Case Law Details
S.K. Agarwal (HUF) Vs ITO (ITAT Delhi)
It is an admitted fact that during the AY 2015-16, the assessee HUF sold a plot of land and earned capital gain which it claimed exempt under section 54F as the assessee purchased a residential house. The only cause of denial of exemption by the Revenue is that in Sale Deed the names of the two members of HUF also appear along with the name of the assessee HUF and that the assessee failed to prove that other two co-purchasers are members of assessee HUF. On this ground alone the Revenue has negatived the claim of the assessee HUF by making incorrect inference and surmise that the two members of the HUF are co-purchasers. This is unjustified on the face of the facts brought on record that the entire consideration towards purchase was financed by the funds of the HUF alone and there was no contribution by the two other members of HUF. The decision (supra) of the Hon’ble Gujarat High Court applies squarely to the facts of the assessee’s case. Rather the case of the assesee is on better footing as in the decision (supra) of the Hon’ble Gujarat High Court the investment towards purchase of residential property was made in the name of some of its members instead of the assessee HUF. Even then, the Hon’ble Gujarat High Court held in the decision (supra) that the investment made in the name of members of HUF in substance and in effect belong to HUF. We are, therefore, of the opinion that the impugned addition deserves to be deleted. This ground of the assessee is thus allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
The appeal by the assessee arises out of the order dated 31.10.2018 of the Ld. Commissioner of Income Tax (Appeals)-Ghaziabad [“CIT(A)”] pertaining to the assessment year (“AY”) 2015-16.
2. The assessee is a HUF. It filed its e-return of income on 03.09.2015 declaring income of Rs. 4,63,380/- for AY 2015-16. After initial processing under section 143(1) of the Income Tax Act, 1961 (the “Act”), the case was selected under limited scrutiny through CASS. In response to notices under section 143(2) and 142(1) and questionnaire, the assessee filed written replies along with the required details and relevant documents / information and bank statements etc. which the Ld. Assessing Officer (“AO”) examined. The assessment under section 143(3) was completed on 21.12.2017 on total income of Rs. 65,20,523/- including therein addition of Rs. 4,89,600/-representing disallowance of cost of construction of flat claimed by the assessee and addition of Rs. 55,67,543/- representing incorrect claim of exemption under section 54F. Aggrieved thereby, the assessee appealed before the Ld.CIT(A) who dismissed the appeal of the assessee. Now the assessee is before the Tribunal by way of second appeal.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
