it is evident from the record that the entire investments has been made by the assessee from his own account and utilizing the sale consideration of the transfer of existing agricultural land then the benefit of the provisions of section 54B cannot be denied merely on the ground that some of the lands were purchased by the assessee in the name of wife, two minor daughters and one minor son. Assessee appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... t the land sold by the assessee belonged to the assesse family since year 1959. Though the land in question was sold by the assessee as it was transferred to the assessee from ancestral land however, as per the Muslim Personal Law (Shariat) the members of family like wife, daughter and son also have right/interest and title in such inherited agricultural land. He has further submitted that all the lands in the name of his wife two minor daughter and one minor son are purchased from the sale proceeds of the agricultural land sold by the assessee and therefore, the entire investment has been made by the assessee from the sale consideration of the existing agricultural land. Thus, Ld. AR has submitted that the assessee is entitled for deduction u/s 54B when the new agricultural lands were purchased by the assessee from the sale consideration of the existing agricultural land. He has pointed out that the CT(A) has relied upon the decision of Hon'ble Punjab & Haryana High Court in case of CIT vs. Dinesh Verma 60 taxmann.com 461 but the facts of the said case are distinguishable particularly the Hon'ble High Court has observed that the land purchased by the assessee in the said case in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minor son Mr. Faizan Khan. The AO has disallowed the claim of deduction u/s 54B to the extent of the new land purchased by the assessee in the name of family members and allowed the claim only to the extent of Rs. 69,55,000/- for which the assessee has purchased the land in his own name. Accordingly the AO has worked out long term capital gain of Rs. 2,03,51,964/-. The facts regarding the sale of agricultural land and purchase of new agricultural land by the assessee are not in dispute but the claim of the assessee was denied by the AO in respect of the agricultural land purchased by the assessee in the name of family members being wife, daughters and son. The CIT(A) has confirmed the action of the AO by following judgment of Hon'ble Punjab & Haryana High Court in case of CIT vs. Dinesh Verma (supra). It is pertinent to note that the Hon'ble High Court has observed in para 16 as under: "16. Question No.4 must be answered in favour of the appellant. As we mentioned earlier, the respondent sold his agricultural land for a sum of Rs. 60,00,000/-. Out of the sale proceeds he invested only a sum of Rs. 44,76,000/- towards the purchase of another agricultural plot. The balance consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no substantial question of law is arising in the present appeal by virtue of the judgment delivered by High Court of Punjab and Haryana, reported in 2008 [170] TAXMAN 160 (PUNJ. & HAR.). Paragraph Nos.3 and 4 of the aforesaid judgment read as under:- 3. Feeling aggrieved against the aforesaid order, the respondent filed an appeal before the CIT (Appeals), who vide his order dated 17-12-2002 allowed the same and set aside the action of the Assessing Officer in denying the deduction under section 54F of the act to the respondent. Against the said order, the revenue filed an appeal before the ITAT, who vide its order dated 24-4-2006 has dismissed the appeal, while observing as under:- "The issue before us revolves around allowability of deduction under sections 54B and 54F of the Act. The land in question was purchased by the assessee in the name of his son. The learned Assessing Officer disallowed the deduction on the ground that the land is in the name of the son of the assessee, so the deduction cannot be allowed, specially when the land was purchased by Sh. Gurnam Singh out of the sale proceeds of agricultural land and since Palwinder Singh was bachelor and was not hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... totally dependent upon his father. Undisputedly, the earlier land which was sold, also belonged to the assessee and the sale proceeds were also used for purchasing agricultural land. The possession of the said land was also taken by the assessee. The only objection raised by the revenue was that the said land was registered in the name of his son. In view of these facts, it cannot be said that the capital gains! sale proceed were in any way misused for any other purposes contrary to the provisions of law." We have heard the counsel for the revenue and gone through the aforesaid impugned order. In our opinion, from the impugned order, no substantial question of law is arising for consideration of this Court as the ITAT while recording a pure finding of fact has dismissed the appeal of the revenue. Undisputedly, in this case the assessee had sold the agricultural land which was being used by him for agricultural purposes. Out of sale proceeds of the said sale, the assessee has purchased other piece of land (land in question) in his name and in the name of his only son, who was bachelor and dependent upon him, for being used for agricultural purposes within the stipulated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the substantial question of law framed by us in the affirmative, in favour of the assessee and against the revenue. The appeal is accordingly dismissed with no order as to costs. The Tribunal while dismissing the appeal of the Revenue has held that the assessee has purchased the agricultural land and, therefore, the order passed by the Income Tax Appellate Tribunal is just and proper. In light of the aforesaid order, as no substantial question of law arises in the present appeal. The admission is declined." 