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TMI Blog2015 (9) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Ld. Assessing Officer in denying exemption u/s.54B of the Act for Rs. 2,92,140/- with regard to investments in agricultural land made in the name of assessee's son. ii) The Ld. CIT(A) has erred in sustaining the action of the Ld. Assessing Officer in denying exemption u/s.54F of the Act in regard to construction of the building in the land purchased at Vallingadu by holding that only extension to the existing building has been carried out. iii) The Ld. Assessing Officer has erred in levying interest u/s.234A & 234C of the Act. 3. The brief facts of the case are that the assessee is an individual, filed his return of income for the assessment year 2009-10 on 31.03.2011 U/s.139(4) of the Act admitting income of Rs. 2,79,057/-and agricultural income of Rs. 61,000/-. Subsequently it was learnt that the assessee had sold land for Rs. 6,90,00,000/- which was not disclosed in his return of income. Thereafter, notice U/s.148 of the Act was issued and the assessee filed his return of income on 26.12.2011 admitting long term capital gain of Rs. 3,03,07,540/-. Finally the assessment was completed U/s.143(3) r. W. S 147 of the Act on 13.02.2013 wherein the ld. Assessing Officer disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed remittance of cash amounting to Rs. 1,00,00,000/- on 13.8.2008. Since the earliest credit for the assessee is only on 16.8.2008, to verify the source for payment made by the assessee on 13.8.2008, summon u/s.131 was served on the assessee and a sworn statement recorded from him on 8.2.2013. When assessee was requested to furnish the source for the above cash payment of Rs. 1,00,00,000/- made on 13.8.2008,assessee agreed to offer the above Rs. 1,00,00,000/- as his income. Subsequently assessee appeared on 13.2.2013 and filed a letter stating as below: "The amount of Rs. 1.00 Crore paid to shri. Seethapathy Naidu on 13.8.2008 was received as cash advance for sale of our land to Shri.Kumaresan. After credit of the sale proceeds frorn Shri.Kumaresan in our bank account, this Rs. 1.00 Crore was withdrawn from our bank accounts and the same was returned back to Shri.Kumaresan. But we do not have any proof" It is seen that no proof has been furnished for the source of above mentioned Rs. 1 ,00,00,000/- Hence this amount is brought to tax now. In addition to the above mentioned Rs. 1,00,00,000/-, interest income credited in Shri.M. Ramalingam's Tamilnadu Mercantile Bank account amounti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer has also not made any finding with respect to the other activities of the assessee for earning income from any other source. Moreover it is a common practice to accept on-money on real estate transactions. Therefore, we do not find it necessary to interfere with the order of the Ld. CIT (A) on this count. Cross Objections. 5.1 Ground No.1 - Denial of exemption u/s.54B of the Act for Rs. 2,92,140/- with regard to investments in agricultural land made in the name of the assessee's son. The Ld. Assessing Officer denied deduction U/s.54B of the Act for Rs. 2,92,140/- because the investment in agricultural land was not made in the assessee's name, but made in the name of his son. Before the Ld. CIT (A), the assessee had explained that the land sold was jointly owned by his son and his daughter and therefore, they had received Rs. 2,30,00,000/- each aggregating to Rs. 6,90,00,000/-being the total sale consideration of the land sold. However, the Ld. CIT (A) came to a conclusion that during course of appellate proceedings the assessee could not furnish any evidence to show that the property was jointly owned by the appellant, his son and his daughter and therefore, upheld the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are entitled to the property inherited by the assessee from his father's HUF. Since the existence of the HUF cannot be denied who owned the land sold, the assessment made in the hands of the assessee in the individual capacity is bad in law. Moreover as per section 171 of the Act, partial partition is not recognized for the purpose of assessment under the provisions of the Act. Hence it is apparent that the Revenue has assessed the assessee as "individual" wrongly for the sale of land owned by the assessee's HUF. Therefore we hereby quash the order of the Ld. A.O. Further we make it clear that the Revenue is at liberty to assess the assessee's HUF subject to complying with provisions of limitations stipulated in the Act and in accordance with our decision in this order on various issues raised by both the parties. We also make it clear that while assessing the assessee's HUF, the HUF assessee shall be entitled to the benefit u/s.54B of the Act for Rs. 2,92,140/- with regard to investments in agricultural land made in the name of assessee's son because property of a HUF can be legally held by any of the coparceners or Kartha of the HUF and in the instant case the assessee's son is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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