HIGH COURT OF PUNJAN AND HARYANA

Commissioner of Income-tax

v.

Shri Gurnam Singh

Satish Kumar Mittal and Rakesh Kumar Garg, JJ.

IT Appeal No. 616 of 2007

April 1, 2008

Section 54B of the Income-tax Act, 1961 - Capital gains - Transfer of land used for agricultural purposes - Block period 1-4-1988 to 15-7-1998 - Assessee sold an agricultural land and purchased another agricultural land in his name and in name of his only son out of sale proceeds of said land - Assessee claimed deduction under section 54B but same was disallowed by Assessing Officer on ground that land was purchased by assessee in name of his son - Whether purchased land was being used by assessee only for agricultural purpose and merely because in sale deed his only son was also shown as co-owner, assessee could not be denied deduction under section 54B - Held, yes

FACTS

The assessee had sold an agricultural land which was being used by him for agricultural purposes. The assessee along with his son had purchased other agricultural land out of the sale proceeds of that land. The assessee claimed deduction under section 54B. The Assessing Officer disallowed the deduction on the ground that exemption from capital gains was available in case the same was invested by the assessee for the purposes of purchasing another agricultural land and not in respect of the land purchased by any other person. On appeal, the Commissioner (Appeals) allowed the same and set aside the action of the Assessing Officer. On revenue’s appeal, the Tribunal came to a finding that the assessee’s son was a bachelor and was dependent upon his father for his livelihood and dismissed the appeal holding that by registering said land in name of the son, it could not be said that the capital gains/sale proceed were in any way misused for any other purposes contrary to the provisions of law.

On appeal:

HELD

From the impugned order, no substantial question of law arose for consideration as the Tribunal while recording a pure finding of fact had dismissed the appeal of the revenue. Undisputedly, in the instant case the assessee had sold the agricultural land which was being used by him for agricultural purposes. Out of sale proceeds of the said sale, the assessee had purchased other piece of land (Land in question) in his name and in the name of his only son, who was bachelor and dependent upon him, for being used for agricultural purposes within the stipulated time. Further, it was not the case of the revenue that from the sale proceeds of the agricultural land earlier owned by the assessee, the land in question was purchased for any other purpose than the agricultural purpose. Undisputedly, the purchased land was being used by the assessee only for agricultural purpose and merely because in the sale deed his only son was also shown as co-owner, the Tribunal had rightly concluded that it did not make any difference because the purchased land was being used by the assessee for agricultural purposes. It was not the case of the revenue that the said land was being used exclusively by his son. Thus, a pure finding of fact had been recorded by the Tribunal which did not require any interference. [Para 3]

Thus, no substantial question of law arose and, therefore the appeal was to be dismissed. [Para 4]