Case Law Details
Popat Manaji Rahinj Vs ITO (ITAT Pune)
ITAT Pune held that exemption under section 54B of the Income Tax Act based on new agricultural land bought in the name of the son and daughter-in-law and not in the name of the assessee is not allowable.
Facts- During the course of assessment proceedings under consideration, AO found that the appellant made a cash deposit in savings bank account with ADCC Bank Ltd. of Rs.47,50,000/-. When the appellant was called upon to explain the source of said cash deposits, it was explained that he had sold the agricultural land & others for a consideration of Rs.28,08,000/- and the cash deposits were made out the sale consideration received on sale of the above agricultural land. The appellant had also submitted that the sale proceeds were utilized for making the cash deposits in the savings bank account. The appellant had not offered the capital gains on sale of the said agricultural land. In the circumstances, AO had proceeded with the assessment of capital gains by adopting the fair market value of the property at 90,000/- per acre based on the ready reckoner valuation, where the land was situated and, accordingly, computed the long term capital gains of Rs.23,28,075/-.
The appellant also failed to offered any explanation in support of the source of cash deposits of balance of Rs.28,42,000/-. In the circumstances, AO had brought to tax the capital gains of Rs.17,59,750/- and also a sum of Rs.28,42,000/- as unexplained cash deposits in the bank account. AO also denied the claim for exemption u/s 54B on the ground that new agricultural lands were bought in the name of son and daughter-in-law.
Conclusion- Coordinate Bench of this Tribunal in the case of Vandana Maruti Pathare vs. ITO, 138 com 259 (Pune – Trib.) held that the deduction u/s 54B cannot be allowed in case where there was no purchase of the land/property in the name of the assessee. We do not find any reason to take a different view from the decision of this Tribunal in the case of Vandana Maruti Pathare.
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