1994 (9) TMI 22 - HC - Income Tax

Summary

Issues involved: Interpretation of exemption under section 54B of the Income-tax Act, 1961 for a Hindu undivided family.

Summary:
The High Court of MADRAS considered a case where the Department questioned the entitlement of a Hindu undivided family to exemption under section 54B of the Income-tax Act, 1961. The assessee, a Hindu undivided family, sold agricultural lands and purchased new ones. The Income-tax Officer denied the exemption under section 54B, but the Appellate Assistant Commissioner and the Appellate Tribunal allowed it. The Department cited a previous decision of the Madras High Court to argue that the exemption is only available to individuals, not Hindu undivided families. The High Court, in line with the cited decision, ruled against the assessee, stating that the exemption under section 54B is not applicable to Hindu undivided families. The question was answered in the negative, favoring the Department.