Capital Gain Exemption u/s 54 B is not permissible on Investment made in Name of Grandson: ITAT [Read Order]

Capital Gain Exemption u/s 54 B is not permissible on the investment made in name of the grandson, the Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) has held as above.

In response to the notice under section 148 issued in the name of Shri Daljit Singh in the capacity of the Legal Heir of the Late Shri Ajmer Singh, a return of income was filed by Shri Daljit Singh on 22/06/2017 declaring a total income of Rs. 1,54,376/-.

Late Shri Ajmer Singh had sold certain agricultural land to M/s Bajwa Developers for a consideration of Rs. 11,62,500/- on which capital gain has been worked out at Rs. 10,04,500/- and thereafter purchased another agricultural land in the name of his grandson Shri Daljit Singh, for which the deduction under section 54B of the Act was claimed.  The assessing officer not allowed the deduction claimed under section 54B and capital gain worked out at Rs.10,04,500/- was brought to tax.  

In light of precedents, CIT(A) held that the land was purchased in the name of the grandson of the assessee and no document has been provided to show that the consideration for the said purchase was paid by the assessee. Further held that the purchase of the asset in the name of any other person including the grandson of the assessee will not qualify for the deduction and confirmed the findings of the AO.

Shri. Vikram Singh Yadav, AM observed that both the transaction of sale of agriculture land and the subsequent transaction of purchase of another piece of agriculture land was undertaken by the deceased assessee himself during his lifetime and on account of the death of the assessee, the legal heir was brought on record and proceedings were subsequently initiated in the hands of the legal heir, the grandson of the assessee. 

The bench held that “the authorities below were justified in making the assessee not eligible to exemption u/s 54B of the Act where the investment is made in the name of the grandson of the assessee. “ 

The appeal of the Assessee got dismissed. Smt. Komal Thakur, Advocate appeared for the assessee and Smt. Amanpreet Kaur appeared for the revenue.

To Read the full text of the Order CLICK HERE

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