M.Palaniappan, CHENNAI V. ITO, Karaikudi

ITA 1079/CHNY/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68843 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 06-11-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 22-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGERI
• Assessee Lawyers: S SRIDHAR
• Keywords: Revision of order; Revised return
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA NO. 1079/MDS/2013 (ASSESSMENT YEAR: 2009-10) MR. M.PALANIAPPAN, S/O. M.AL.M.M.MUTHUKARUPPAN, NO.45, MARKANDEYAN KOIL STREET, KARAIKUDI-630 001. PAN:AAIPP4570E VS. INCOME TAX OFFICER, WARD-I(2), KARAIKUDI. (APPELLANT) (RESPONDENT) APPELLANT BY : MR. S.SRIDHAR, ADVOCA TE RESPONDENT BY : MR. T.N.BETGERI, JCIT DATE OF HEARING : 6 TH NOVEMBER, 2013 DATE OF PRONOUNCEMENT : 26 TH NOVEMBER, 2013 O R D E R PER CHALLA NAGENDRA PRASAD, JM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), MADUR AI DATED 22.02.2013 FOR THE ASSESSMENT YEAR 2009-10. T HE ASSESSEE HAS RAISED AS MANY AS 12 GROUNDS IN ITS AP PEAL, BUT THE CRUX OF THE ISSUE IN THE APPEAL IS THAT THE COM MISSIONER OF INCOME TAX (APPEALS) ERRED IN SUSTAINING THE COMPUT ATION OF CAPITAL GAINS RELATING TO SALE OF BANGALORE PROPERT Y IN THE ITA NO. 1079/MDS//2013 2 HANDS OF THE APPELLANT INDIVIDUAL MADE BY THE ASSES SING OFFICER BASED ON AIR INFORMATION. 2. BRIEF FACTS ARE THAT THE ASSESSEE INDIVIDUAL FIL ED RETURN OF INCOME ON 31.03.2010 FOR THE ASSESSMENT YEAR 2009-1 0 ADMITTING INCOME OF ` 6,44,564/-. THIS RETURN WAS FILED BELATEDLY. AS PER THE AIR INFORMATION, THE ASSESSIN G OFFICER CAME TO KNOW THAT ASSESSEE SOLD HIS HOUSE PROPERTY SITUATED AT CRESCENT ROAD, BANGALORE ON 12.11.2008 FOR A CONSIDERATION OF ` 1,30,00,000/-. THE ASSESSEE HAS NOT ADMITTED ANY CAPITAL GAINS ON SALE OF THE ABOVE PRO PERTY IN THE RETURN OF INCOME FILED. AFTER SELECTION OF THIS CASE FOR SCRUTINY, THE ASSESSEE FILED REVISED RETURN ON 19.0 1.2011 ADMITTING INCOME OF ` 6,44,564/- AS WAS ADMITTED IN HIS RETURN FILED ON 31.03.2010. IN THIS RETURN, WHICH WAS FILE D ON 19.01.2011, THE ASSESSEE COMPUTED LONG TERM CAPITAL GAINS ON SALE OF THE BANGALORE PROPERTY AND CLAIMED LONG TERM CAPITAL GAINS AS EXEMPT FROM INCOME-TAX. THE ASSES SING OFFICER HAS COMPLETED THE ASSESSMENT COMPUTING THE LONG TERM CAPITAL GAINS ON THE CONSIDERATION RECEIVED ON SALE OF BANGALORE PROPERTY DENYING EXEMPTION UNDER SECTION 54(2) OF ITA NO. 1079/MDS//2013 3 THE ACT STATING THAT THE ASSESSEE HAS NEITHER FURNI SHED EVIDENCE FOR INVESTMENT