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TMI Blog2021 (7) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... on sale of property. The assessee filed its return of income on 28.02.2014 declaring total income of Rs. 75,34,230/-, for assessment year (A.Y.) 2013-14 including agriculture income to the tune of Rs. 2,62,350/-. The return of income of the assessee was processed under section 143(1) of the Act. Later, the assessee`s case was selected for scrutiny through CASS. The Notice under section 143(2) of the Act was issued to the asssessee on 03.09.2014 and assessing officer framed the assessment under section 143(3) of the Act on 22.01.2016. On verification of the details of sale and purchase of land, it was observed by Assessing Officer that assessee HUF has claimed exemption under section 54B of the Act to the tune of Rs. 27,22,020/- in respect of purchase of land situated at Vihan, Block No.281. The Assessing Officer noted that the property has been registered in the name of coparcener namely, Vrushabh Babubhai Kanani, who is an individual. It was further noted by the Assessing Officer that the funds of HUF has been utilized, and the same was transferred from bank account of HUF to bank account of co-parcener. The assessee was therefore asked to explain as to why the exemption claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e here section 4 Benami Transactions (Prohibition) Act; 1988 reproduced hereunder for brevity: "4 prohibition of the right to recover property held benami-(1) No. suit claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a claiming to be the real owner of such property. (2) No defence based on any right in respect of any property held benami, whether against the person in whose name the property is held or against any other person, shall be allowed in any suit, claim or action by or behalf of a person claiming to be the real owner of such property. (3) Noting in this section shall apply- (a) where the person in whose name of the property is held is a coparcener in a Hindu undivided family and the property is held for the benefit of the coparceners in the family; or (b) where the person in whose name the property is held is a trustee or other person standing in a fiduciary capacity, and the property is held for the benefit of another person for whom he is a trustee or whom he stands in such capacity". Plain regarding of above clearly shows a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tilizing the fund of HUF. Learned Counsel submits that the property was not purchased in the name of HUF but it was purchased in the name of member of the HUF. The Learned Counsel pleads that the property was purchased out of the value of agricultural land sold and further the same was accounted for in the books of HUF and, therefore, the condition of provisions of section 54B stands fulfilled. Thus, Ld.Counsel further pleads that merely because, property was purchased in the name of member of the HUF, the deduction under section 54B of the Act ought not to be disallowed. 8.On the other hand, Ms.Anupama Singla - Sr.DR, for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. 9. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld.CIT(A) and other materials brought on record. We find that a key issue arises for our apt adjudication in the instant lis, is that whether proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an the cost of the new asset, the capital gain shall not be charged under section 45 of the Act. Therefore, it is abundantly clear that Hindu undivided family (HUF) may also sale agricultural land and purchase another agricultural land and claim exemption under section 54B of the Act. Thus, HUF is also an assessee under the Income Tax Act. However, HUF is an artificial person, like limited company. All the activities of a limited company are performed by its directors, likewise, all the activities of HUF are performed by its member of HUF. Therefore, the purchase of agricultural land or sale of agricultural land are to be done by members of HUF , on behalf of HUF. In the instant case the entire purchase consideration for agricultural land was paid by utilizing fund of HUF, therefore, agricultural land so purchased belongs to HUF. Just because the agricultural land was registered in the name of individual member of HUF, does not mean that it is not a property of HUF and the HUF can not claim exemption under section 54B of the Act. We note that Hon`ble High Court of Punjab and Haryana in the case of Gurnam Singh [2008] 170 Taxman 160 (Punjab & Haryana), held that the purchased land w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ..." If the contents of the 'ikrarnama'/agreement to sale is analyzed one undisputed fact is oozing out that the sale proceeds of the agricultural land were in fact used to purchase another agricultural land. Section 54B speaks about transfer of capital asset being land within a specified period and another land is purchased for agricultural purposes, then it shall be dealt with in accordance with the provision of this section. It is not the case of the revenue that the capital gain was not utilized by the assessee for the purchase of new asset before the date of furnishing the return of income under section 139. In fact, if the facts as detailed in the 'ikrarnama' are analyzed, the capital gains was utilized by the assessee for purchasing the new asset. Section 54B is applicable as per the provision of clause 2 of the section. The only dispute raised by the revenue is that the land was got registered in the name of his son. This fact is not disputed that the assessee was an old and illiterate person and never filed any return. At the same time, he was not having any other source of income also. It is not the case that the sale proceeds were used for any other p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed deduction under section 54B merely because registered document of new land was executed in name of his wife. The findings of the Hon`ble Court is reproduced below: "7.2 On the ground of investment made by the assessee in the name of his wife, in view of the decision of Delhi High Court in Sunbeam Auto Ltd and other judgments of different High Courts, the word used is assessee has to invest it is not specified that it is to be in the name of assessee. 7.3 It is true that the contentions which have been raised by the department is that the investment is made by the assessee in his own name but the legislature while using language has not used specific language with precision and the second reason is that view has also been taken by the Delhi High Court that it can be in the name of wife. In that view of the matter, the contention raised by the assessee is required to be accepted with regard to Section 54B regarding investment in tubewell and others. In our considered opinion, for the purpose of carrying on the agricultural activity, tubewell and other expenses are for betterment of land and therefore, it will be considered a part of investment in the land and same is required ..... X X X X Extracts X X X X X X X X Extracts X X X X
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