Charan Kaur, Amritsar. vs Department Of Income Tax

This is Revenue's appeal for the assessment year 2009-10 against the

order dated 10/03/2014 passed by the CIT(A), Amritsar. The issue in this

appeal is as to whether the ld. CIT(A) was correct in holding that deduction

u/s 54 of the I.T. Act was allowable, investment having been made in the

name of one of the members of HUF.

2. During the year, the assessee had sold joint property of her husband

Sh. Manjit Singh, received by him through inheritance, for Rs.17.50 lacs and 2 ITA No.362(Asr0/2014

a new property was purchased in the name of Miss. Rupa Kalsi D/o Sh.

Manjit Singh. Exemption was claimed u/s 54 of the Act. The AO rejected

the exemption claimed, observing that the transaction was to be treated as a

gift and sale of joint property was to be taxed as capital gain. The ld.

CIT(A) allowed the assessee's appeal.

3. The grievance of the department is that the claim u/s 54 of the Act

was made by the assessee in her individual capacity and that the HUF,

having not filed any return of income, did not claim any deduction u/s 54 of

the Act.

4. We have heard the rival contentions and have perused the material

available on record. We do not find any error in the order of the ld. CIT(A).

As noted, in the assessment order, no reason has been given concerning

taxability of the income in the hands of the assessee as individual, despite

the fact that the property undisputedly belonged to the HUF of the husband

of the assessee, having been received by way of inheritance. Rather, this

fact has been admitted by the AO in the assessment order itself. Thus, it was

the property of the HUF of the husband of the assessee. That being so, as

rightly been held by the ld. CIT(A), it cannot be assessed in the hands of the

individual.

3 ITA No.362(Asr0/2014

4.1. The proceeds from the sale of the foresaid property of the HUF of the

husband of the assessee were invested in the purchase of another property.

This property was in the name of the one of the beneficiaries of the HUF. A

view to this effect has been taken by the Mumbai Bench of the Tribunal in

the case of 'Income Tax Officer , Ward 13(2)(3), Mumbai vs. Arvind T.

Thakkar' in ITA No.7338/Mum/2005, dated 29.04.2011, which decision has

rightly been taken into consideration by the ld. CIT(A).

5. In view of the above, the order of the ld. CIT(A) is found to be well

versed and is hereby confirmed, rejecting the grievance sought to be raised

by the Department before us.

6. In the result, the appeal filed by the Revenue is dismissed.

Order pronounced in the open court on March, 2015.

Sd/- Sd/- (B.P. JAIN) (A.D.JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: March, 2015 /SKR/ Pronounced on 27/03/2015 Sd/- JM Copy of the order forwarded to:

1. The Assessee:Smt. Charan Kaur, New Delhi

2. The ITO Ward 3(1), Asr, Asr..

3. The CIT(A), Asr.

4. The CIT

5. The SR DR, ITAT, Amritsar.

True copy By order (Assistant Registrar) Income Tax Appellate Tribunal, Amritsar Bench: Amritsar.