2010 (10) TMI 1060 - AT - Income Tax

Summary

Issues involved: Appeal by Revenue against order of ld. CIT(Appeals) u/s. 143(3) of the I.T. Act for A.Y. 2004-05, focusing on granting exemption u/s. 54 of the I.T. Act on property investment made in the name of a member of the HUF.

Summary:
1. The Revenue appealed against the order of ld. CIT(Appeals) regarding exemption u/s. 54 of the I.T. Act on property investment in the name of a HUF member.
2. The assessee-HUF declared income for A.Y. 2004-05, with scrutiny revealing sale of a property by the HUF's Karta and subsequent purchase in the name of his wife.
3. Ld. AO insisted that for exemption u/s. 54, the property should be in the name of the assessee as Karta, citing relevant case law.
4. Ld. CIT(Appeals) noted property details, rent, and tax payments by the HUF, concluding that denial of exemption was incorrect based on differing facts from the cited case.
5. Ld. DR supported ld. AO's decision, citing similarity in facts with the case law, while Ld. AR argued for exemption based on HUF property ownership principles.
6. Tribunal explained HUF property ownership under Hindu Law, recognizing the joint ownership by all members, leading to upholding ld. CIT(Appeals) decision on exemption.

This judgment clarifies the eligibility for exemption u/s. 54 of the I.T. Act concerning property investments made in the name of HUF members, emphasizing the collective ownership nature of HUF property and the distinct status of HUF for tax purposes.