IMRAN KHAN,BHOPAL vs. THE ITO2 (2), BHYOPAL

Per Vijay Pal Rao, JM:

This appeal by the Assessee is directed against the order dated 28.02.2023 of Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), for assessment year 2013-14. The assessee has raised following grounds of appeal:

“1.That on the facts & in the circumstances of the case and in law, the respondent erred in disallowing part deduction of ₹ 61,16,000/- claimed U/S 54B in respect of Agricultural lands purchased in the name of his wife out of sale proceeds of original asset.

ITANo.168/Ind/2023 Imran Khan 2.That on the facts & in the circumstances of the case and in law, the respondent erred in disallowing part deduction of ₹72,80,964/- claimed U/S 54B in respect of Agricultural lands purchased in the name of his minor children also out of sale proceeds of original asset. 3.That the respondent ought to have considered the intent and spirit of Section 54B which simply casts an obligation upon the assessee to buy agricultural land for claiming the said deduction without specifying in whose name the new Land should be bought. 4.That the respondent failed to notice that the minors are incompetent to be a buyer in the eyes of law and assessee is a natural/legal guardian. 5.That the respondent failed to see that the subject agricultural lands were purchased in the name of wife & minor children and squarely allowed even under 2(9) of the Benami Transaction Prohibition Act 1988 and even under the amended Act passed in the year 2016. 6.The statutory recognition to purchase property in name of wife and minor children is a good evidence which the respondent failed to comply under the I.T. Act.” 2. The assessee is an individual and filed return of income on 28.07.2013 declaring total income of Rs.Nil after claiming deduction u/s 54B. The case of assesee was selected for scrutiny under CASS on the issue of capital gain arising from sale of urban agricultural land. The assessee has explained that he invested more than the sale consideration of existing agricultural land in purchase of five agricultural lands in the name of assesse, his wife, two minor daughters and one minor son total amounting to Rs.2,33,32,420/-. The AO denied the claim of the assessee in respect of the investment made by the assessee for purchase of agricultural lands in the name of family members. Thus, the AO restricted the claim of deduction u/s 54B only to the extent of the investment in Page 2 of 20

ITANo.168/Ind/2023 Imran Khan purchase of agricultural land by the assessee in his own name for Rs.69,55,000/-. Consequently the AO has made addition on account of long term capital gain of Rs.1,33,96,964/-. The assessee challenged the action of the AO before the CIT(A) but could not succeed.

ITANo.168/Ind/2023 Imran Khan purchased by the assessee in the said case in the name of wife and investment was also made by the wife of the assessee therefore, the said decision of Hon’ble Punjab and Haryana High court cannot be applied to the facts of the case of the assessee.

3.1 He has further submitted that the Hon’ble jurisdictional High

Court in case of Pr. CIT vs. Balmukund Meena in

ITANo.118/Ind/2016 has upheld the order of this tribunal allowing

the claim of deduction u/s 54B in respect of the land purchased by

the assesse in the name of his son. Ld. AR has then relied upon the

decision of this tribunal dated 28.09.2018 in case of Shri Raja Ram

Patidar vs. ITO in ITANo.371/Ind/2015. Thus, ld. AR has submitted

that when all other conditions of section 54B are complied with by

the assesse then the deduction u/s 54B cannot be denied merely

because the assessee purchased the land in the name of his wife

and children.

authorities below and submitted that the CIT(A) has followed the

decision of Hon’ble Punjab & Haryana High Court as well as

decision of the Delhi benches of the Tribunal in case of Karamvir vs.

ITO dated 06.07.2022 in ITANo.2023/Del/2017.

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ITANo.168/Ind/2023 Imran Khan 5. We have considered rival submissions as well as relevant

material on record. The assessee has sold the agricultural land for

consideration of Rs. 2 crore but long term capital gain was workout

on the market value being stamp duty value of Rs.2,55,00000/-.

