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2023 (5) TMI 1058 - AT - Income TaxDeduction u/s 54B - ancestral property sale - land as sold was held by assessee in the status of HUF - property the agricultural land inherited - whether the agricultural land which is the ancestral property belonging to HUF and its subsequent sale and purchase of another agricultural land by the wife is eligible for deduction or not? - HELD THAT - Investment in new capital asset as agricultural land u/s 54B was made in the name of wife of Karta as member of HUF, it is owned by the HUF and hence entitled to exemption u/s 54B of the Income Tax Act. Availability of exemption u/s 54B to HUF (the assessee being the co-parcener) or restricted to individual only - Section 54B stand amended by Finance Act, 2012, having its effect from 01.04.2013, wherein, the HUF has specifically been incorporated by replacing the word the assessee being an individual or a parents of his with the words the assessee being an individual or parents or Hindu Undivided Family for agricultural purpose in the statue w.e.f. 01.04.2013, itself. Hence the amended provisions are applicable for the computation of Income for A.Y. 2013-2014. So the by implication of the said amended law, the assessee includes the HUF. Hence, the exemption u/s 54B after amendment is available to HUF also. Hence the objections by the A.O. in this regards, that the section is not applicable to HUF misconceived. Agriculture land has been held by the assessee in the status of HUF and as the land was purchased in the name of wife of the Karta as one of the members is eligible for exemption u/s 54B of the Income Tax Act. Assessee appeal allowed.
Issues involved:
The issues involved in the judgment include the eligibility of deduction under section 54B of the Income Tax Act for the sale and purchase of agricultural land, specifically in the context of ancestral property belonging to a Hindu Undivided Family (HUF). Issue 1: Eligibility of deduction under section 54B for agricultural land sale and purchase: The appellant raised various grounds challenging the order of the Commissioner of Income Tax (Appeals) (CIT(A)) confirming the Assessment Order treating an amount as capital gain assessed in the status of an individual, instead of as HUF property. The appellant argued that the land in question was HUF property and should be assessed as such. The appellant contended that the land was inherited by the father in 1941 and later partitioned among his sons, including the appellant. The appellant's share in the HUF property was further invested in agricultural land in the name of the wife. The appellant relied on legal precedents and the hierarchy of inheritance to establish the HUF nature of the property. The Assessing Officer's reliance on a judgment regarding separate property of a father inherited by a son was deemed inapplicable to the present case. The appellant successfully argued that the amended provisions of section 54B, applicable from 01.04.2013, include HUFs, making the exemption available to them. Consequently, the Tribunal allowed both appeals of the assessee, holding that the agricultural land was held by the assessee in the status of HUF and the land purchased in the wife's name was eligible for exemption under section 54B. Separate Judgement: The judgment was delivered by Dr. B. R. R. Kumar, Accountant Member, and Sh. Yogesh Kumar US, Judicial Member.
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