No Capital Gain Exemption On The Agriculture Land Purchased In The Name Of Assessee's Wife: ITAT

The assessee filed a return declaring an income. The case was assessed by computing the capital gains. The assessee claimed a deduction under section 54B of the Income Tax Act, 1961. The assessee has purchased four properties in the name of the assessee's wife.

The issue raised was whether the properties purchased by the assessee in the name of the assessee's wife are eligible for deduction under section 54B or not.

The ITAT relied on the decision of the Supreme Court in the case of Commissioner of Customs (Imports) vs. Dilip Kumar. It was held that while giving benefit to the assessee, the provision needs to be interpreted strictly. If there is ambiguity, the assessee cannot claim the benefit of ambiguity, and it must be interpreted in favour of the department.

The ITAT observed that the word "assessee" occurring in section 54B must be interpreted in such a manner as to accord with the context and subject of its usage. A reading of section 54B nowhere suggests that the Legislature intended to advance the benefit of the section to an assessee who purchased the agricultural land, even in the name of a third person. Wherever the Legislature intended it to be so, it specifically provided under the provision. The term "assessee" is qualified by the expression "purchased any other land for the purpose of being used for agricultural purposes." It necessarily means that the new asset which is purchased has to be in the name of the assessee himself to seek exemption under section 54B of the Act. The purchase of agricultural land by the assessee in a third person's name cannot be held entitled to exemption under section 54B.

The tribunal dismissed the appeal of the assessee and disallowed the claim of deduction under section 54B with regard to the agricultural land.

Case Title: Karamvir Versus Income Tax Officer, Ward-2(2)

Citation: ITA No. 2023/Del/2017

Dated: 06.07.2022

Counsel For Appellant: None

Counsel For Respondent: Sr. DR Bhagwati Charan

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