The assesse purchased new agricultural lands and the details

which are given by the AO at page no.2 as under:

“S.No. Date of purchase Purchased in the name Value (Rs.) of 1 31.03.2013 Smt. Shabnam Khan 61,16,000/- W/s. Imran Khan 2 31.03.2013 Ku. Sheenam Khan 19,67,000/- (Minor) D/o Imran Khan 3 29.03.2013 Ku. Iqra Khan (Minor) 21,85,420/ D/o Imran Khan 4 29.03.2013 Mr. Imran Khan (self) 69,55,000/- 5 29.03.2013 Faizan Khan (minor). 61,09,000/- S/o Imran Khan Total purchase value Rs.2,33,32,420

5.1 Thus, the assessee claimed that against the consideration as

per the market value of Rs.2,55,00,000/- and long term capital gain

of Rs.2,03,51,964/- the assessee has invested Rs.2,33,32,420/- for

purchase of five agricultural lands out of which one land was

purchased in the name of the assessee and remaining four

agricultural lands were purchased in the name of his wife Shabnam

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ITANo.168/Ind/2023 Imran Khan Khan, his two minor daughters, Sheenam Khan & Iqra Khan and

one minor son Mr. Faizan Khan. The AO has disallowed the claim of

deduction u/s 54B to the extent of the new land purchased by the

assessee in the name of family members and allowed the claim only

to the extent of Rs.69,55,000/- for which the assessee has

purchased the land in his own name. Accordingly the AO has

worked out long term capital gain of Rs. 2,03,51,964/-. The facts

regarding the sale of agricultural land and purchase of new

agricultural land by the assessee are not in dispute but the claim of

the assessee was denied by the AO in respect of the agricultural

land purchased by the assessee in the name of family members

being wife, daughters and son. The CIT(A) has confirmed the action

of the AO by following judgment of Hon’ble Punjab & Haryana High

Court in case of CIT vs. Dinesh Verma (supra). It is pertinent to note

that the Hon’ble High Court has observed in para 16 as under:

“16. Question No.4 must be answered in favour of the appellant. As we mentioned earlier, the respondent sold his agricultural land for a sum of Rs.60,00,000/-. Out of the sale proceeds he invested only a sum of Rs.44,76,000/- towards the purchase of another agricultural plot. The balance consideration of Rs.16,84,000/- in respect of that plot was paid by the respondent's wife. It is not the respondent's case that it is actually he who paid the amount of 84 ,700/- and that his wife's name was added benami and that the title

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ITANo.168/Ind/2023 Imran Khan thereof even to that extent vested in himself. We must, therefore, proceed on the basis that out of the sum of Rs.60,00,000/-, the appellant invested only Rs.44,76,000/- in the second property.”

5.2 Thus it was found by the Hon’ble High Court that the

investment was made by the wife of the assessee and therefore, to

that extent the title is also vested in the name of the wife. In case in

hand, we find that the entire payments for purchase of new land

has been made by the assessee from his own bank accounts. On

the directions of the Bench the assessee has produced the bank

account statements of the assessee reflecting payments made by

the assessee for purchase of these five lands and particularly the

lands purchased in the name of wife, two minor daughters and one

minor son. The details given in the respective sale deeds for

payment of the consideration for purchase of the lands are

matching with the entries in the bank account of the assessee. The

payments details of purchase of new lands are reproduced as

under:

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ITANo.168/Ind/2023 Imran Khan

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ITANo.168/Ind/2023 Imran Khan

5.3 These details has been verified by us from the relevant bank account of the assessee and it is manifest that all the payments were made by the assessee from his own bank accounts. The Hon’ble jurisdictional High Court in case of Pr. CIT vs. Balmukund Meena vide decision dated 16.02.2017 in ITANo.118 of 2016 has held as under: “Against the order of assessing officer, the assesse has preferred an appeal before CIT (Appeal) and vide order dated 30.01.2015, the Page 9 of 20

ITANo.168/Ind/2023 Imran Khan appeal was allowed and there was a deletion of Rs.1,19,04,165/- on account of disallowance under Section 54B by holding that as the fund was flown from the account of assessee, it makes no difference if the assessee does not include his own name. Thereafter, an appeal was preferred before before the Income Tax Appellate Tribunal and the Income Tax Appellate Tribunal has also dismissed the order passed by the Revenue dated 09.03.2016. Against the order of the dismissal of the appeal by the Income Tax Appellate Tribunal, present appeal has been filed. Shri Sumit Neema, learned counsel for the respondent has fairly stated before this Court that no substantial question of law is arising in the present appeal by virtue of the judgment delivered by High Court of Punjab and Haryana, reported in 2008 [170] TAXMAN 160 (PUNJ. & HAR.). Paragraph Nos.3 and 4 of the aforesaid judgment read as under:- ⠜3. Feeling aggrieved against the aforesaid order, the respondent filed an appeal before the CIT (Appeals), who vide his order dated 17-12-2002 allowed the same and set aside the action of the Assessing Officer in denying the deduction under section 54F of the act to the respondent. Against the said order, the revenue filed an appeal before the ITAT, who vide its order dated 24-4-2006 has dismissed the appeal, while observing as under:- "The issue before us revolves around allowability of deduction under sections 54B and 54F of the Act. The land in question was purchased by the assessee in the name of his son. The learned Assessing Officer disallowed the deduction on the ground that the land is in the name of the son of the assessee, so the deduction cannot be allowed, specially when the land was purchased by Sh. Gurnam Singh out of the sale proceeds of agricultural land and since Palwinder Singh was bachelor and was not having any independent source of income was dependent upon his father even for livelihood. The conclusion of the learned Assessing Officer is available on page 4 of the assessment order. Before coming to a conclusion, we are supposed to analyze section 54B which is applicable where the capital gains arise from the transfer of capital asset and was being used for agriculture purposes which was invested in the purchase of any other land and again being used for agricultural purposes. There is no dispute to the fact that the assessee sold his agricultural land and then purchased other agricultural land out of the sale proceeds and got registered some portion of the land in the name of his only son who was a bachelor at the relevant time. If the Page 10 of 20

