SHRI DEVENTRASHUKLA,UJJAIN vs. ITO-1(1), UJJAIN

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ITA 282/IND/2020Status: DisposedITAT Indore14 October 2022AY 2012-134 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the intention of the legislature is to prevent misuse of capital gains, and whether the investment is in the assessee's name or a family member's name is not the primary factor. The key is the proper utilization of funds within the prescribed time.

What were the facts?

The assessee claimed exemption under Section 54B of the Income Tax Act for the sale of land. However, the land was purchased in the name of the assessee's daughter-in-law, not directly in the assessee's name. The authorities below rejected the claim on this basis.

What were the issues?

Whether the claim for capital gains exemption under Section 54B (or 54F as discussed in the judgment) is admissible when the property is purchased in the name of a daughter-in-law, with investment made by the assessee from sale proceeds.

Which sections of the Income-tax Act were involved?

Section 54B,Section 54F,Section 144,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: Ms. MADHUMITA ROY & SHRI BHAGIRATH MAL BIYANI

For Appellant: Ms. Ruchira Negi, A.R, Shri Ashish Porwal, Sr.D.R
Pronounced: 14.10.2022

The instant appeal filed by the assessee is directed against the order dated 15.07.2020 passed by the Ld. Commissioner of Income Tax (Appeals), Ujjain (in short ‘CIT(A)’), arising out of the order dated 16.12.2016 passed by the Income Tax Officer-1(1), Ujjain under section 144/147 of the Income Tax Act, 1961 (hereinafter referred as to ‘the Act’) for Assessment Year 2013-14.

2.

The issue in dispute in this matter is this that the sale of land purchased by the party is not the assessee but the daughter-in-law of the assessee whereas the investment has been done by the assessee in the name of said daughter-in-law. Since, the purchase was not made in the name of the assessee, the claim of Section 54B of the Act has been rejected by the authorities below. Hence, the instant appeal before us.

(Shri Devendra Shukla vs. ITO) Asst.Year.– 2013-14 - 2 - 3. The Ld. Counsel appearing for the assessee Ms. Ruchira Negi vehemently argued in support of the case made by the assessee.

4. The deed of purchase in the name of the daughter-in-law was executed on 27.09.2012, along with other co-sharers. The same has been annexed with the paper book filed before us which further establishes such fact. In support of the contention made by the assessee that as the investment has been made by the assessee by the sale proceeds in respect of earlier transaction being sale of land by the assessee though it is not in the name of assessee rather in the name of daughter-in-law, the assessee is still entitled to the relevant claim under Section 54F of the Act, the Ld.AR has relied upon the judgment passed by the Hon’ble Madhya Pradesh High Court in the case of PCIT vs. Balmukund Meena, reported in 31 TTJ 398 which was also considered by the Ld.CIT(A) in his order impugned before us. In that particular case, the assessee was not the purchaser rather it was purchased in the name of his son as ‘co-owner’. However, the Hon’ble Court finally allowed the relevant claim under Section 54F of the Act on the proposition that the property needs not to be purchased in the name of the assessee neither necessary to be purchased exclusively in his name. Taking into consideration that the property in question, in that matter, was not purchased in the name of any stranger rather than the family member and when there was no dispute with the entire investment has come out of the sale proceeds the claim under Section 54F of the Act has been allowed by the Hon’ble Court.

4.

The Ld.DR vehemently argued in support of the orders passed by the authorities below. He further relied upon the judgment passed by the Hon’ble Madhya Pradesh PCIT vs. Balmukund Meena (supra) on this count that in that matter the assessee was one of the co-owners whereas in the present appeal, the assessee’s name is not at all appearing as one of the purchasers of the property in question. We note that in both Sections 54B & 54F of the Act, the intention of the legislature is not to misuse the capital gain earned by the assessee; whether the investment has been made in the name of the assessee or any of the family members is not a factor rather whether the amount has been utilized in its proper (Shri Devendra Shukla vs. ITO) Asst.Year.– 2013-14 - 3 - perspective and that too within the prescribed time limit as per statutory provision envisaged under the Act is required to be considered. Therefore, the moot point before us to be considered is as to whether in the present facts and circumstances of the case when the property has been purchased in the name of the daughter-in-law instead of his own name, the claim under Section 54F of the Act is to be decided in favour of the assessee or not. As we have already discussed about the intention of the legislature and the order passed by the Hon’ble Madhya Pradesh High Court, have no doubt to have positive view in regard to the claim of the assessee made under S.54F of the Act keeping in view of the particular fact that the investment has been made by the assessee before us in the property in the name of daughter-in-law by the sale proceeds of earlier transaction and that too has been invested within the period of limitation as prescribed under this statute, we find that the assessee is entitled to the relief claimed for. The addition made by the authorities below, thus, cannot be said to be justified and hence, deleted. The appeal preferred by the assessee is, therefore, allowed.

5.

In the result, assessee’s appeal is allowed

This Order pronounced on 14 /10/2022

Sd/- Sd/- (BHAGIRATH MAL BIYANI) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Indore; Dated 14/10/2022 S. K. Sinha, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)- 5. �वभागीय ��त�न�ध, / DR, ITAT, Indore 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,

(Sr. Private Secretary) ITAT, Indore (Shri Devendra Shukla vs. ITO) Asst.Year.– 2013-14 - 4 - 1.Date of dictation on 26.09.2022 2.Date on which the typed draft is placed before the Dictating Member 10.10.2022 3.Date on which the approved draft comes to the Sr.P.S./P.S. 4.Date on which the fair order is placed before the Dictating Member for pronouncement 5.Date on which the fair order comes back to the Sr.P.S./P.S 6.Date on which the file goes to the Bench Clerk 7.Date on which the file goes to the Head Clerk…………. 8.The date on which the file goes to the Asstt. Registrar for signature on the order…………………… 9.Date of Despatch of the Order………Date on which the typed draft is placed before the Dictating Member 19.12.2019 1. Other Member………………Date on which the approved draft comes to

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