Pr. Commissioner Of Income Tax Central, Jaipur v. Shri Manoj Bahal

1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANBENCH AT JAIPUR. D.B. Income Tax Appeal No.152/2016 Pr. Commissioner of Income Tax Central, Jaipur Vs. Shri Manoj Bahal DATE OF JUDGMENT ::: 8[th] September, 2016HON'BLE MR. JUSTICE K.S. JHAVERIHON'BLE MR. JUSTICE BANWARI LAL SHARMA Mr. Anil Mehta, for the appellant. ***** 1.By way of this appeal, the Department haschallenged the judgment & order of the Income TaxAppellate Tribunal dismissing the appeal preferred by theDepartment, confirming the order of the CIT (Appeals). 2.Learned counsel for the appellant has framed thefollowing substantial questions of law:- “1. Whether on the facts and circumstances ofthe case and in law, the ITAT is justified inallowing the deduction u/s 54F on theinvestment made in Agricultural Land which wasnot a Capital Asset u/s 2(14)?2. Whether the Tribunal was legally justified inallowing deduction u/s 54F by holding that theAgricultural Land purchased and constructionthereon would qualify for exemption of CapitalGain.” 3.Learned counsel for the appellant contended that the construction was made on the Agricultural Land therefore he is entitled for exemption u/s 54F. He furthercontented that the Tribunal has committed serious error innot granting deduction u/s 54F. 4.We have heard the learned counsel. 5.The Tribunal in para no.3 observed as under:-“Being aggrieved by the order of the AssessingOfficer, the assessee carried the matter beforethe ID CIT(A), who had allowed the appeal byobserving that the appellant had sold one plotof land for total consideration of Rs.2,52,76,000/- along with other co-owners andthe share of the appellant in this plot was for1.10 crores. The registration authority valuedthe cost of the land (share of the appellant) asper provisions of Sec. 50C for Rs.1,14,35,750/-. The appellant subsequentlypurchased one agricultural plot on 12/7/2007measuring two Bighas one Biswa at villageJaisinghpura Khor, district jaipur for Rs.45,00,000/-. The area is otherwise stated tobe in municipal limits. However, there is nodispute that such plot is of agricultural land.The appellant also deposited Rs. 75 lacs incapital gain account in Bank of Baroda withinthe stipulated and the amount waswithdrawn/utilized for construction of house onthe plot purchased earlier. The appellantaccordingly claimed to have invested Rs. 1.20crores U/s 54F of the Act. The Id CIT(A)further analysed Section 54F of the Act onpage 5 and 6 of his order. He has further heldthat the assessee had constructed a residentialhouse within stipulated period from the date oftransfer of original assets and there was nospecific condition in the Act that residentialhouse constructed on the agricultural land willnot be eligible for such deduction. He furtherrelied on the decision of Hon'ble ITAT, JaipurBench in the case of ACIT Vs Om PrakashGoyal in ITA No. 647/JP/2011 wherein it hasbeen held that house constructed onagricultural land is qualified for deduction U/s54F of the Act. He further relied on thedecision of ITAT, Jaipur Bench in the case of Shyam Sunder Makhija Vs. ITO 38 ITD 125wherein identical issue has been decided bythe Hon'ble Bench. Therefore, he allowed thededuction U/s 54 of the Act on investment ofRs. 1.20 crores.” 6.Considering the paragraph no.5, where, in earliertax appeals on the agricultural land, construction was madeand the Tribunal has followed the same decision. The saiddecision is accepted by the department and in view ofdecision of Supreme Court. This appeal also devoid ofmerits. 7.Since no substantial question of law arises in theappeal, the appeal has no merit and the same is dismissed. (Banwari Lal Sharma), J. (K.S. Jhaveri), J. Brijesh29.