ITANo.168/Ind/2023 Imran Khan 'ikrarnama'/agreement is analyzed which is available at page 9 of the paper book, it clearly speaks that "The purchaser is at liberty to execute the sale deed in the name of any member of his family. He is also at liberty to execute as many as sale deeds as he desires...." If the contents of the 'ikrarnama'/agreement to sale is analyzed one undisputed fact is oozing out that the sale proceeds of the agricultural land were in fact used to purchase another agricultural land. Section 54B speaks about transfer of capital asset being land within a specified period and another land is purchased for agricultural purposes, then it shall be dealt with in accordance with the provision of this section. It is not the case of the revenue that the capital gain was not utilized by the assessee for the purchase of new asset before the date of furnishing the return of income under section 139. In fact, if the facts as detailed in the 'ikrarnama' are analyzed, the capital gains was utilized by the assessee for purchasing the new asset. Section 54B is applicable as per the provision of clause 2 of the section. The only dispute raised by the revenue is that the land was got registered in the name of his son. This fact is not disputed that the assessee was an old and illiterate person and never filed any return. At the same time, he was not having any other source of income also. It is not the case that the sale proceeds were used for any other purposes or beyond the stipulated period. This fact was also not disputed that the son of the assessee was bachelor and was not having any other source of income and was totally dependent upon his father. Undisputedly, the earlier land which was sold, also belonged to the assessee and the sale proceeds were also used for purchasing agricultural land. The possession of the said land was also taken by the assessee. The only objection raised by the revenue was that the said land was registered in the name of his son. In view of these facts, it cannot be said that the capital gains! sale proceed were in any way misused for any other purposes contrary to the provisions of law." We have heard the counsel for the revenue and gone through the aforesaid impugned order. In our opinion, from the impugned order, no substantial question of law is arising for consideration of this Court as the ITAT while recording a pure finding of fact has dismissed the appeal of the revenue. Undisputedly, in this case the assessee had sold the agricultural land which was being used by him for agricultural purposes. Out of sale proceeds of the said sale, Page 11 of 20

ITANo.168/Ind/2023 Imran Khan the assessee has purchased other piece of land (land in question) in his name and in the name of his only son, who was bachelor and dependent upon him, for being used for agricultural purposes within the stipulated time. Further, it is not the case of the revenue that from the sale proceeds of the agricultural land earlier owned by the assessee, the land in question was purchased for any other purpose than the agricultural purpose. Undisputedly, the purchased land is being used by the assessee only for agricultural purpose and merely because in the sale deed his only son was also shown as co-owner, the ITAT has rightly come to the conclusion that it does not make any difference because the purchased land is being used by the assessee for agricultural purposes. It is not the case of the revenue that the said land is being used exclusively by his son. In our view, a pure finding of fact has been recorded by the ITAT which does not require any interference in this appeal. 4. No substantial question of law is involved in this appeal.â A similar view has been taken by the High Court of Delhi in the case of Commissioner of Income-tax-XII vs. Kamal Wahal, reported in 2013 (30) taxmann.com 34 (Delhi). Paragraph Nos. 8, 9 and 10 of the aforesaid judgment read as under:- “8. This Court in the decision cited alone also noticed the judgment of the Madras High Court (supra) and agreed with the same, observing that though the Madras case was decided in relation to Section 54 of the Act, that Section was in pari materia with Section 54F. The judgment of the Punjab and Haryana High Court in the case of CIT Vs. Gurnam Singh : (2010) 327 ITR 278/[2008] 170 Taxman 160 in which the same view was taken with reference to Section 54F was also noticed by this Court. 9. It thus appears to us that the predominant judicial view, including that of this Court, is that for the purposes of Section 54F, the new residential house need not be purchased by the assessee in his own name nor is it necessary that it should be purchased exclusively in his name. It is moreover to be noted that the assessee in the present case has not purchased the new house in the name of a stranger or somebody who is unconnected with him. He has purchased it only in the name of his wife. There is also no dispute that the entire investment has come out of the sale proceeds and that there was no contribution from the assessee's wife.