OF CAPITAL GAINS TOWARDS PU RCHASE OF OR CONSTRUCTION OF NEW ASSET NOR DEPOSITED THE SALE CONSIDERATION IN THE SPECIFIED CAPITAL GAINS SCHEME BEFORE DUE DATE AS SPECIFIED IN SECTION 54(2) OF THE ACT. THE ASSESSEE CARRIED THE MATTER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE ASSESSEE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) CONTENDED THAT THE PROPERTY SITUATED AT BANGALORE RELATES TO APPELLANT HUF PROPERTY AND THEREFORE, CAPITAL GAINS ON SUCH HUF P ROPERTY CANNOT BE ASSESSED IN THE HANDS OF THE APPELLANT IN DIVIDUAL. THE ASSESSEE HAS PRODUCED VARIOUS DOCUMENTS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) IN THE FORM OF PARTITION DEED DATED 04.06.1969 BETWEEN THE ASSESSEES GRANDF ATHER AND ASSESSEES FATHER, COPY OF WILL DATED 08.11.197 2 EXECUTED BY THE ASSESSEES GRANDFATHER AND MEMORAN DUM OF FAMILY ARRANGEMENT DATED 31.03.1993 BETWEEN THE AS SESSEE AND HIS BROTHERS. THE COMMISSIONER OF INCOME TAX (APPEALS) ON EXAMINING ALL THESE DOCUMENTS AND EVID ENCES PRODUCED BY THE ASSESSEE HAS CONCLUDED THAT THE PRO PERTY ITA NO. 1079/MDS//2013 4 SITUATED AT BANGALORE BELONGS TO ASSESSEE HUF. HOWE VER, HE SUSTAINED THE COMPUTATION OF CAPITAL GAINS IN THE H ANDS OF THE APPELLANT INDIVIDUAL STATING THAT THERE IS NO EXIST ENCE OF APPELLANT HUF ON RECORD. 3. THE COUNSEL FOR THE ASSESSEE INVITING OUR ATTEN TION TO THE DOCUMENTS PLACED AT SERIAL NUMBERS 1 TO 6 OF TH E PAPER BOOK REPRESENTING PARTITION DEED BETWEEN THE ASSESS EES GRANDFATHER AND ASSESSEES FATHER, COPY OF WILL EXE CUTED BY THE ASSESSEES GRANDFATHER, MEMORANDUM OF FAMILY ARRANGEMENT BETWEEN THE ASSESSEE AND HIS BROTHERS AND SALE DEED OF THE PROPERTY, SUBMITS THAT ALL THESE D OCUMENTS SHOW THAT THE PROPERTY SITUATED AT CRESCENT ROAD, B ANGALORE BELONGS TO ASSESSEE HUF AND THE COMMISSIONER OF INC OME TAX (APPEALS) HAVING OBSERVED THAT THIS PROPERTY BE LONGS TO ASSESSEE HUF, THERE IS NO JUSTIFICATION IN SUSTAIN ING THE LONG TERM CAPITAL GAINS ASSESSED IN THE HANDS OF THE ASS ESSEE INDIVIDUAL. 4. THE DEPARTMENTAL REPRESENTATIVE SUPPORTED THE OR DER OF THE LOWER AUTHORITIES IN SUSTAINING THE LONG TER M CAPITAL ITA NO. 1079/MDS//2013 5 GAINS IN THE HANDS OF THE ASSESSEE INDIVIDUAL. THE DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THE ASSESS EE CLAIMED EXEMPTION IN HIS INDIVIDUAL HANDS AS WELL A S HUF HANDS IN RESPECT OF THE CAPITAL GAINS ON THE BANGAL ORE PROPERTY. THE DEPARTMENTAL REPRESENTATIVE SUBMITS T HAT EXEMPTION CANNOT BE ALLOWED IN BOTH THE HANDS. 