THE ITO, 2(5), INDORE vs. LATE SHRI RAM PRASAD BANGLEWALA L/H SHRI MAHESH BANGLEWALA, INDORE

आयकर अपील�य अ�धकरण ,इ�दौर �यायपीठ ,इ�दौर IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE �ी कुल भारत, �या�यक सद�य तथा �ी मनीष बोरड, लेखा सद�य के सम� BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER आ.अ.सं /.I.T.A. No.40/Ind/2017 �नधा�रणवष� / Assessment Year: 2009-10 Income-tax Officer, vs. Late Shri Ram Prasad Banglewala L/H Shri 2(5), Mahesh Banglewala, Indore. 930, Bijalpur, Indore. अपीलाथ� /Appellant ��यथ� /Respondent �था.ले.सं./PAN: AWQPB0658P

: Shri Satish Solanki, DR अपीलाथ� क� ओर से/Appellant by : None. ��यथ� क� ओर से/Respondent by

: 31.05.2018. सुनवाई क� तारीख/Date of hearing : 31.05.2018 उ�ोषणा क� तारीख/Date of pronouncement

-: 2 :- Late Shri. Ram Pd. Banglewala आदेश /O R D E R PER KUL BHARAT, J.M. : This appeal by the Revenue is directed against the

order of Ld. CIT(A)-I, Indore, dated 03.10.2016.

as under :-

“Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in allowing deduction u/s 54B for purchase of agriculture land in the name of wives of grandsons of assessee and deleting the addition of Rs. 1,78,11,136/- made on account of Long Term Capital Gain.”

assessee was reopened for assessment u/s 144 read with

Section 147 of the Income-tax Act, 1961, (hereinafter

referred to as the ‘Act’ ) was reframed b t order dated 18th

March, 2010.

addressed to the AO for dropping the assessment

-: 3 :- Late Shri. Ram Pd. Banglewala proceedings. However, the AO observed that at the time ,of

the sale of land, the assessee was alive and he himself

signed the sale deed. Therefore, he was liable to file his

return of income and to offer the long term capital gain for

taxation in his individual capacity, which was not done.

The AO observed that the assessee ought to have filed

return in response to the notice u/s 148 of the Act. Hence,

the AO proceeded to compute long term capital gain at Rs.

1,78,11,136/-. Against this order, the assessee preferred

an appeal before the Ld. CIT(A), who after considering the

submission and the documents filed during the course of

appellate proceedings, deleted the addition.

time of hearing, no one appeared on behalf of the assessee,

despite service of notice. An acknowledgement is placed on

record. Under these facts, the appeal was taken for hearing

in absence of the assessee.

-: 4 :- Late Shri. Ram Pd. Banglewala 6. The Ld. Departmental Representative submitted that

the assessee has not filed any documents before the AO

and before the Ld. CIT(A), certain documents were filed. No

remand report was sought from the AO. Hence, the AO was

not given opportunity to represent his case. 7. We have heard the Ld. Departmental Representative.

The Ld. CIT(A) has decided the issue by observing as under

:- 8. “7.0. Ground Nos. 4& 6: These grounds the appellant are directed against the addition of Rs. 17811136/- as Long Term Capital Gains on sale of land and rejecting the claim made u/s 54B of The Act. The detailed facts of the case as per the assessment order are reproduced at Para No.2 above and the detailed submissions of the appellant are reproduced at Para No.3 above. On perusal of material placed on record the contention of the appellant that the cash deposited in the bank accounts of the appellant Late Shri Ramprasad Banglewala, Shri Mahesh Banglewala and Smt. Rukmabai represents the

