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TMI Blog2015 (11) TMI 1837X X X X Extracts X X X X X X X X Extracts X X X X ..... and capital gains reported by the assessee HUF and accepted the exemption claimed under section 54F of the Act on the sale proceeds reported by the assessee HUF. The Hon ble Andhra Pradesh High Court in the case of Addl. CIT Vs. P.Durgamma [ 1986 (9) TMI 58 - ANDHRA PRADESH HIGH COURT ] considered the scope of section 171 of the Act deeming HUF to be undivided. In the case on hand, no evidence has been brought on record to suggest that late A.R.Pandurangan HUF has been assessed. In such circumstances, the sale proceeds of the property cannot be assessed in the hands of late A.R.Pandurangan (HUF). We also see no reason to disbelieve the memorandum of oral recording partition furnished by the assessee. Thus the contentions of the Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09 on 28.07.2008 admitting total income of ₹ 72,598/- after claiming exemption under section 54F of the Act out of the capital gain disclosed by the assessee HUF on the share in the property which the HUF got around ₹ 63.09 lakhs. The assessment was completed under section 143(3) of the Act on 15.12.2010 accepting the capital gains returned by the assessee. In the course of assessment proceedings the Assessing Officer examined the whole transaction of sale of property and distribution of sale proceeds among the sons of late A.R.Pandurangan and accepted the capital gain returned by the assessee and allowed exemption under section 54F of the Act as claimed by the assessee. 3. Later, Commissioner of Income Tax-IV, Chennai issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the proceedings before him. The co-ordinate Bench further observed that since the fact of whether late A.R.Pandurangan HUF was assessed to income-tax or not is not coming out from the assessment order thus the matter was restored to the file of the Commissioner of Income Tax for fresh consideration. 4. In the proceedings before the Commissioner of Income Tax, the assessee appears to have filed memorandum of recording oral partition and submitted that the HUF of late A.R.Pandurangan was not assessed to tax and since it is not assessed to tax provisions of section 171 have no application. The Commissioner of Income Tax disbelieved the memorandum of oral partition submitted by the assessee HUF and held that income from sale of land shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partition executed among the children of late A.R.Pandurangan demarcating the percentage of share in the property gain has to be assessed in their hands and therefore there is no justification in holding that gain has to be assessed in the hands of late A.R.Pandurangan estate. 6. Departmental Representative supports the order of the Commissioner in denying exemption under section 54F of the Act. 7. Heard both sides. Perused orders of lower authorities and the material on record. The Commissioner of Income Tax passed order under section 263 setting aside the assessment directing the Assessing Officer to disallow deduction allowed under section 54F of the Act in the hands of the assessee. The Commissioner of Income Tax was of the view t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment in the past could be deemed to continue to be a Hindu undivided family till an order of partition under section 171(1) is recorded 9. In the case on hand, no evidence has been brought on record to suggest that late A.R.Pandurangan HUF has been assessed. In such circumstances, the sale proceeds of the property cannot be assessed in the hands of late A.R.Pandurangan (HUF). We also see no reason to disbelieve the memorandum of oral recording partition furnished by the assessee. Thus the contentions of the Commissioner of Income Tax that sale proceeds have to be assessed in the hands of late A.R.Pandurangan (HUF) is not sustainable in law. Thus, we set aside the order of the Commissioner of Income Tax passed under section 263 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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