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ITANo.168/Ind/2023 Imran Khan 10. Having regard to the rule of purposive construction and the object which Section 54F seeks to achieve and respectfully agreeing with the judgment of this Court, we answer the substantial question of law framed by us in the affirmative, in favour of the assessee and against the revenue. The appeal is accordingly dismissed with no order as to costs. The Tribunal while dismissing the appeal of the Revenue has held that the assessee has purchased the agricultural land and, therefore, the order passed by the Income Tax Appellate Tribunal is just and proper. In light of the aforesaid order, as no substantial question of law arises in the present appeal. The admission is declined.”

5.4 Thus, the Hon’ble Jurisdictional High Court after noting the fact that for purchase of new agricultural land the fund was flown from the bank account of the assessee has held that it makes no difference it the land was purchased in the name of son. In the case in hand the lands were purchased by the assessee in his own name, his wife, two minor daughters and one minor son but the entire purchase consideration of all the lands has been made by the assessee from his own bank account and out of the sale consideration of existing agricultural land. The Hon’ble Rajasthan High Court in case of Laxmi Narayan vs. CIT 89 taxmann.com 334 while considering this issue has held in para 7.2 to 7.4 as under: “7.1 On the first issue of sec.263 in view of the decision of Malabar Industrial company Ltd. (supra) Sec.263 provisions are taken only on the ground of prejudicial and interest loss of the revenue to the Government. Merely change of opinion will not give any right u/s 263 hence, the issue regarding Sec. 263 is required to be answered in favour of the assessee and against the department. 7.2 On the ground of investment made by the assessee in the name of his wife, in view of the decision of Delhi High Court in Sunbeam Page 13 of 20

ITANo.168/Ind/2023 Imran Khan Auto Ltd. and other judgments of different High Courts, the word used is assessee has to invest it is not specified that it is to be in the name of assessee. 7.3 It is true that the contentions which have been raised by the department is that the investment is made by the assessee in his own name but the legislature while using language has not used specific language with precision and the second reason is that view has also been taken by the Delhi High Court that it can be in the name of wife. In that view of the matter, the contention raised by the assessee is required to be accepted with regard to Section 54B regarding investment in tubewell and others. In our considered opinion, for the purpose of carrying on the agricultural activity, tubewell and other expenses are for betterment of land and therefore, it will be considered a part of investment in the land and same is required to be accepted. 4. In view of the above, all the issues are answered in favour of the assessee and against the department.”

5.5 Accordingly when it is evident from the record that the entire investments has been made by the assessee from his own account and utilizing the sale consideration of the transfer of existing agricultural land then the benefit of the provisions of section 54B cannot be denied merely on the ground that some of the lands were purchased by the assessee in the name of wife, two minor daughters and one minor son. This tribunal in case of Rajaram Patidar vs. ITO (supra) has also taken this view in para 25 to 28 as under:

“25. We find that there is no dispute to the fact that the amount utilized for purchasing the agriculture land in the name of Mr. Umesh Patidar and Ms. Seema Patidar has its nexus to the sale consideration received by the assessee. Now whether the benefit is available to the assessee for investment made in the name of his children needs to be examined in view of the judicial pronouncements. There are judgments both in the favour of assessee and revenue but as held by Hon'ble Apex Court in the case of Page 14 of 20

