CHOWARAM BAGHEL Vs. PRINCIPAL COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The appeal was admitted on the following substantial question of law : Whether the Income Tax Appellate Tribunal (ITAT) was justified in holding that the deduction under Sec. 54B (sic 54-A) of the Act of 1961 cannot be allowed to the assessee/appellant since the investment in purchase of new agricultural land was made by the assessee not in his own name, but in the name of his wife?

(2.) Facts of the case, in brief, are that the appellant sold agricultural land to M/s Golden Bricks Infrastructure Pvt. Ltd., on which long term capital gains was assessed at Rs.66,66,284.00 and which was finally determined at Rs.36,66,284.00 by the CIT (Appeals), Raipur, deleting addition of Rs.30,00,000.00. The ITAT, Raipur Bench has upheld the determination of long term capital gains at Rs.36,66,284.00. According to the appellant, out of the sale proceeds of the assessee purchased agricultural lands as under :

(3.) Since the Assessing Officer determined the long term capital gains arising out of sale proceeds of urban agricultural land at Rs.66,66,284.00 and did not allow deduction under Sec. 54B of the Income Tax Act, 1961 (for short 'the IT Act') in respect of investments made in purchase of agricultural lands in the name of his wife. The assessee filed an appeal before the CIT (A) and the CIT (A), after perusal of the evidence, accepted the contention that the land was sold for Rs.45,80,000.00 and Rs.30,00,000.00 was received as gift from father-in-law Sant Ram Chaturvedani in cash, which was deposited in the bank account. The CIT (A) allowed exemption under Sec. 54B for an amount of Rs.9,90,300.00 and Rs.8,62,600.00 invested in the name of wife. The same was subject of challenge before the ITAT by Revenue. The ITAT annulled the deduction under Sec. 54B of the IT Act on the ground that the exemption could have been allowed only if the investment is made by the assessee in his own name and since the investment was made in the name of wife, son, father, etc. did not allow the deduction of Rs.9,90,300.00 and Rs.8,62,600.00 under Sec. 54B and set aside the order of the CIT (A) and restored back the order of the Assessing Officer on this point. The same was subject of challenge before this Court. This Court admitted the appeal on the substantial question of law, as quoted supra.