Jile Singh Dalal v. Commissioner Of Income Tax, Faridabad

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 237 of 2011 (O&M)Date of Decision: 26.7.2011 Jile Singh Dalal Versus Commissioner of Income Tax, Faridabad ....Appellant. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL,ACTING CHIEF JUSTICE. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Aman Bansal, Advocate for the appellant. AJAY KUMAR MITTAL, J. 1.Delay in refiling condoned. 2.This order shall dispose of ITA Nos. 237 and 238 of 2011as according to the learned counsel, common questions are involvedtherein. For brevity, the facts are being taken from ITA No. 237 of 2011. 3.This appeal has been preferred by the assessee underSection 260A of the Income Tax Act, 1961 (in short “the Act”) againstthe order dated 13.8.2010 passed by the Income Tax AppellateTribunal, Delhi Bench “D”, New Delhi (hereinafter referred to as “theTribunal”) in ITA No. 1199/Del/2010 relating to the assessment year2006-07, claiming the following substantial questions of law:- “A.Whether on the facts and circumstances of the case and in law the exemption u/s 54B of the Income TaxAct, 1961 regarding capital gain investment made inthe name of assessee's wife was available to theassessee? B.Whether in view of statutory law under Section 64 ofthe Income Tax Act that the income of spouse to beclubbed with the income of individual where suchindividual has substantial interest in income, thesame principle of law should be applicable toexemption under Section 54B of the Income TaxAct?” 3.Briefly stated, the facts necessary for adjudication asnarrated in the appeal are that the assessee is an employee and noticeunder Section 142(1) of the Act dated 20.2.2007 was served upon himto file return for the assessment year 2006-07. In response thereto, theassessee filed his return on 19.3.2007 declaring an income ofRs.74,260/- which included salary income and income from othersources. Agricultural income of Rs.85,000/- was also disclosed andlong term capital gains on sale of land was shown as nil after claimingdeduction under Section 54B of the Act for purchase of agricultural landout of the sale proceeds. On 18.10.2007, notice under Section 143(2)of the Act was issued to the assessee and the assessment underSection 143(3) of the Act was completed vide order dated 1.12.2008.The Assessing Officer denied the claim of the assessee under Section54B of the Act and made addition of the equivalent amount. During theyear, the assessee sold his agricultural land held by him jointly with his brother for a total sale consideration of Rs.84,87,512/- and theassessee's share came to Rs.42,43,756/- in the land sold. Its indexcost was at Rs.1,55,512/-. The assessee purchased agricultural landjointly with his brother for Rs.53,84,000/- including stamp duty chargesand its half share i.e. Rs.26,92,400/- was claimed as deduction underSection 54B of the Act. The assessee also claimed deduction onRs.12,49,000/-, i.e. half share of the land purchased by him in the nameof his wife jointly with his sister-in-law. The Assessing Officer vide orderdated 4.12.2008 disallowed the claim of Rs.12,49,000/- under Section54B of the Act being agricultural land purchased in the name of theassessee's wife along with other expenses of Rs.67,900/- holding thatthe said amount was gifted by the assessee to his wife. The otherclaims for several expenses were also disallowed for the same reason.Feeling aggrieved, the assessee filed an appeal before theCommissioner of Income Tax (Appeals) [in short “the CIT(A)”]. The CIT(A) vide order dated 15.1.2010 allowed the appeal and directed theAssessing Officer to grant exemption under Section 54B of the Act tothe assessee. Being not satisfied, the department filed an appealbefore the Tribunal who relying upon the judgment of this Court in JaiNarayan v. ITO, [2008] 306 ITR 335 vide order dated 13.8.2010allowed the appeal.Hence, the present appeal by the assessee . 4.The point for consideration in these appeals is whether theassessee was entitled to benefit of Section 54B of the Act in respect oflong term capital gain arising from sale of land, when the assessee hadpurchased the agricultural land in the name of his wife from those saleproceeds. ITA No. 237 of 2011 5.The similar issue came up for consideration before thisCourt in Jai Narayan's case (supra), wherein this Court taking adifferent view from the Madras High Court in CIT v. Natarajan (V.)[2006] 287 ITR 271 had held that the new asset, i.e. agricultural land,which was subsequently purchased had to be in the name of theassessee and the said benefit was not admissible where the same hadnot been purchased in the name of the assessee. 6.No illegality or perversity could be pointed out by thelearned counsel for the appellant in the order passed by the Tribunalwhich may warrant interference by this Court. Therefore, this Court is ofthe opinion that no substantial question of law arises in these appeals.The same are dismissed. (AJAY KUMAR MITTAL) JUDGE July 26, 2011gbs (ADARSH KUMAR GOEL) ACTING CHIEF JUSTICE IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 238 of 2011 (O&M) Date of Decision: 26.7.2011 Jitender Singh Dalal Versus Commissioner of Income Tax, Faridabad ....Appellant. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL,ACTING CHIEF JUSTICE. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Aman Bansal, Advocate for the appellant. AJAY KUMAR MITTAL, J. Delay in refiling condoned. For orders, see ITA No. 237 of 2011 (Jile Singh Dalal v. Commissioner of Income Tax, Faridabad). (AJAY KUMAR MITTAL) JUDGE July 26, 2011gbs (ADARSH KUMAR GOEL) ACTING CHIEF JUSTICE