ITANo.168/Ind/2023 Imran Khan Vegetable Products Ltd 88 ITR 192, that "if two reasonable construction of a taxing provision are possible, then construction which favours the assessee must be adopted. This is will accepted rule of construction recognized by the Hon'ble court in several of its decisions". Keeping the above discussions and judgments in mind we observe that the Hon'ble High Court in the case of CIT V/s Ravinder Kumar Arora I.T.A. No.1106/2011 order dated 27.9.2011 held that "for the purpose of giving exemption under section 54F the word assessee must be given wide and liberal interpretation so as to include his legal heirs also Hon'ble Court further held that there is no warrant for strict interpretation to the word assessee as that would frustrate the object of granting exemption". Holding so, the Hon'ble Court observed as under; "9. On the aforesaid facts, we are of the view that the conditions stipulated in Section 54F stand fulfilled. It would be treated as the property purchased by the assessee in his name and merely because he- has included the name of his wife and the property purchased in the joint names would not make any difference. Such a conduct has to be, rather, encouraged which gives empowerment to women. There are various schemes floated by the Government itself permitting joint ownership with wife. If the. view of the Assessing Officer (AO) or the contention of the Revenue is accepted, it would-be a derogatory step. 10. Even when we look into the matter from another angle, facts remain that the assessee is the actual and constructive owner of the house. In CIT Vs. Podar Cements (P) Ltd. & Ors., (1997) 226 ITR 625 (SC), the Supreme Court has also accepted the theory of constructive ownership. Moreover, Section 54F mandates that the house should be purchased by the assessee and it does not stipulate that the house should be purchased in the name of the assessee only. Here is a case where the house was purchased by the assessee and that too in his name and wife's name was also included additionally. Such inclusion of the name of the wife for the above-stated peculiar. factual reason should not stand in the way of the deduction legitimately accruing to the assessee. Objective of Section 54F and the like provision such as Section 54 is to provide impetus to the house construction and so long as the purpose of house construction is achieved, such hyper technicality should not impede the way of deduction which the legislature has allowed. Purposive construction is to be preferred as against the literal construction, more so when Page 15 of 20

ITANo.168/Ind/2023 Imran Khan even literal construction also does not say that the house should be purchased in the name of the assessee only. Section 54F of the Act is the beneficial provision which should be interpreted liberally in favour of the exemption/deduction to the taxpayer and deduction should not be denied on hyper technical ground. Andhra Pradesh High Court in the. case of Late Mir Gulam Ali Khan Vs. CIT, (1987) 165 ITR 228 (AP) has held that the object of granting exemption under Section 54 of the Act is that an assessee who sells a residential house -for purchasing another house must be given exemption so far as capital gains are concerned. The word "assessee"- must be given wide and liberal interpretation so as to include his legal heirs also. There is no warrant for giving too strict an interpretation to the word "assessee" as that would frustrate the object of granting exemption. I1. We also find judgments of other. High Courts giving benefit of Section 54F(l) of the Act when the house of the assessee is purchased jointly with his wife. In the case of CIT V~. Natrajan, (2007) 287 ITR 271 (Mad), though this case was decided in relation to Section 54 of the Act, the said Section is pari materia of Section 54F(l) of the Act. Likewise, the Punjab & Haryana High Court in the case of Cl'I' Vs, Gurnam Singh, (2010) 327 ITR 278 took the same view while discussing the provisions of Section 54 of the Act which is again pari materia of Section 54F(1) of the Act. 26. Hon'ble Delhi High Court in the case of CIT V/s Shri Kamal Wahal, ITA. No.4/2013 dated 11.1.2013, while adjudicating the issue relating to exemption under section 54F of the Act, held in favour of the assessee that the benefit could be given for deduction u/s 54F of the Act if the investment is made in the name of assessee's wife. The Hon'ble Court held as under; "7. We have no hesitation in agreeing with the view taken by the Tribunal. Apart from the fact that the judgments of the Madras and Karnataka High Courts (supra) are in favour of the assessee, the revenue fairly brought to our notice a similar view of this Court in CIT Vs. Ravinder Kumar Arora: (2012)342 ITR 38 (Del.). That was also a case which arose under Section 54F of the Act. The new residential property was acquired in the joint names of the assessee and his wife. The income tax authorities restricted the deduction under Section .54F to 50% on the footing that the deduction was not available on the Page 16 of 20

