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TMI Blog2017 (3) TMI 1175X X X X Extracts X X X X X X X X Extracts X X X X ..... urchase of a property in the name of any one of the coparcener, the property belongs to the HUF, even though the property was registered in the individual name of one of the coparcener. The property belongs to all the coparceners in equal shares as members of HUF. Therefore, the Assessing Officer is not justified in rejecting the claim of the assessee especially, when the investment was made in the name of Karta of HUF. Only the borrowed funds are used for purchase of new asset - Held that:- Provisions of Section 54F of the Act, requires the assessee to purchase a property one year before the date of the sale or two years after the date of the sale of asset. If the assessee could not invest within the time frame provided in the Act, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee has to necessarily obtain the planning permission and building approval in case there was new construction or an additional construction over and above the existing building. In the case before us, it is not the case of the assessee that there was additional construction or new construction. The admitted case of the assessee that the existing building was made it fit for human habitation. Therefore Assessing Officer is not justified in disallowing the claim of the assessee. - Assessee appeal allowed. - ITA No. 2974/Mds/2016 - - - Dated:- 31-1-2017 - SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER For The Appellant : Shri K. Balasubramanian, CA For The Respondent : Shri B. Sahadevan, JCIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were utilized for purchasing the new asset. The Assessing Officer has also disallowed the expenditure incurred by the assessee for renovation. Referring to the first issue of disallowance, namely purchase of property in the individual name of the Karta, the Ld. representative for the assessee submitted that the Bangalore bench of this Tribunal in ITO v Ramesh Kumar (HUF) in ITA No.628/Bang/2010 examined this issue and found that a Karta of HUF or a coparcener of HUF can hold a property on behalf of the HUF. Placing reliance on the judgment of Karnataka High Court in DIT v Mrs. Jennifer Bhide [2011] 15 taxmann.com 82 (Kar.), the Ld.representative submitted that the Karnataka High Court found that there was no requirement that the investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one year from the date of sale of the capital asset cannot be a reason for disallowing the claim of the assessee. 4. On the contrary, Shri B. Sahadevan, the Ld. Departmental Representative submitted that the diamond said to be belonging to HUF. According to the Ld. D.R., the HUF is an independent assessable unit. Shri Puranchand is an individual and assessable as such in his individual capacity. Therefore, when the diamond belongs to HUF, the capital gain has to be assessed only in the hands of HUF. Therefore, for the purpose of claiming exemption under Section 54F of the Act, the investment has to be made only in the hands of HUF and not in the individual name of Puranchand. Hence, the Assessing Officer has rightly rejected the claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e coparceners. Therefore, when the assessee HUF invested the funds in the name of any one of the coparcener, it has to be construed that the investment was made in the name of HUF. When the nucleus of the HUF fund was used for purchase of a property in the name of any one of the coparcener, the property belongs to the HUF, even though the property was registered in the individual name of one of the coparcener. The property belongs to all the coparceners in equal shares as members of HUF. Therefore, the Assessing Officer is not justified in rejecting the claim of the assessee especially, when the investment was made in the name of Karta of HUF. 8. Now coming to second reason for disallowance of claim of the assessee, the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... building. Therefore, it is not a case of new construction. The assessee claims that the building was renovated to make it fit for human habitation after purchase. This Tribunal is of the considered opinion, when the assessee has purchased a building and made some investment for making it fit for human habitation, the same has to be treated as part of the investment from out of the capital gain and the Assessing Officer is not justified in rejecting the claim of the assessee on the ground that the assessee has not filed any proof / plan from the Corporation of Chennai. For the purpose of renovation and maintenance, the Corporation may not give any approval or planning permission. The assessee has to necessarily obtain the planning permissio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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