RAVINDER KUMAR,MEERUT CANTT. vs. ITO, WARD-2(2), MEERUT

The grounds of appeal filed by assessee, which reads as under: 1. “That the ld. Commissioner of Income Tax (Appeals) is erred in law and otherwise on facts and circumstances of the case while holding and denying to allow benefit of section 54B being the entire consideration received in sale of agricultural land (original assets) and invested the same in purchase of another agriculture land, certainly in the name of assessee's spouse whereas section 54B does not debar the 'Assessee/Appellant' to not to purchase the property in name of any of his/her family member. The ld. CIT (Appeals) did not appreciate the facts the spouse of assessee is an illiterate lady had no income and it is established facts the land was purchased only out of fund received on sale of original assets.

Brief facts of the case are that in this case, the assessee has sold agricultural land wherein Long Term Capital Gain (LTCG) came to Rs.12,78,456/-. Assessee claimed that he has purchased land and under section 54B, the Long Term Capital Gain is to be exempt. However, the AO denied the same as he noted that the said land is purchased in the wife’s name. Hence, the AO denied the claim of deduction under section 54B of the Act.

Against the above order, assessee appealed before the CIT(A). The learned CIT(A) referred to several case laws and confirmed the order of AO. Against this, assessee is in appeal before the ITAT.

At the outset, the learned Counsel for the assessee referred the decision of Ashok Kumar vs. ITO in for A.Y. 2009-10 vide order dated 28.12.2022.

Learned DR on the other hand, referred to the dismissal of SLP by Hon’ble Supreme Court in the case of Bahadur Singh vs. CIT(A) [2023] 154

We have heard both the parties and perused the material on record. We note that ITAT in the case of Ashok Kumar vs. ITO (supra) has held as under: “6. Before me, learned counsel appearing for the assessee submitted that investment in purchase of agricultural land in the name of wife would also be eligible for deduction under Section 54B of the Act. In support of such contention, learned counsel for the assessee relied upon the following decisions:

We further note that in the decision relied upon by the Learned Departmental Representative, it was a dismissal of SLP simpliciter by Hon’ble Apex Court against the decision of Hon’ble Punjab & Haryana High Court. We note that dismissal of SLP simpliciter by Hon’ble Supreme Court does not merge the order of Hon’ble High Court with that of Hon’ble Supreme Court. We note that there is no jurisdictional High Court decision on this issue. Further, in case of conflicting, Hon’ble High Court decision one in favour of assessee has to be adopted as per Hon’ble Supreme Court decision in vegetable products. Accordingly, we follow the precedent relied upon by the assessee which also draws support from Hon’ble High Court decisions referred therein. Hence, we set aside the order of the Revenue authorities and decide the issue in favour of the assessee.

In the result, the appeal of the assessee stands allowed.