5.4 Thus, the Hon'ble Jurisdictional High Court after noting the fact that for purchase of new agricultural land the fund was flown from the bank account of the assessee has held that it makes no difference it the land was purchased in the name of son. In the case in hand the lands were purchased by the assessee in his own name, his wife, two minor daughters and one minor son but the entire purchase consideration of all the lands has been made by the assessee from his own bank account and out of the sale consideration of existing agricultural land. The Hon'ble Rajasthan High Court in case of Laxmi Narayan vs. CIT 89 taxmann.com 334 while considering this issue has held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or investment made in the name of his children needs to be examined in view of the judicial pronouncements. There are judgments both in the favour of assessee and revenue but as held by Hon'ble Apex Court in the case of Vegetable Products Ltd 88 ITR 192, that "if two reasonable construction of a taxing provision are possible, then construction which favours the assessee must be adopted. This is will accepted rule of construction recognized by the Hon'ble court in several of its decisions". Keeping the above discussions and judgments in mind we observe that the Hon'ble High Court in the case of CIT V/s Ravinder Kumar Arora I.T.A. No.1106/2011 order dated 27.9.2011 held that "for the purpose of giving exemption under section 54F the word assessee must be given wide and liberal interpretation so as to include his legal heirs also Hon'ble Court further held that there is no warrant for strict interpretation to the word assessee as that would frustrate the object of granting exemption". Holding so, the Hon'ble Court observed as under; "9. On the aforesaid facts, we are of the view that the conditions stipulated in Section 54F stand fulfill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no warrant for giving too strict an interpretation to the word "assessee" as that would frustrate the object of granting exemption. I1. We also find judgments of other. High Courts giving benefit of Section 54F(l) of the Act when the house of the assessee is purchased jointly with his wife. In the case of CIT V~. Natrajan, (2007) 287 ITR 271 (Mad), though this case was decided in relation to Section 54 of the Act, the said Section is pari materia of Section 54F(l) of the Act. Likewise, the Punjab & Haryana High Court in the case of Cl'I' Vs, Gurnam Singh, (2010) 327 ITR 278 took the same view while discussing the provisions of Section 54 of the Act which is again pari materia of Section 54F(1) of the Act. 26. Hon'ble Delhi High Court in the case of CIT V/s Shri Kamal Wahal, ITA. No.4/2013 dated 11.1.2013, while adjudicating the issue relating to exemption under section 54F of the Act, held in favour of the assessee that the benefit could be given for deduction u/s 54F of the Act if the investment is made in the name of assessee's wife. The Hon'ble Court held as under; "7. We have no hesitation in agreeing with the view taken by the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee's wife. 10. Having regard to the rule of purposive construction and the object which Section 54F seeks to achieve and respectfully agreeing with the judgment of this Court, we answer the substantial question of law framed by us in the affirmative, in favour of the assessee and against the revenue." 27. From going through the above judgments as well as the facts of the instant appeal we find that the assessee has claimed exemption u/s 54B of the Act. If we apply the finding of Hon'ble courts on the issue before us we conclude that the provisions of Section 54B of the Act is mainly focused on providing the benefit to such assessee who sells their agriculture land and invest the sale consideration so received for purchasing another piece of agriculture land. The main weightage is for applying the consideration for purchase of agriculture land and it is not specifically mentioned as to whether it has to be purchased in the name of the assessee. For better perusal we mention below the provisions of Section 54B; S.54B:73 [Capital gain on transfer of land used for agricultural purposes not to be charged in certain cases. 54B. [Subject to the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the new asset: Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase of the new asset within the period specified in sub-section (1), then - the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of two years from the date of the transfer of the original asset expires; and the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid". 28. The above provision contemplates that the benefit/exemption is available if an agriculture land is purchased out of the sale consideration of sale of agriculture land. In the instant appeal also the assessee received the sale consideration from sale of agriculture land and applied the same to purchase another piece of agriculture land in the name of self and others in the name of wife and children. The revenue authorities have also accepted the claim and allowed by Ld.CIT(A) made by the assessee for purchase of agriculture land in the name of the assessee as well as his wife.The other two remaining persons are assessee's son and daughter.We do not find any reason that why the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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