By K. B. Bhujle, Advocate
New Page 2
37 Capital gains : Exemption u/s.54B of
Income-tax Act, 1961 : B. P. 1-4-1988 to 15-7-1998 : Sale of agricultural land
and out of sale proceeds, purchase of agricultural land in his name and in the
name of his only son : Exemption u/s.54B allowable.
[CIT v. Gurnam Singh, 170 Taxman 160 (P&H)]
In the relevant period, the assessee had sold agricultural
land and out of the sale proceeds, the assessee, along with his son, had
purchased another agricultural land and claimed deduction u/s.54B of the
Income-tax Act, 1961. The Assessing Officer disallowed the claim on the ground
that exemption from capital gains was available only in case the sale proceed
was invested by the assessee for purchasing another agricultural land and not in
respect of the land purchased by any other person. The Tribunal allowed the
assessee’s claim.
On appeal by the Revenue, the Punjab and Haryana High Court
upheld the decision of the Tribunal and held as under :
“Undisputedly, the assessee had sold the agricultural land
which was being used by him for agricultural purposes. Out of its sale
proceeds, the assessee had purchased another piece of land in his name and in
the name of his only son, who was a bachelor and was dependent upon him, for
being used for agricultural purposes within the stipulated time. Undisputedly,
the purchased land was being used by the assessee only for agricultural
purposes and merely because in the sale deed his only son was also shown as
co-owner, it did not make any difference, because the purchased land was still
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.”
