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Case Law Details

Case Name : Ashok Kumr Vs ITO (ITAT Delhi)
Appeal Number : ITA No.7460/Del/2018
Date of Judgement/Order : 28/12/2022
Related Assessment Year : 2009-10

Ashok Kumr Vs ITO (ITAT Delhi)

The short issue arising for consideration before me is whether the assessee is eligible to claim deduction under Section 54B of the Act. The factual aspect relating to this issue remains undisputed. Therefore, there is no need to deliberate further on facts. The only reason for which learned Commissioner (Appeals) has denied assessee’s claim of deduction under Section 54B of the Act is because the agricultural land in which the capital gain was invested was purchased in the name of assessee’s wife. This, in my view, is unsustainable. In the decisions cited before me, various Hon’ble High Courts including the Hon’ble Delhi High Court have clearly and categorically held that deduction under Section 54B/54F of the Act is available in cases where investments are made in property purchased in the name of wife. Therefore, following the ratio laid down in these decisions, I hold that the assessee is eligible for deduction under Section 54B of the Act. Accordingly, I direct the Assessing Officer to allow deduction under Section 54B of the Act.

FULL TEXT OF THE ORDER OF ITAT DELHI

This is an appeal by the assessee against order dated 31.08.2018 of learned Commissioner of Income-Tax (Appeals), Ghaziabad for the assessment year 2009-10.

2. Though, the assessee has raised grounds, both challenging the legality of proceedings initiated under Section 147 of the Act as well as on the merits of the addition made of Rs.3,55,602, however, at the time of hearing, learned counsel appearing for the assessee restricted his submission only on the merits of the addition made. Therefore, the legal grounds raised are deemed to have not been pressed. Accordingly, grounds are dismissed.

3. The facts relating to the issue on merits, briefly are, the assessee is a resident individual. During the year under consideration, the assessee received an amount of Rs.34,45 ,000 towards consideration from sale of an immoveable property. Since, the assessee did not file any return of income for the year under consideration, based on AIR information received indicating the sale transaction, the Assessing Officer reopened the assessment under Section 147 of the Act. As alleged by the Assessing Officer, the assessee did not comply with the notices issued in course of assessment proceedings. Therefore, he proceeded to complete the assessment to the best of his judgment by invoking the provisions of section 144 of the Act. Taking note of the fact that the property was owned by four persons, the Assessing Officer apportioned on 1/4th of the total sales consideration as gain of the assessee from sale of immoveable property and added back an amount of Rs.8,61,250.

4. Assessee contested the aforesaid addition before learned Commissioner (Appeals).

5. In course of first appellate proceedings, the assessee stated that the sales consideration received, which was added back as other income by the Assessing Officer, instead of capital gain, was actually invested in purchasing of agricultural land, hence, the assessee is eligible to claim deduction under Section 54B of the Act. In support of such contention, assessee furnished certain additional evidences. The additional evidences were forwarded to the Assessing Officer for examination and submitting report. After considering remand report and other material on record, learned Commissioner (Appeals) found that the actual share of the assessee in sales consideration is to the extent of Rs.4,30,625 and resultant long term capital gain arising at assessee’s hand is Rs.3,55,602. Thus, he directed the Assessing Officer to sustain addition of Rs.3,55,602 as long term capital gain. While doing so, he rejected assessee’s claim of deduction under Section 54B of the Act on the ground that the agricultural land was purchased in the name of assessee’s wife.

6. Before me, learned counsel appearing for the assessee submitted that investment in purchase of agricultural land in the name of wife would also be eligible for deduction under Section 54B of the Act. In support of such contention, learned counsel for the assessee relied upon the following decisions:

1. Laxmi Narayan vs. CIT, (2018) 402 ITR 0117, High Court of Rajasthan;

2. CIT vs. Kamal Wahal, (2013) 351 ITR 0004, High Court of Delhi;

3. CIT vs. V. Natarajan, (2006) 287 ITR 0271m High Court of Madras; &

4. CIT vs. Ravinder Kumar Arora, (2012) 342 ITR 0038, High Court of Delhi.

7. Learned Departmental Representative strongly relied upon the observations of the assessee.

8. I have considered rival submissions in the light of decisions relied upon and perused the material available on record.

9. The short issue arising for consideration before me is whether the assessee is eligible to claim deduction under Section 54B of the Act. The factual aspect relating to this issue remains undisputed. Therefore, there is no need to deliberate further on facts. The only reason for which learned Commissioner (Appeals) has denied assessee’s claim of deduction under Section 54B of the Act is because the agricultural land in which the capital gain was invested was purchased in the name of assessee’s wife. This, in my view, is unsustainable. In the decisions cited before me, various Hon’ble High Courts including the Hon’ble Delhi High Court have clearly and categorically held that deduction under Section 54B/54F of the Act is available in cases where investments are made in property purchased in the name of wife. Therefore, following the ratio laid down in these decisions, I hold that the assessee is eligible for deduction under Section 54B of the Act. Accordingly, I direct the Assessing Officer to allow deduction under Section 54B of the Act.

10. In the result, the appeal is partly allowed.

Order pronounced in the open court on 28th December, 2022.

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