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Case Law Details

Case Name : Babubhai Arjanbhai Kanani (HUF) Vs DCIT (ITAT Surat)
Appeal Number : ITA No.280/SRT/2018
Date of Judgement/Order : 08/07/2021
Related Assessment Year : 2013-14
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Babubhai Arjanbhai Kanani (HUF) Vs DCIT (ITAT Surat)

we note that entire purchase consideration for agricultural land was paid by utilizing money of HUF. We note that Purchase Deed is in the name of the Coparcener (one of the HUF members). However, the property (land) is owned by HUF. The property (land) is shown in the Balance Sheet of HUF. The Co-parcerner of the HUF may hold property on behalf of the HUF. The HUF money was utilized to purchase the said agricultural land. The HUF is doing agricultural activities. For example, in case of a company, a property may be registered in the name of the Director, because company is an artificial person which can not talk, walk and think, however, the Directors do all the activities on behalf of the Company, therefore, just because property is registered in the name of director does not mean that director is owner in substance. In substance, the Company will be treated as owner of the property. Likewise, HUF is also an artificial person which can not talk, walk and think, however, the Coparceners (member of HUF) do all the activities on behalf of the HUF. In substance, the HUF is owner of the said agricultural land though it is registered in the name of the Coparcener, as the HUF is enjoying all the fruits of the said agricultural land. Thus, the HUF is entitled to claim exemption/deduction under section 54B of the Act.

No Section 54B deduction denial merely for registration of new agricultural land in name of co-parcener

FULL TEXT OF THE ORDER OF ITAT SURAT

By way of this appeal, the assessee has challenged correctness of the order dated 05.12.2017, passed by the learned CIT(A), in the matter of assessment under section 143(3) of the Income Tax Act 1961, for the assessment year 2013-14. Grievances raised by the assessee are as follows.

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