5. HEARD BOTH SIDES. PERUSED THE ORDERS OF LOWER AUTHORITIES AND THE DOCUMENTS PLACED BEFORE US. TH E ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT B ASED ON THE AIR INFORMATION CAME TO KNOW THAT THE ASSESSEE SOLD A PROPERTY SITUATED AT CRESCENT ROAD, BANGALORE ON 12 .11.2008 FOR A TOTAL CONSIDERATION OF ` 1,30,00,000/-. THE COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT THE ASSESSEE HAS NOT OFFERED THE CAPITAL GAINS IN THE RETURN FILED BY HI M BELATEDLY AND SINCE THE ASSESSEE DID NOT FURNISH ANY EVIDENCE FOR INVESTMENT OF THE AMOUNT OF CAPITAL GAINS TOWARDS P URCHASE OR CONSTRUCTION OF A NEW ASSET OR DEPOSITED IN THE SPECIFIED SCHEME BEFORE THE DUE DATE AS STIPULATED IN SECTION 54 OF THE ACT, THE ASSESSING OFFICER WAS OF THE VIEW THAT EXE MPTION ITA NO. 1079/MDS//2013 6 CLAIMED BY THE ASSESSEE UNDER SECTION 54 OF THE ACT IN THE BELATED REVISED RETURN CANNOT BE CONSIDERED, THUS, HE COMPUTED THE LONG TERM CAPITAL GAINS IN THE HANDS O F THE ASSESSEE INDIVIDUAL. THE COMMISSIONER OF INCOME TA X (APPEALS) AFTER CONSIDERING THE SUBMISSIONS AND EVI DENCES PRODUCED BY THE ASSESSEE BEFORE HIM HAS GIVEN A FIN DING THAT THIS PROPERTY BELONGS TO ASSESSEE HUF OBSERVING AS UNDER:- 10 . ORIGINALLY THE PROPERTY AT D.NO . 17 , CRESCENT ROAD, HIGH-GROUNDS , BANGALORE ALONG WITH OTHER DOOR NUMBERS 18 , 19 , 20 AND 21 W A S PURCHASED B Y A . M . K.M.AL . MUTHUKARUPPAN CHE T TIAR OUT OF THE FAMILY FUNDS WITH CORROBORATIVE EVIDENCE - REGISTERED PARTITION DEED VIDE DOCUMENT NO.932 OF 1969 DATED 4.6 . 1969 IN WHICH DOOR NO S . 18 TO 21 WERE A LL OTTED TO A . M . K . M . AL, MUTHUKARUPPAN CHETTIAR HUF AND WHEREAS DOOR NO, 17 WAS ALLOT T ED TO M.AL . M . MUTHUKARUPPAN CHETTIAR HUF . SUBSEQUENTL Y ON 4.2 . 1981 TH E PROPERTY BEARING DOOR NOS . 20 AND 2 1 WAS S OLD ( COP Y O F W HICH I S F URNI S H E D FOR DETERMINING FAIR MARKET V ALUE AS ON 1A . 1981 WI T H THE A SS E SS ING O F FICER ) IN WHICH THE PROPERTY CLEARLY DEMARCATES THAT IT BELONG S TO HUF . TH E BALANCE DOOR NOS. 18 AND 19 WERE ALLOTTED TO RAVI AND ALAGAPPAN AND WHEREA S DOOR NO. 17 WAS ALLOTTED TO THE APPELLANT VIDE MEMO R ANDUM O F UNDER S TANDING AND F A MIL Y ITA NO. 1079/MDS//2013 7 ARRANGEMENT. 11 . SINCE THE PROPERT Y G O T VIDE MEMORANDUM OF UNDERSTANDING AND FAM I LY ARRANGEMENT WERE INCORPOR A TED IN THE BOO K S O F INDIVIDUAL, A RE V ERSA L ENTR Y ON 1A.2008 WAS MADE IN THAT INDIVIDU A L'S BOO K A ND THE RECEIPT OF S ALE PROCEEDS ON 12.11 . 