2015 (9) TMI 1690

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....hat the assessee has sold an immovable property for a sum of Rs. 31 lakhs on 1.7.2008. When enquired about the same it was noticed that the assessee along with other co-owners has sold an ancestral property purchased by his Grand-father and the share of the assessee in the sale consideration came to Rs. 6 lakhs. Before the AO, the assessee contended that the capital gain is assessable in the hands of his HUF. However, the AO held that the capital gain is assessable in the individual capacity. Since the assessee has inherited the ancestral property, the AO took the cost of acquisition as NIL. Accordingly, the AO assessed the entire amount of Rs. 6 lakhs in the hands of the assessee. The ld. CIT(A) also confirmed that the capital gain is asse....

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....ry, the ld. DR submitted that the assessee has not declared capital gain in the hands of HUF and hence the assessee should not make such a claim at this stage. He further submitted that the conveyance of the property would get concluded only upon completion of registration formalities, which in this case got completed on 1.7.2008. Accordingly he submitted that the capital gain is assessable during the year relevant to the assessment year 2009-10. With regard to the market value as on 1.4.1981, the Ld. DR submitted that the ld. CIT(A) was fair enough to estimate the value of property at Rs. 1 lakh. 6. We have heard the rival contentions and perused the record. Admittedly, the conveyance deed was executed on 31.3.2008 and the same was regist....

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....m on the reasoning that the HUF has not filed return of income and hence the capital gain should be assessed in the individual hands. In our view, the approach of the tax authorities cannot be uphold in view of the decision of Hon'ble Supreme Court in the case of Ch. Atchian (218 ITR 239)(SC), wherein the Hon'ble Apex Court has observed as under:- "He (here the ITO) can, and he must, tax the right person and the right person alone. By right person, we mean the person who is liable to be taxed, according to law, with respect to a particular income." Hence, merely because the HUF of the assessee has not filed return of income, the assessing officer cannot assess the capital gain in the hands of the assessee in his Individual status. Since ....