-: 5 :- Late Shri. Ram Pd. Banglewala sale consideration of agricultural land standing in the name of the appellant being land situated at Village Bijalpur Tehsil & District Indore, Patwari Halka No. 10 Survey Nos. 749/1,750/2,751,761/2 and 762 admeasuring 1.065 Hectares. The issue has been discussed in detail in the order of CIT(A)-I, Indore in Appeal No.IT- 148/2014-15 dated 29.3.2016. As observed in the said order the cash deposits were explained by way of cash flow chart and on analysis of the said cash flow chart it was found that the cash deposit of Rs. 1500000/- in the bank account of the appellant on 12.05.2008 is not found to have been satisfactorily explained and hence the source of such deposit remains unexplained. The same is liable to be added in the hands of the appellant as it is also not explained by way of sale consideration of land received in cash. The appellant has not placed any other explanation on record to explain the above deposit and has relied on the same cash flow chart as produced in the case of Shri Mahesh Banglewala which as has been stated above does not explain the deposit. In view of above the amount of

-: 6 :- Late Shri. Ram Pd. Banglewala Rs.1500000/- is therefore added to the total income of the appellant for the year under consideration. Penalty proceedings u/s 271(1)(c) of the Act are also initiated as the appellant has concealed the above income. 7.1. As regards the addition of Rs. 17811136/- the AO computed the LTCG on sale of land and did not consider the claim of the appellant vi] s 54B of The Act though the claim vi] s 54F has been allowed. The AO has however not given any reasons for rejecting the same. On perusal of the assessment record it is seen that the 'appellant had invested the sale consideration in purchase of four other agricultural lands being land situated at Village Santer Tehsil Mhow Dist Indore Patwari Halka No. 4/2 Survey No.3/1 Survey No. 4/2 Survey No.14/1 & Survey No. 15. The copies of purchase deed have been filed and as' per the purchase deed these have been purchased in the year under consideration itself. During the course of appellate proceedings in the case of Shri Mahesh Banglewala in Appeal No.IT- 148/2014-15 the source of investment has been duly verified and the cheque payments as noted

-: 7 :- Late Shri. Ram Pd. Banglewala in the purchase deed have been made through the bank account of Shri Mahesh Banglewala with Bank of India and the cash payments are verified from the cash flow chart submitted. The land sold in question was agricultural land and was being used for agriculture there is no dispute regarding the same. Similarly the land purchased is agricultural land and hence the requirements of section 54B are found to be fulfilled. The appellant has also pointed out that investment has been made in the names' of wives of grandsons in view of the lower registration charges in case of women and the fact that the son of the appellant was not of sound mental health. There is a plethora of judgments wherein it has been held that investment in the name of son, wife etc. is also eligible for claim of exemption u/s 54B of the Act provided the investment is out of sale consideration received on sale of original asset notably the decisions in the case of CIT Vs Gurnam Singh, (P&H) 327 ITR 278(2010), CIT Vs Ravinder Kumar Arora,342 ITR 38(Delhi)(2012) & DIT Vs Mrs. Jennifer Bhide 15 Taxmann.com 82

-: 8 :- Late Shri. Ram Pd. Banglewala (Kar)(2011). It is also argued by the appellant that if two views are possible the view favourable to the appellant is to be adopted. The total investment in purchase of the new asset is Rs. 18929432/- which is more than the capital gains computed by the AO and hence the entire LTCG is exempt u/s 54B of The Act. In view of the above the addition of Rs. 17811140/- is directed to be deleted. These grounds of the appellant are therefore allowed. ”

ought to have sought remand report from the AO, when the

assessment has been passed u/s 144 of the Act and c

certain documents have been filed during the appellate

proceedings. We, therefore, set-aside the order of the Ld.

CIT(A) and restore the grounds to the file of the Ld. CIT(A)

for decision afresh. Needless to say that the Ld. CIT(A)

would give sufficient opportunity to the parties.

-: 9 :- Late Shri. Ram Pd. Banglewala 10. Appeal of the Revenue is allowed for the statistical purposes. The order pronounced in the open court on 31.05.2018.

Sd/- Sd/- (मनीष बोरड) (कुल भारत) लेखा सद�य �या�यक सद�य (KUL BHARAT) (MANISH BORAD) ACCOUNTANT MEMBER JUDICIAL MEMBER

Indore; �दनांक Dated : 31/05/2018 CPU*/SPS Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order Private Secretary/DDO, Indore