2008 WERE S HOWN AS LIABILIT Y. IT IS P E RTINENT TO NOTE THAT ON 1A.2008 THE PROPERTY STANDS IN THE NAME O F A.M.K.M.AL . MUTHUK A RUPPAN CHETTIAR AND IT WAS TRANSMITTED VIDE BMP I REV / 2008-09 1 KC / 364009 ON L Y ON 7 . 11 . 2008 . IT AMPLY PROVES THAT THE PROPERTY WAS ALLOTTED TO THE APPELLANT ONL Y ON PARTITION ENTAILS THE CHARACTER OF FAMILY NUCLEUS. 12 . IN ACCORDANCE WITH THE DECISION OF THE M A DRAS HI G H COURT IN THE CASE OF W.P . A.R . RAJAGOPALAN V . COMMIS S ION E R OF WE A LTH T AX REPORTED IN 241 ITR 344 THAT THE ASSESSEE HAD ADMITTEDLY RECEIVED HIS SHARE OF ANCESTRAL PROPERTY AT A PARTITION . THE PROPERTY HAD THE CHARACTER OF JOINT FAMILY PROPERTY. THE PROPERTY WAS HELD FOR S OME TIME B Y THE ASSESSEE BY HIMSELF AS HE WAS BACHELOR BETWEEN 1952 AND 1960 . DURING THE PERIOD THE CHARACTER OF THE PROPERTY AS JOINT F A MIL Y PROPERTY WAS NOT ERASED THOUGH IT WAS OPEN TO HIM TO DEAL WITH THE PROPERTY AS HE LIKEL Y IN THAT PERIOD. WHEN THE ASSESSEE GOT MARRIED AND ACQUIRED A FAMILY , THAT FAMILY CONSTITUTED A HINDU UNDIVIDED FAMILY AND THE ANCESTRAL PROPERTY WHICH THE ASSESSEE RECEIVED AT THE PARTITION BECAME THE PROPERTY OF THAT HINDU UNDIVIDED FAMILY. ITA NO. 1079/MDS//2013 8 13. IN PRESENT SCENARIO, THE SUO-MOTTO TREATMENT OF THE PROPERTY ALLOTTED ON PARTITION AS INDI V IDUAL PROPERT Y B Y THE APPELLANT INADVERTENTLY DOES NOT ERA S E THE CHARACTER OF JOINT FAM I LY PROPERT Y . 14. THE SALE DOCUMENT DATED 4.2.1981 AND 12.11 . 2008 ENUMERATES THE HI S TORY OF BEQUEATHING A NCESTRAL WITH THE CHARACTER OF FAMILY NUCLEUS AND AL S O PARTITION DEED REGISTERED AT KARAIKUDI WITH DOCUMENT NO. 932 OF 1969 DATED 4.6.1969 DEMARCATES DOOR NOS. 18 TO 21 TO THE FAMILY OF A . M.K.M.A.L MUTHUKARUPPAN CHETTIAR AND DOOR NO. 17 TO THE FAMILY OF M.AL.M. MUTHUKARUPPAN CHETTAIR . THE S E DOCUMENTS CLEARLY ESTABLISHES THE CHARACTER OF FAMILY NUCLEU S IN RESPECT O F DOOR NO. 17, CRESCENT ROAD, HIGH-GROUNDS , BANGALORE. HENCE THE GAIN ON SALE OF BANGALORE PROPERTY HAS TO BE ASSESSED IN THE HANDS OF HUF AND NOT IN THE HANDS OF INDIVIDUAL. 15 . ON VERIFYING THE FACTS OF THE CASE, APPELLANTS SUBMISSION , IT I S SEEN THAT THE APPELLANT IS ASSESSED AS HUF WITH THE INCOME TAX OFFICER, WARD II(2) , CHENNAI UNDER PAN - AAW - IP7562E AND FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 . THE APPELLANT BEING A MEMBER OF HIS GREAT GRANDFATHER HUF INHERITED THE ANCESTRAL BANGALORE PROPERTY FROM HIS FATHER M . AL.M. MUTHUKARUPP A N CHETTIAR WHO IN TURN GOT THE BANGALORE PROPERTY VIDE REGI ST ERED . PARTITION DE E D BEA R ING DOCUMENT N O . ITA NO. 1079/MDS//2013 9 9 3 2 O F 1 9 6 9 DATED 4 . 