2018 (9) TMI 1700

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....54F even when the investment in new asset was not in the name of assessee HUF contrary to provisions of section 54F of the Income Tax Act?". 2. At the outset, counsel for the Revenue submitted that though the tax effect involved is very low, the appeal is filed since it arises out of audit objection. Be that as it may, we have heard counsel for the Revenue on merits. 3. Respondent-assessee is Hindu undivided family ['HUF' for short]. For the assessment year 2009-10, in the return filed by the HUF, the question of exemption of capital gain in terms of section 54F of the Income Tax Act, 1961 ['the Act' for short] came-up for consideration. Brief facts were that the assessee held a capital asset which was sold for conside....

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....in substance and in effect belong to the HUF." 5. The Tribunal thereafter generally discussed the law concerning HUF in following terms: "We take note of the plea on behalf of the assessee that the Hindu Law does not recognise a joint Hindu family or coparcerners as a juristic personality capable of holding property and as an entity separate from the members of the HUF collectively own the property of the HUF by holding an equivalent interest. A HUF cannot sue or be sued in the joint family name and cannot convey the property held by it in its joint character. The HUF has a separate and distinctive status as an assessable entity for the limited purpose of Income Tax Act alone. Therefore it is natural that the property of the HUF....

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.... 8. In our opinion, the Tribunal was right in coming to the conclusion that this was substantial compliance with the requirement of section 54F of the Act when neither the source of acquisition of the new capital asset nor the account of such new asset in the name of the HUF are doubted. Mere technicality that the sale deed was executed in the name of member of the HUF rather not HUF, would not be sufficient to defeat the claim of deduction. By mere names of the purchasers in the sale deed, the rights of the HUF and other members of the HUF do not get defeated. If at all, the persons' named in the sale deed hold the property of the trust for and on behalf of HUF and the other members of the HUF. 9. In case of Vipin Malik (HUF) (sup....