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of <h1>Court Affirms Hindu Undivided Families' Shares, Denies Tax Benefit</h1> <h3>Commissioner Of Income-Tax Versus Gordhandas Vallabhdas Kapadia And Others</h3> The court affirmed the smaller Hindu undivided families' individual shares in the property but denied them the benefit under section 54 of the Income-tax ... Capital Gains, Exemptions, HUF Issues:1. Partition of property among smaller Hindu undivided families.2. Entitlement of Hindu undivided families to benefit under section 54 of the Income-tax Act, 1961.Analysis:Issue 1: Partition of property among smaller Hindu undivided familiesThe case involved a bigger Hindu undivided family with a property on Walkeshwar Road. After the death of the karta, the property came into the hands of his son and grandsons. Subsequently, a partition was carried out in which each member received a 1/7th share. The smaller Hindu undivided families sold their shares and reinvested the capital gains in new residential properties. The Revenue authorities initially held that the entire property belonged to the bigger Hindu undivided family, but the Tribunal accepted the contention of the smaller families regarding their individual shares. The court upheld the Tribunal's decision, stating that only 5/8ths portion of the property belonged to the bigger family after the widow's death.Issue 2: Entitlement of Hindu undivided families to benefit under section 54The question arose whether the Hindu undivided families were entitled to the benefit under section 54 of the Income-tax Act, which was argued by the Revenue to be available only to individual-assessees. The Tribunal had allowed the benefit to the Hindu undivided families, but the court disagreed, stating that the benefit under section 54 could only be granted to an individual-assessee, not to a Hindu undivided family-assessee. Therefore, the court ruled in favor of the Revenue on this issue.In conclusion, the court answered the questions posed by the Revenue, affirming the smaller Hindu undivided families' share in the property but denying them the benefit under section 54 of the Income-tax Act.
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