6.1 9 6 9 F RO M HIS FA THER A . M.K.M . AL . MUTHUKARUPP A N CH E TT I AR ( H U F ) . M . AL . M. M U THUKARUPPAN CHETTIAR DIED AND LEFT A TESTAMENT DATED 2 . 4 . 1 97 9 BEQUE A T H I N G TH E H UF PR O PERTIE S IN FA V OUR OF HI S FOUR M A LE LEG A L HEIRS . 16 . TH E LEG A L HEIRS ENTERED 8 MEMOR A NDUM OF U ND E R S TANDIN G AND FA MIL Y ARRANGEMENT ON 31 . 3 . 19 9 3 IN W HIC H TH E A B OVE B A N GA L O R E PROP E RT Y W A S A LL OT TED TO A PPELLANT ' S FATHER H UF . B Y MEA N S OF S H EE R I N A D V ER T E NC E, TH E PROP E RT Y A LLOTTED ON PARTITION W AS IN C ORPO RA TED IN T HE B OO K S O F INDI V IDU A L AND R E NT A L IN C OME THERE FROM W AS ASS ESSE D IN TH E I N DI V IDU A L HAND S. T HE IN A D V ERT E N CE IS N O TI C ED ONLY W HEN HE MOOTED F O R SAL E O F B A N G ALORE PROPER TY. TH E PROPE R T Y S T A ND S IN THE N A ME O F A . M.K. M. AL . MUTHUK A RUPPAN C H E T T I A R . ON SCRUTINI S IN G TH E PARENT DOCUMENTS, THE ASSESSEE CA ME T O KN OW TH E PROP ER T Y I S A CTU A LL Y HUF PROPERT Y WHICH IS ALREAD Y A LLOTTED V IDE MO U A ND F A MIL Y ARR A N G EM E NT ON 3 1 . 3.9 3 . HENCE THE ASSESSEE IN HI S I N DI V IDUAL CA P AC I TY MA D E A R EVE R SA L ENTR Y I N HI S INDIVIDUAL BOOKS OF ACCOUNT B Y DEBITIN G THE C A PIT A L AC COUNT AND CREDIT I NG THE BUILDING ACCOUNT OF FIXED ASSET S . 1 7. SUB S EQUENTL Y, TH E FA THER H UF H AS AFF E C T E D A P A RTITION A ND F OR HI S S HARE , TH E H U F ALLOTTED TH E BAN G ALOR E PROP E RT Y IN FA VOU R O F M . P A L A NIAPP A N AS A BSOLUTE OWNER . CONSEQUENT T O P A RTITION TH E A PPELLANT H A D I NCORPOR A TED THE PROPERTY AT CRESCENT ROAD , BA N G A LORE G OT ON P A RTITION IN HI S ITA NO. 1079/MDS//2013 10 BOOKS O F A C COUNT OF THE FAMIL Y ON 1 . 4.2008. SUBSEQUENTL Y, TH E APPELL A NT FO R E FFECTIN G THE S A L E , H E HA S TR A N S FERRED THE KATHA (PATT A) IN R E S PE C T OF B A N GAL ORE P R O P E R TY STA NDIN G I N TH E N A ME OF A . M.K . M.AL . MUTHUK A RUPP A N C HETTI A R TO HIM S EL F O N 7 . 11.08 A ND SO L D THE CRESCENT ROAD , BANGALORE PROPERT Y . SINC E THE H UF HA S IN VES TED TH E SA L E PROCEEDS , HE (REPRESENTING HUF) HAD FILED THE RETURN CLAIMING EXEMPTION UND ER SECTION 54 OF THE ACT . THESE FACTS COULD BE CORROBORATED WITH THE STATEMENTS OF PROFIT AND LOSS ACCOUNT AND BALANCE SHEET . 18 . AS PER THE DIRECTIONS OF THE HON'BLE HIGH COURT OF MADRAS, MADURAI BENCH, VIDE ITS ORDER DATED 21 . 