The case ITA No. 5313/Del/2019 involves the appellant ITO Ward-59(3), New Delhi, contesting an order in favor of the respondent Babita Gupta, Delhi, for the assessment year 2014-15. The appeal was filed on June 10, 2019, against the order passed by the CIT(A)-37, New Delhi, dated March 25, 2019.
The Income Tax Officer (ITO) filed the appeal to contest the allowance of the exemption under Section 54B of the Income Tax Act, arguing that the conditions for exemption were not satisfied by the assessee, Babita Gupta. The main contention was that the property was not registered in the assessee’s name in the Revenue records and that the transaction was made through unregistered sale agreements and General Power of Attorney (GPA).
The appeal was heard by the Income Tax Appellate Tribunal (ITAT) Delhi Bench “A”, New Delhi, with Judicial Member Shri Challa Nagendra Prasad and Accountant Member Dr. BRR Kumar presiding over the case. The hearing took place on September 15, 2022, and the order was pronounced on October 18, 2022.
The appellant, represented by Shri Kanav Bali, Sr. DR, argued that the exemption under Section 54B was not valid as the property was not registered and the transactions were carried out through GPA, which, as per the Supreme Court ruling in the case of Suraj Lamp & Industries Pvt. Ltd. vs. State of Haryana, does not convey any title nor create any interest in an immovable property.
The respondent, Babita Gupta, represented by Shri CS Anand, CA, argued that the exemption under Section 54B was valid as the agricultural land was purchased using the sale proceeds from the previous agricultural land sold. The respondent relied on various documents including the agreement to sell, GPA, possession letter, and affidavit, and cited the judgment of the Hon’ble Delhi High Court in the case of CIT vs. Ram Gopal to support her claim.
The ITAT reviewed the facts of the case, the arguments presented by both parties, and the relevant case laws. The tribunal found that the issue under consideration had already been decided by the Hon’ble Delhi High Court in the case of CIT vs. Ram Gopal, where the court held that the acquisition of rights in property through provisional booking and GPA transactions is valid for claiming exemption under Section 54B.
The tribunal referenced several key judgments, including:
The ITAT upheld the decision of the CIT(A), agreeing that the exemption under Section 54B was valid as the acquisition of the new agricultural land was genuine and met the criteria outlined in the Income Tax Act. The tribunal found that the facts of the case and the cited judgments supported the respondent’s claim.
Order pronounced in the open court on October 18, 2022.
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