No deduction u/s 54B if Assessee purchases agricultural land in his son & daughter-in-laws name

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HIGH COURT OF RAJASTHAN

Kalya v. Commissioner of Income-tax

D.B. IT APPEAL NO. 112 OF 2012

D.B. civil misc. stay application no. 1180 of 2012

Date of Pronouncement – 19.05.2012

It is noticed that the appellant-assess sold the agricultural land, which was mutated in his name, for a sale consideration of Rs. 1,61,09,100/-. Thereafter out of the selling price, the appellant-assessee purchased land in the name of his son and daughter-in-law for a total consideration of Rs. 1,22,71,440/-. It is relevant to note that the land sold was in the name of appellant-assessee, while the land purchased was in the name of his son and daughter-in-law.7. A bare reading of Section 54B of the Income Tax Act does not suggest that assessee would be entitled to get exemption for the land purchased by him in the name of his son and daughter-in-law.

Secondly, the word “assessee” used in the Income Tax Act needs to be given a ‘legal interpretation’ and not a ‘liberal interpretation’, as contended by the learned counsel for the appellant. If the word ‘assessee’ is given a liberal interpretation, it would be tantamount to giving a free hand to the assessee and his legal heirs and it shall curtail the revenue of the Government, which the law does not permit.

The Income Tax Appellate Tribunal, having considered all the facts and circumstances of the case, is found to have rightly disallowed the exemption under Section 54B of the Act.