9911796707
TMI Blog2015 (10) TMI 2043X X X X Extracts X X X X X X X X Extracts X X X X ..... ocessing of income tax return filed by the assessee u/s 143(1) of the I. T. Act, 1961 (for short 'Act'), declaring income of Rs. 1,48,370/-, the case was put under scrutiny under CASS. Mrs. Ruchika Jain, CA appeared and filed necessary documents / details. Assessee has shown rental income of Rs. 92,000/- from capital bearing number A-955, Sushant Lok, Phase I, Gurgaon, 30% deduction of Rs. 27,600/- and claimed deduction of Rs. 1.50 lacs as interest paid on borrowed funds for the purchase of property. 3. The assessee has also shown income from long term capital gain on sale of residential property of Rs. 21,81,250/- and long term capital gain on sale of shares of Rs. 23,58,078/-, assessee has claimed exemption u/s 54 of the Act of Rs. 21,81,250/- and exemption u/s 54F of the Act of Rs. 23,58,078/- and shown total taxable capital gain as 'nil'. The assessee, M/s Sunil Arora (HUF) has earned long term capital gain of Rs. 21,81,250/- plus Rs. 23,58,078/- total amounting to Rs. 43,39,328/- and claimed exemption u/s 54 and 54F of the Act, which was disallowed and added to his income because the assessee has neither purchased any residential property in its own name, nor constructed any r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the judgment of the Hon'ble Delhi High Court cited as Vipin Malik (HUF) Vs CIT in I.T.A.No. 1241/2007 dated 7th August 2009 and the judgement of the Hon'ble High Corut of Rajasthan at Jaipur Bench, Jaipur in the case of Shri Kalya Vs CIT and others in I.T.A.No. 112/2012 dated 19th May 2012. Para 9 of the judgement of Vipin Malik is reproduced as under for ready reference: "9. Independent of the above discussion, an aspect which overrides the above issue, is that, the agricultural land which was sold was of Vipin Malik HUF and the flat purchased in the co-operative society was not in the name of the HUF. The flat was in the individual name of Vipin Malik along with his mother in ITA No.1241/2007 Page 6 Chanan Devi Sachdeva. To claim the benefit of Section 54-F the residential house which is purchased or constructed has to be of the same assessee whose agricultural land is sold and which is therefore not the case here. The following paragraph 12 of the order of the I.T.A.T effectively and exhaustively sets out these facts and we reproduce the same below:- " 12. We have considered the rival submissions and also perused the relevant material on record. It is observed that the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gain are issued in the name of two individuals without there being any mention of HUF. Page 13 is the ledger account extract from the books of the society for the period 1.4.96 to 31.3.97 with a title of account being "Chanan Devi Sachdeva and Vipin 237" which again goes to show that the membership was stated to be held jointly by the said individuals without there being any indication of HUF. The only document which contains the name of HUF with reference to Shri Vipin Malik as Karta of HUF is a possession certificate issued by the society on 30.4.2000 and a perusal of the copy of the said certificate placed at page No.16 of the assesseea s paper book shows that the words "(KARTA), M/S VIPIN MALIK-HUF" are written in capital letters against the name of Shri Vipin Malik which appears in small letters. Even the manner in which the said words are written in the said certificate shows that the same are apparently added/inserted afterwards. Having regard to this patent anomaly apparent from the said certificate as well as keeping in view the fact that all the letters, certificates and receipts issued by the said society earlier did not contain any reference to HUF, we find it difficult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... K. Bhaya, 95 ITD 313 (Mum. ITAT), iii) ITO Vs Ramesh Kumar (HUF) in I.T.A. No. 628/Bang./2010, iv) CIT Vs Natarajan, 154 Taxman 399 (Mad.) v) DIT (International Taxation) Bangalore Vs Mrs. Jennifer Bhide, 15 Taxman.com 82 (Kar.) and vi) Hira Lal aRam Dayal Vs CIT 122 ITSR 461 (P&H) 12. However, in view of the undisputed facts and circumstances of this case and judgements relied upon and submissions made by both the authorized representatives of the parties, we are of the considered view that the impugned order is not sustainable in the eyes of law, hence, liable to be set aside for the following reasons: i) that the facts of this case are squarely covered by the judgement of Vipin Malik (HUF) (supra) delivered by the Hon'ble Jurisdictional High Court wherein it has been categorically held that when the property is not purchased with the sale proceeds of HUF property in the name of HUF itself, the assessee is not entitled for benefit of exemption u/s 54F of the Act. Since in the instant case the property was also not purchased with the sale proceeds of HUF property, the assessee is not entitled for benefit u/s 54F of the Act. ii) that since Shri Sunil Arora and Mrs. Vaish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k property being their individual liability and other members of Sunil Arora (HUF) are neither liable to pay the loan nor they are entitled to get any benefit out of the property in question. ix) that the intention of legislature to legislate Section 54 and 54F is to ensure the reinvestment of funds in residential property by the assessee itself. But in the instant case, basic condition to get the benefit of Section 54 and 54F has not been complied with as the funds raised from the sale proceeds of HUF property have been invested by the members to purchase the property in their individual names, which does not fall in the category of assessee i.e. Sunil Arora (HUF). x) that the impugned order has been passed by Ld. CIT(A) in mechanical manner by ignoring the law laid down by Hon'ble Jurisdictional High Court in the case of Vipin Malik (supra). xi) that since the assessee has failed to invest the capital gain in hands received form sale proceeds of HUF property as required u/s 54 and 54F of the Act, in the name of assessee itself, the assessee is not entitled for any tax benefit for the property purchased in the name of individuals as claimed by the assessee in this case. 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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