TMI Blog2019 (10) TMI 445X X X X Extracts X X X X X X X X Extracts X X X X ..... order to be erroneous insofar as prejudicial to the interests of revenue. We do not find any justification for Ld. Pr. CIT to invoke the jurisdiction under section 263 of the Income Tax Act on the above reasons. In this view of the matter, we set aside the impugned order under section 263 of the Income-Tax Act and restore the original reassessment order. - ITA.No.2777/Del./2018 - - - Dated:- 10-10-2019 - Shri Bhavnesh Saini, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Assessee : Shri Ashwani Kumar, C.A. For the Revenue : Shri S.S. Rana, CIT-D.R. ORDER PER BHAVNESH SAINI, J.M. This appeal by assessee has been directed against the order of Ld. Pr. CIT, Karnal, Dated 16th February, 2018 for the assessment year 2008-2009 under section 263 of the Income Tax Act, 1961. 2. We have heard the Learned Representatives of both the parties and perused the material available on record. 3. In this case the assessment was completed under section 147/143(3) of the Income Tax Act on 2nd March 2016. The reassessment proceedings were in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble Jurisdictional Punjab Haryana High Court in the case of Jai Narain Vs ITO 306 ITR 335 has held that the purchase of agricultural land by the assessee in his son s or grandson s name cannot be entitled to exemption under section 54B of the Act. The Court held that section 54B nowhere suggests that the legislature intended to advance the benefit of the said section to an assessee who purchases agricultural land even in the name of a third person. The new asset has to be in the name of the assessee himself. 5. It is further noted that the assessee had received advance payment in cash for sale of land in violation of the provisions of section 269SS of The Act. Likewise, he had also paid advance in cash for the purchase of new land. The A.O. has completely overlooked these facts, and, in the process, has failed to examine not only the source of cash payments made by the assessee, but also the applicability of the provisions of section 271D of the Act in the case of the assessee, as well as in the case of Sh. Randhir Singh, from whom the assessee had purchased the land. 6. Besides, the assessing officer also failed to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to ladies. Mere registration in the name of spouse does not change the ownership of the land. The assessee continued to remain the beneficial owner of the land purchased. (ii) That the investment has been made out of the same funds received from transfer of agriculture land by Sh Jagjit Singh. Thus by application of section 27 of the Income Tax Act 1961, Section 4(ii) of the Wealth Tax Act 1957 and section 64 of the Income Tax Act 1961, Jagjit Singh becomes the deemed owner of the land as the money for purchase of land has been passed on without consideration and clubbing provisions are attracted when any asset or income is transferred to spouse without adequate consideration. (iii) That the wife of the assessee has expired and the file of said land has again passed in the hands of the assessee, being the legal heir. (iv) The case law quoted by your goodself is not applicable in our case as in that case the land was purchased in the name of son and grandson while in our case the land was purchased in the name of wife where by application of section 27 section 64 of the Income Tax Act and section 4(ii) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d it is submitted as under -: (i) That whole of the sale proceeds of the original land was received prior to the date of purchase of new agricultural land and the possession was also handed over to the buyer. The sale deed could not be registered due to some technical reasons, otherwise the transaction of sale of land was complete in the December 2006 when whole of the consideration was received and possession handed over. Copy of sale deed specifying the cheque numbers and amount vide which the sale consideration was, paid and bank statement of the assessee showing receipt of the same are being enclosed as proof of receipt of sale proceeds before the date of purchase of new agricultural land. (ii) That as per section 2(47) of the Income Tax Act 1961, where the consideration has been received and possession handed over, the transfer is said to be complete. In this case both the conditions are fulfilled and hence the transfer is deemed to be complete before the date of purchase of new land i.e., 08.01.2007. In view of the above, you are requested to accept the submissions and drop the proceedings u/s 263 of the Income Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.1. Through the supplementary written submissions dated 12.02.2018, the assessee stated as follows: - In continuation to my earlier submissions and further information called by your goodself, it is submitted as under:- (i) That out of the total sale of 7 Acre 7 Kanal and 1 Marie land the share o f asssesse was 1171/1261 and balance 90/1261 share was in the name of his wife late Smt Sunita Devi. Against her share of 90/1261, she received cheque of ₹ 17,04,510/- and the same was deposited in her bank account. Payment of ₹ 14,71,000/- was made out of withdrawal from this account. However, the assessee is not in possession of the passbook/bank statement for the same and neither the bank is able to provide the record of such an old transaction. However the fact that the cheque for ₹ 17,04,510/- was received is verifiable from the registered sale deed. The assessee is also ready to furnish an affidavit for the same. In view of the above you are requested to accept the source of payment and drop the proceedings initiated u/ 263 of the Income Tax Act, 1961. 3.2. