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Shri Kamal Kant Kamboj Versus The ITO, Yamuna Nagar

2016 (7) TMI 461 - ITAT CHANDIGARH

Entitlement for exemption under section 54B - agriculture land purchased by assessee in the name of assessee's wife Smt. Manjit Kaur - Held that:- Following the decisions of Hon'ble Punjab & Haryana High Court in the cases of Jai Narain [2007 (8) TMI 295 - PUNJAB AND HARYANA HIGH COURT] and Dinesh Verma (2015 (7) TMI 486 - PUNJAB & HARYANA HIGH COURT) hold that purchase of agriculture land in the name of assessee's wife would not allow exemption under section 54B in favour of the assessee. - Dec .....

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appeal is whether assessee is entitled for exemption under section 54B of the Income Tax Act on account of agriculture land purchased by assessee in the name of his wife Smt. Manjit Kaur. 4. Briefly the facts of the case are that assessee alongwith Shri Sanjay Kumar had sold land measuring 24 kanals in village Ratoli, Yamuna Nagar for ₹ 72,00,000/- on 09.10.2006 to M/s Zion Promoters and Developers Pvt. Ltd. Faridabad. Since the land was within 8 km of the municipal limit and capital gain .....

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icer found that the aforesaid agriculture land situated at Manja Shahkampur, Jagadhri was purchased by Smt. Manjit Kaur wife of the assessee for ₹ 35,51,000/- on 15.05.2007 and not in the joint name with her husband. The Assessing Officer, therefore, was of the view that assessee is not entitled for exemption under section 54B of the Income Tax Act. The Assessing Officer distinguished the judgement of Hon'ble Punjab & Haryana High Court in the case of CIT Vs Gurnam Singh 327 ITR 27 .....

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f sale proceeds have been invested in purchase of new agriculture land in the name of his wife Smt. Manjit Kaur. The assessee relied upon judgement of the Hon'ble Punjab & Haryana High Court in the case of Shri Gurnam Singh (supra), Delhi High Court in the case of CIT V Kamal Wahal 351 ITR 4 and judgement of Madras High Court in the case of CIT V Vs Natarajan 287 ITR 271. The assessee submitted that later decision of the Hon'ble Punjab & Haryana High Court in the case of Gurnam S .....

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06 ITR 335 and later decision of jurisdictional Hon'ble Punjab & Haryana High Court in the case of CIT V Dinesh Verma 60 Taxman.com 461 and decided the issue against the assessee. The appeal of the assessee on this ground was accordingly, dismissed. 6. After considering rival submissions, I am not inclined to interfere with the orders of authorities below. Section 54B of the Income Tax Act reads as under : 54B. [(1)Subject to the provisions of sub-section (2), where the capital gain aris .....

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income tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,- (i) if the amount of the capital gain is greater than the cost of the land so purchased (hereinafter referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in r .....

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. [(2) The amount of the capital gain which is not utilised by the assessee for the purchase of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in .....

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the purchase of the new asset within the period specified in sub-section (1), then i) the at not so utilized 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 ii) the assessee shall be entitled to withdraw such amount in accordance with law the scheme aforesaid." 6(i) Hon'ble Punjab & Haryana High Court in the case of Jai Narain V ITO 306 ITR 335 held as under : &quo .....

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the benefit of the said section to an assessee who purchased the agricultural land even in the name of a third person. Wherever the legislature intended it to be so, it had specifically provided under the provision. The term "assessee" is qualified by the expression "purchased any other land for being used for agricultural purposes", which necessarily means that the new asset which is purchased has to be in the name of the assessee himself for seeking exemption under s. 54B. .....

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e respondent-assessee was entitled to the benefit under Section 54-B of the Income Tax Act, 1961 in respect of the property purchased from the sale proceeds in the name of his wife?" 7. The findings of Hon'ble Punjab & Haryana High Court in paras 16 to 20 read as under : Re: Questions No. 4 and 7. the additional question raised by our order dated 02.03.2015. 16. Question No.4 must be answered in favour of the appellant. As we mentioned earlier, the respondent sold his agricultural l .....

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efore, proceed on the basis that out of the sum of ₹ 60,00,000/-, the appellant invested only ₹ 44,76,000/- in the second property. 17. The Tribunal observed that it is settled now that an assessee can. purchase a new asset or part thereof in the name of his wife and that there was sufficient justification for the same on considerations, such as, stamp duty rebate, social considerations, security for ladies. The Tribunal noted that as long as the funds are invested the respondent' .....

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d, an assessee can purchase an asset or a part thereof in the name of his wife but he would not be entitled then to the benefit of Section 54B. Moreover, it is not the case of the assessee that he purchased the asset benami in the name of his wife. We have proceeded on the basis that his wife invested the amount of ₹ 16,84,700/- herself. 19. A Division Bench of this Court in Jai Namyan v. 1TO [2008] 306 ITR 335 held: 10. In interpreting the words contained in a statute, the court has not o .....

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o purchased the agricultural land even in the name of a third person. Wherever the Legislature intended it to be so, it had specifically provided under the provision. The term "assessee" is qualified by the expression "purchased any other land for being used for agricultural purposes", which necessarily means 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. The purchase of agricultural land .....

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e who after selling his residential house had purchased another residential house in his wife's name, the court had concluded that the assessee in such circumstances was entitled to exemption under section 54 of the Act. After giving our thoughtful consideration, we are unable to accept the view as laid down in V. Natarajan's case [20061 287 ITR 271 (Mad).' Thus, even assuming that the assessee had invested the said amount of ₹ 16,84,700/- in the name of his wife, it would have .....

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for the assessee relied upon decision of Hon'ble Punjab & Haryana High Court in the case of Gurnam Singh (supra) dated 01.04.2008 in which it was held as under : "Assessee having invested sale proceeds of his agricultural land in purchasing another agricultural land in joint names of himself and his only son who was bachelor and dependent upon him, was eligible for exemption under s. 54B." 9. In this case, the claim of deduction under section 54B of the Act was allowed on find .....

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and purchased another property in the name of his wife. The assessee was, therefore, entitled to exemption under section 54 of the Act. Hon'ble Punjab & Haryana High Court, however, in the case of Jai Narain Vs ITO (supra) dissented from this judgement, therefore, cannot be given precedence against the judgement of the jurisdictional Hon'ble Punjab & Haryana High Court. The ld. counsel for the assessee also relied upon decision of the Delhi High Court in the case of CIT V Kamal W .....

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upon order of ITAT Chandigarh Bench in the case of Bant Singh Vs ITO 52 Taxman.com 364 in which son of the assessee was joint owner of the land which was sold and purchased by the assessee because of the old age. The Tribunal relied upon decision in the case of Gurnam Singh (supra) therefore, these decisions could not be given preference against judgements of the High Court. In the case of CIT V Kamal Wahal (supra), Hon'ble Delhi High Court relied upon decision in the case of CIT Vs Ravinder .....

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