12.2012 WHICH UPHELD THE RIGHT OF THE APPELLANT FOR PURSUING THE APPEAL PENDING BEFORE THE UNDERSIGNED QUASHED THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX-I, MADURAI, U/S 264 OF THE ACT . ON HAVING VERIFIED THE COPY OF THE RETURN OF THE APPELLANT IN HIS HUF CAPACITY FOR THE YEAR UNDER CONSIDERATION FILED ALONG WITH ENCLOSURES, SUCH AS TRIAL BALANCE SHEET AS ON 31 . 03.2009 THE APPELLANT HAS REFLECTED THE INVESTMENT MADE OUT OF CAPI T AL GAINS AROSE ON SALE OF BANGALORE PROPERTY AT ` 68,43,280 . SIMILARL Y, THE PROFIT ON SALE OF PROP E RT Y AT CRESCENT ROAD, BANGALORE WAS CREDITED AT ' ` 32,30,020. THUS AS ON 31 . 03.2009, THE APPELLANT HAS SHOWN THE INVESTMENT IN RES I DENTIAL HOUSE AT LAZERTH CHURCH ROAD OUT OF THE PROFIT ON SALE OF PROPERTY AT CRESCENT ROAD BANGALORE AND CLAIMED THE ITA NO. 1079/MDS//2013 11 EXEMPTION UNDER SECTION 54 OF THE ACT FOR HAVING INVESTING THE CAPITAL GAINS PROCEEDS. 19 . WHEN HE INTENDED TO SELL THE PROPERTY HE CAME TO KNOW OF THE FACT THAT THE PROPERTY BELONGS TO HUF. THE PROPERTY BELONGS TO THE HUF VIDE REGISTERED PARTITION DEED DOCUMENT NO. 932 OF 1969 DATED 04.06 . L969 IN FAVOUR OF APPELLANTS' F A THER ' S HUF ON DEMISE OF GREA T GRANDFATHER . SUBSEQUENTLY THE APPELLANT INHERITED THE HUF PROPERTY FROM HIS FATHER ON HIS FATHER'S DEATH VIDE MEMORANDUM OF UNDERSTANDING AND FAMILY ARRANGEMENT DATED 31 . 03.1993. THE AWARENESS OF INHERITANCE COMPELLED THE APPELLANT TO MAKE A REVERSAL ENTRY IN HIS INDIVIDUAL BOOKS OF ACCOUNT . SINCE THE INHERITED PROPERTY STANDS IN THE NAME OF THE GREAT GRAND FATHER, THE APPELLANT ON 7.11.2008, HAD MADE AN APPLICATION TO THE BANGALORE DEVELOPMENT AUTHORITY TO CHANGE THE PATTA IN HIS NAME TO FACILITATE THE INITIATION OF SALE OF ABOVE SAID PROPERTY. 6. ON GOING THROUGH THE FINDINGS OF THE COMMISSIONE R OF INCOME TAX (APPEALS), IT COULD BE SEEN THAT THE ASS ESSEE HAS INHERITED THIS PROPERTY AND THE PROPERTY BELONGS TO ASSESSEES HUF AND THE GAIN ON SALE OF BANGALORE PROPERTY HAS TO BE ASSESSED IN THE HANDS OF HUF AND NOT IN THE HANDS O F INDIVIDUAL. IN PARA 14 OF THE COMMISSIONER OF INCOM E TAX ITA NO. 1079/MDS//2013 12 (APPEALS) ORDER, HE HIMSELF AGREED THAT GAIN ON SAL E OF BANGALORE PROPERTY HAS TO BE ASSESSED IN THE HANDS OF HUF AND NOT IN THE HANDS OF INDIVIDUAL. THE COMMISSIONE R OF INCOME TAX (APPEALS) ALSO OBSERVED THAT THE ASSESSE E HAS CLAIMED EXEMPTION IN RESPECT OF THE CAPITAL GAINS O N SALE OF BANGALORE PROPERTY BOTH IN THE HANDS