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee submitted that revisional jurisdiction should not be exercised merely on an audit objection and relied upon Judgment of the jurisdictional Punjab and Haryana High Court in the case of CIT vs., Sohana Woollen Mills [2008] 296 ITR 238 (P H). He has submitted that on the date of filing of the original return of income and issue of notice under section 148 of the Income Tax Act, Judgment of jurisdictional Punjab and Haryana High Court in the case of CIT vs Gurnam Singh ((supra),) was in force which is dated 1st April 2008. Therefore, assessing officer has correctly followed the later decision in favour of the assessee. He has submitted that similar view have been taken by the Hon ble jurisdictional Delhi High Court in the case of CIT vs., Ravinder Kumar Arora [2012] 342 ITR 38 (Del.) and CIT-XII vs. Kamal Wahal [2013] 351 ITR 4 (Del.). He has submitted that Judgment of Hon ble Punjab Haryana High Court in the case of Jai Narain vs., ITO ((supra),) is prior to dated 13th August, 2007. He has submitted that since 148 proceedings have been done on the same issue and assessing officer has accepted the explanation of assessee in the light of the Judgment of Hon ble jurisdictional Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007 in which was held as under : Held, dismissing the appeal, that the assessee having purchased agricultural land in the name of his son or grandson could not be held entitled for exemption under section 54B of the Act. 6.1. The Learned Counsel for the Assessee, however, relied upon later decision of the Hon ble Punjab and Haryana High Court in the case of CIT vs Gurnam Singh (supra), which is Dated 1st April, 2008 in which it was held as under : From the impugned order, no substantial question of law arose for consideration as the Tribunal, while recording a pure finding of fact, had dismissed the appeal of the revenue. Undisputedly, the assessee had sold the agricultural land which was being used by him for agricultural purposes. Out of its sale proceeds, the assessee had purchased another piece of land (land in question) in his name and in the name of his only son, who was a bachelor and was dependent upon him, for being used for agricultural purposes within the stipulated time. Further, it was not the case of the revenue that from the sale proceeds of the agricultural land earlier owned by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee in the original return of income has correctly claimed exemption under section 54B as per Judgment of the Hon ble jurisdictional Punjab and Haryana High Court in the case of Gurnam Singh (supra), whereby assessee was permitted to make investment on account of capital gains in the name of his wife. It may also be noted here that the property sold was joint property of assessee and his wife. Therefore, there were no illegality in the action of the assessee in making investment in the name of one of the seller out of the same funds which have been received on account of sale of the property. The investment have been made out of the same funds. The assessee further explained that later on wife of assessee has expired, therefore, he being the legal-heir of his wife, become the absolute owner of the property in question and as such it would be deemed to be the investment made in the name of assessee. It may also be noted here that thereafter notice under section 148 of the I.T. Act, have been issued on 13th March, 2015. On this date also, the Judgment of the Hon ble jurisdictional Punjab and Haryana High Court in the case of CIT vs., Gurnam Singh (supra), Dated 1st Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e new agricultural land. The Ld. Pr. CIT, however, referred to the Judgment of the Hon ble Punjab and Haryana High Court in the case of CIT vs., Dinesh Verma (supra), Dated 6th July, 2015, which was subsequent decision after the filing of the original return of income as well as initiation of the reassessment proceedings under section 148 of the Income Tax Act. Therefore, it would not be applicable to the case of the assessee. It may also be noted here that when there were several decisions of the same High Court available on same propositions, the view in favour of the assessee should have been accepted. Particularly, in this case, when on the date of filing of the original return of income and initiation of reassessment proceedings, the Law declared by the Hon ble Punjab and Haryana High Court in the case of Gurnam Singh (supra), was in favour of the assessee. Therefore, assessee made a correct claim of exemption under section 54B of the Income Tax Act. When initiation of reassessment proceedings itself is bad in Law as was against the Judgment of the Hon ble jurisdictional Punjab and Haryana High Court, therefore, the reassessment order could not have been revised by the Ld. Pr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of the A.O. cannot be treated as prejudicial to the interests of Revenue, for example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of Revenue unless the view taken by the Income-tax Officer is unsustainable in law. 6.5. Since, in this case, assessing officer has taken one of the view permissible under the Law as per the Judgment of the Hon ble jurisdictional Punjab and Haryana High Court in the case of Gurnam Singh (supra), therefore, the Ld. Pr. CIT was not justified in invoking the jurisdiction under section 263 of the Income Tax Act. 6.6. It may also be noted here that in this case after passing of the reassessment order Dated 2nd March, 2016 an audit objection was raised on Dated 17th August, 2016 [PB-27] with regard to irregular exemption under capital gains on the same issue. The audit party has directed that exemption under section 54B is not allowable to the assessee because a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .7. Since in this case revisional proceedings have been initiated on mere audit objection and that a different view have been taken by the Ld. Pr. CIT as against the Judgment of the Hon ble jurisdictional Punjab and Haryana High Court in the case of Gurnam Singh (supra), therefore, it would not be enough to say that the reassessment order was erroneous or prejudicial to the interests of the revenue. The contention of the Ld. D.R. is, therefore, have no merit that the assessing officer has not examined this case and that the Order was erroneous insofar as prejudicial to the interests of revenue. 6.8. The Ld. D.R. also contended that the assessing officer has not examined the applicability of provisions of section 271D of the Income Tax Act. Though the Ld. Pr. CIT in the show cause notice has referred to the provisions of section 269SS and 271D of the Income Tax Act for making cash payment, however, the assessee has filed a reply to the same by submitting that the specified transactions were added under section 269SS and 269T w.e.f. 1st June, 2015, hence, these provisions are not applicable to the present case. The Ld. Pr. CIT did not give any findin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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