ITANo.168/Ind/2023 Imran Khan portion of the investment which stands in the name of the assessee's wife. This view was disapproved by this Court. It noted that the entire purchase consideration was paid only by the assessee and not a single penny was contributed by the. assessee's wife. It also noted that a purposive construction is to be preferred as against a literal construction, more so when even applying the literal construction, there is nothing in the section to show that the house should be in the name of the assessee only. As a matter of fact, Section 54F in terms does not require the new residential property shall be purchased in the name of the assessee; it merely says that the assessee should have purchased/constructed "a residential house". 8. This court in the decision cited alone also noticed the judgment of the Madras High Court (supra) and agreed with the same, observing that though the Madras case was decided in relation to Section 54 of the Act, that Section was in pari materia with Section 54F. The judgment of the Punjab and Haryana High Court in the case of CIT V s. Gurnam Singh , (2014) 327 ITI{ 278 in which the same view was taken with reference to Section 54F was also noticed by this Court. 9. It thus appears to us that the predominant judicial view, including that of this, Court. is that for the purposes of Section 54F, the new residential house need not be purchased by the assessee in his own name nor is it necessary that it should be purchased exclusively in his name. It is moreover to be noted that the assessee in the present case has not purchased the new house in the name of a stranger or somebody who is unconnected with him. He has purchased it only in the name of his wife. There is also no dispute that the entire investment has come out of the sale proceeds, and that there was no contribution from the assessee's wife. 10. Having regard to the rule of purposive construction and the object which Section 54F seeks to achieve and respectfully agreeing with the judgment of this Court, we answer the substantial question of law framed by us in the affirmative, in favour of the assessee and against the revenue." 27. From going through the above judgments as well as the facts of the instant appeal we find that the assessee has claimed exemption u/s 54B of the Act. If we apply the finding of Hon'ble courts on the

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ITANo.168/Ind/2023 Imran Khan issue before us we conclude that the provisions of Section 54B of the Act is mainly focused on providing the benefit to such assessee who sells their agriculture land and invest the sale consideration so received for purchasing another piece of agriculture land. The main weightage is for applying the consideration for purchase of agriculture land and it is not specifically mentioned as to whether it has to be purchased in the name of the assessee. For better perusal we mention below the provisions of Section 54B; S.54B:73 [Capital gain on transfer of land used for agricultural purposes not to be charged in certain cases. 54B. [Subject to the provisions of sub-section (2), where the capital gain arises] from the transfer of a capital asset being land which, in the two years immediately preceding the date on which the transfer took place, was being used by [the assessee being an individual or his parent, or a Hindu undivided family] for agricultural purposes (hereinafter referred to as the original asset),, and the assessee has, within a period of two years after that date, purchased any other land for being used for agricultural purposes, then, instead of the capital gain being charged to 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 shall be charged under section 45 as the income of the previous year, and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be nil; or (ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be reduced, by the amount of the capital gain] (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

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ITANo.168/Ind/2023 Imran Khan 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 accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purpose of sub- section (1), the amount, if any, already utilised by the assessee for the purchase of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset: Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase of the new asset within the period specified in sub-section (1), then - the amount not so utilised 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 the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid". 28. The above provision contemplates that the benefit/exemption is available if an agriculture land is purchased out of the sale consideration of sale of agriculture land. In the instant appeal also the assessee received the sale consideration from sale of agriculture land and applied the same to purchase another piece of agriculture land in the name of self and others in the name of wife and children. The revenue authorities have also accepted the claim and allowed by Ld.CIT(A) made by the assessee for purchase of agriculture land in the name of the assessee as well as his wife.The other two remaining persons are assessee's son and daughter.We do not find any reason that why the benefit should not be given for purchase of agriculture land in the name of his son and daughter who are not someone not connected or strangers to the assessee and as held by the Hon'ble High Court that the assessee includes his legal heirs also so as to give the vide and legal interpretation. We therefore are of the view that the Ld.CIT(A) erred in denying the exemptions u/s 54B of the Act to the assessee for investment of sale consideration for purchasing agriculture land in name of his son and daughter at Rs.49,86,085/- and Rs.12,50,175/- respectively. We accordingly set aside the findings of both the lower authorities and direct the Ld. Assessing Officer to give the benefit of exemption u/s 54B of the Act Page 19 of 20

ITANo.168/Ind/2023 Imran Khan to the assessee at Rs.62,36,260/- which is over and above the benefit of Rs.91,18,190/- already allowed by Ld.CIT(A) u/s 54B of the Act. In the result the issue No.3 raised by the assessee under Ground No.2 of the appeal is allowed.

Accordingly in the facts and circumstances of the case as discussed above and in view of the binding precedent of Hon’ble jurisdictional High Court as well as other decisions cited above we allow the claim of the assessee u/s 54B of the Act.

Order pronounced in the open court on 11.01.2024.

Sd/- Sd/- (MANISH BORAD) (VIJAY PAL RAO) Accountant Member Judicial Member

Indore,_ 11 .01.2024 Patel/Sr. PS

Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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