OF INDIVIDUAL AS WELL AS HUF IN THE ASSESSMENT YEAR 2009-10. THE COMMISSION ER OF INCOME TAX (APPEALS) ALSO OBSERVED THAT IN THE BOOK S OF THE ASSESSEE INDIVIDUAL, THIS PROPERTY WAS SHOWN AS PRO PERTY BELONGS TO INDIVIDUAL INITIALLY AND SUBSEQUENTLY RE VERSE ENTRY WAS MADE IN THE ASSESSEES BOOKS ON KNOWING THAT TH IS PROPERTY BELONGS TO HUF AND NOT INDIVIDUAL AND FILE D RETURN FOR THE ASSESSMENT YEAR 2009-10 IN THE STATUS OF HUF SH OWING THE CAPITAL GAINS AND CLAIMING EXEMPTION UNDER SECT ION 54 IN THE HANDS OF HUF. THE COMMISSIONER OF INCOME TAX (APPEALS) HAVING FOUND THAT THE PROPERTY AT BANGALO RE BELONGS TO HUF OF THE ASSESSEE AND GAIN HAS TO BE A SSESSED IN THE HANDS OF APPELLANT HUF, WE ARE UNABLE TO UND ERSTAND AS TO HOW THE CAPITAL GAINS CAN BE ASSESSED IN THE APPELLANT INDIVIDUAL HANDS AND AT THE SAME TIME, REJECTING TH E ITA NO. 1079/MDS//2013 13 EXEMPTION CLAIMED UNDER SECTION 54 OF THE ACT IN TH E HANDS OF APPELLANT HUF. SINCE THE DOCUMENTS PRODUCED BY THE ASSESSEE CLEARLY SHOW THAT THE PROPERTY BELONGS TO ASSESSEE HUF AND EVEN AS PER THE COMMISSIONER OF INCOME TAX (APPEALS)S FINDING THAT THIS PROPERTY BELONGS TO A PPELLANT HUF AND GAIN HAS TO BE ASSESSED IN THE HANDS OF HUF , WE ARE OF THE VIEW THAT CAPITAL GAINS SHALL BE ASSESSE D ONLY IN THE APPELLANT HUF AND THE EXEMPTION UNDER SECTION 54 OF THE ACT SHALL BE CONSIDERED IN HUF OF THE APPELLANT, IF THE CONDITIONS OF SECTION 54 ARE FULFILLED AND AT THE SAME TIME, C APITAL GAINS ON SALE OF BANGALORE PROPERTY CANNOT BE ASSESSED IN THE ASSESSEES INDIVIDUAL HANDS. THEREFORE, WE SET ASID E THE IMPUGNED ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND RESTORE THE MATTER BACK TO THE FILE O F THE ASSESSING OFFICER TO COMPUTE THE CAPITAL GAINS IN R ESPECT OF THE BANGALORE PROPERTY IN THE HANDS OF APPELLANT HU F AND EXEMPTION IF ANY, UNDER SECTION 54 OF THE ACT SHALL BE CONSIDERED IN THE HANDS OF HUF ONLY IN ACCORDANCE W ITH LAW. THE ASSESSING OFFICER SHALL COMPLETE THE ASSESSMENT IN THE LIGHT OF THE ABOVE OBSERVATIONS. ITA NO. 1079/MDS//2013 14 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON TUESDAY, TH E 26 TH DAY OF NOVEMBER, 2013 AT CHENNAI. SD/- SD/- (DR. O.K.NARAYANAN ) (CHALLA N AGENDRA PRASAD) VICE-PRESIDENT J UDICIAL MEMBER CHENNAI, DATED THE 26 TH NOVEMBER, 2013. SOMU COPY TO: (1) MR. M.PALAN IAPPAN, C/O. S.SRIDHAR, ADVOCATE, NEW NO.14, OLD NO.82, FLAT NO.5 1 ST AVENUE, INDIRA NAGAR, ADYAR, CHENNAI-600 020. (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F.