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TMI Blog2020 (3) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... ence of finding of partition u/s. 171 of the Act. Ld. CIT (A) ought to have held that as per amended sec. 6 of Hindu Succession Act a notional partition is deemed to have taken place immediately before the death of a Mitakshara Coparcener. 3. Ld. CIT (A) erred in law and on facts in confirming action of AO taxing capital gain in the hands of appellant HUF ignoring amendment to sec. 6 of Hindu Succession Act according to which HUF ceased to exist on death of a coparcener. Ld. CIT (A) ought to have held that surplus on sale was correctly offered by assessee in HUF capacity and individual capacity. 4. Ld. CIT (A) erred in law and on facts in not taking into consideration contention raised vide ground # 3 that addition of Rs. 34, 650/-, interest of Rs. 1, 63, 141/- & long term capital gain of Rs. 2, 97, 99, 988/- pertaining to 1/2 share of property in ownership of the individual not be sustained in the hands of appellant HUF since income and interest earned on ½ share offered in individual capacity in earlier years was not disturbed. 5. Ld. CIT (A) erred in law and on facts dismissing alternatively to allow exemption u/s. 54 & 54EC claimed by individual of investment made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cable on the facts of this case, and the matter rests there. The Assessing Officer referred to the provisions of Section 171, specially to sub section 9 thereof, to highlight the fact that any partial partition of the HUF, after 31st December 1978, cannot be recognized for the purposes of the Income-tax Act, 1961. A reference was then made to Hon'ble Supreme Court's judgment in the case of ACIT Vs Venugopal Irani (239 ITR 514) in support of the proposition that whatever may be the position under the Hindu law, section 171 has to apply for the income tax purposes. A reference was also made to Hon'ble Supreme Court's judgment in the case of State of Maharshtra Vs Narayn Rao Shyam Rao Deshmukh (163 ITR 31) in support of the proposition that unless there is actual partition in pursuance of a deemed partition, the status of the family continues as joint family. A reference was also made to Hon'ble Supreme Court's judgment in the case of ACIT Vs Maharani Raj Laxmi Devi (224 ITR 582) to support the contention that though, for section 6 of Hindu Succession Act would govern the right of the parties, so far as income tax proceedings are concerned, section 171 of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to him if a partition of the property had taken place immediately before his death, irrespective of whether he was entitle to claim partition or not. The appellant has also contended that on notional partition all his HUF properties will be divided into one half share each belonging to him in his individual capacity and in his HUF capacity. The appellant has also submitted that this has also been established by solicitors and advocates H. Desai & Co while issuing the title clearance certificate. The appellant has also contended that as per section-6 of Hindu Succession Act it is mandatory to deem a partition in the properties having taken place immediately before the death of a Hindu Mitakshara Coparceners and this division has been introduced by way of deeming fiction and upon such notional partition the property would stand divided amongst the coparceners. It is also submitted that on the death of father of the appellant HUF ceased to exist and a total partition of HUF immediately before the death of assessee's father is deemed to have taken place as per the provisions of section 6 of Hindu Succession Act and there is no question of passing order u/s.171 of the I.T. Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it cannot be said that the properties have been divided amongst the assessee in his individual capacity as well as in HUF capacity. The property will remain with the HUF as no partition has been taken place as per the provision of section 171 of the Act. Considering the above discussion, the view taken by the A.O. that the capital gain earned on the sale of these three immovable properties taxed in the hands of the assessee HUF is justified and correct. Thus the ground raised by the appellant are dismissed." 5. The assessee is not satisfied and is in further appeal before us. 6. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 7. We find that section 6(3) of the Hindu Succession Act, 1956, as it stands post 2005 amendment, provides that "where a Hindu dies after the commencement of the Hindu Succession (Amendment) Act, 2005, his interest in the property of a Joint Hindu family governed by the Mitakshara law, shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship, and the coparcenary property shall be deemed to have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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