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TMI Blog2020 (4) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... n of capital gain by the revenue authorities is proper and as to whether Assessee would be entitled to the benefit of deduction u/s.54F of the Income Tax Act, 1961(Act). 3. The Assessee is an individual. He is a Doctor by profession. During the previous year relevant to AY 2006-07 i.e., on 10.6.2005, he together with members of his family sold property of an extent of 15 Acres situate in S.No.19,20,31 and 157, of Harananahalli Villalge, Jigani Hobli, Anekal Taluk, Bangalore District, (hereinafter referred to as "the property") to M/s. Nirman Shelters (P) Ltd. The break-up of extent of property in each S.No. is as follows: (40 Guntas = 1 Acre) S.No.20 - 3 Acres and 11 Guntas, S.No.19 - 4 Acres and 35 Guntas, S.No.31 - 5 Acres and 33 Guntas and S.No.157 -1 Acre and 01 Guntas (out of 3 Acres and 19 Cents) 4. The property originally belonged to Hindu Undivided Family (HUF) governed by the Mitakshara Law, comprising of Rama Reddy and R.Rangappa Reddy, who wer the two sons of Chikkarama Reddy and their sons. The following genealogy tree will show the members of the HUF: 5. The family remained undivided and the properties were all HUF. Rama Reddy and his sons filed suit O.S.No.215 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a sum of Rs. 40 lacs was paid to Radha K.Reddy the daughter of R.Rangappa Reddy and the remaining sum of Rs. 4,60,00,000/- was divided between the 4 sons of R.Rangappa Reddy in the ratio of 145: 145: 145: 25. 9. The Assessee computed his share of Long terms capital gain on sale of the property at Rs. 74,98,442/-. The said computation is given as annexure-1 to this order. Annexure-I (enclosed) 10. The AO did not accept the claim that Rs. 40 lacs paid to one of the daughter of R.Rangappa Reddy should be excluded from the full value of consideration received on Transfer. The AO also did not accept the index cost of acquisition of the property computed by the Assessee at Rs. 2,22,11,840 and he determined the cost of acquisition of the property at Rs. 17,89,200. The AO thus computed Capital gain at Rs. 4,82,10,8000 (Rs. 5,00,00,000- 17,89,200) and arrived at share of Assessee's capital gain at Rs. 1,47,24,056/- as against the Assessee's computation of Rs. 74,98,442/-. The Assessee had claimed that the property was not a capital asset within the meaning of the term as defined in Sec.2(14) of the Act as it was Agricultural land which falls within the ambit of exception to the definit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is narrated in para-2 on pageNo.3 of sale deed dated 10/6/2005. The partition of the aforesaid property has already taken place and their shares are definite and ascertainable. Under the circumstances, they are free to sell their respective shares of the said properties. 4.3 In the remand report, the AO has reported that the appellant has sold property in earlier year also and has admitted capital gains in his individual capacity. In the year under consideration, the appellant followed the same method and admitted income. After the appellant admits the income, he has made verification year after year consistently and there is no material by any other member of the HUF to dispute the same. It is also reported that the return of income and the return of wealth have never been filed in the status of HUF and they are not inclined to file return of income in HUF capacity as they feel there is no necessity to do so. 4.4. It is admitted that the sale consideration of the property was apportioned among the co-owners and the respective share of sale consideration was offered voluntarily as long term capital gains in their respective hands. The taxability of the said consideration in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed by the appellant on the facts and circumstances o the case. 5. The authorities below were not justified in determining a sum of Rs. 24,000/- per acre as cost as on 01/04/1981 on the facts and circumstances of the case. 6. The authorities below were not justified in denying a um of Rs. 10,00,000/- being expenses incurred on protection and maintenance of land and developing and marketing expenses to property on the facts and circumstances of the case. 7. The authorities below were not justified in denying sum of Rs. 3,50,000/- as service charges and other expenses as cost on the facts and circumstances of the case. 8. The authorities below were not justified in not giving deduction u/s 54F of the IT ct, being reinvestment on another property on the facts and circumstances of the case. 15. The learned counsel for the Assessee drew our attention to the various documents of partition and sale and submitted that the property was clearly ancestral property and not individual property of the Assessee and only HUF is the right person in whose hands the capital gain can be assessed. It was submitted by him that the following type of assets are generally accepted as Assets of H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue. He relied on the decision of Hon'ble Patna High Court in the case of CIT Vs. Radhe Shyam Agarwal 230 ITR 21 (Patna) wherein it was held wherein it was held that assets received on partial partition continued to be HUF property. He drew our attention to the following passage at page 32 of the reports: "The law so far as relevant for the purpose of these case may be summarized thus. On a partition of a bigger HUF, the property coming into the hands of the assessee become his separate property vis-a-vis other coparceners although it continues to be joint vis-a-vis his wife and children and he continues to constitute a HUF with them, i.e., his wife and children, and in the absence of the children, with the wife alone. But where on partition separate share are allotted not only to the children but also to the wife, the existence of the HUF comes to an end. And the property in the hands of the Assessee becomes separate property and the income therefrom is liable to be taxed in the status of individual until another son is born or adopted in future." He pointed out that when the above position in law was pointed out, the learned CIT(A) without deciding the correctness of the cla ..... 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