The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the Hindu Undivided Family (HUF) would be eligible for capital gain exemption under Section 54B of the Income Tax Act 1961 from 01/04/2013.
The assessee, Satyawan, had sold 4 Kanal of agricultural land, jointly for the assessee’s share. The appropriate amount had been invested in the purchase of agricultural land in the name of Geeta Devi.
The issue examined was whether the agricultural land which the ancestral property was belonging to HUF and its subsequent sale and purchase of another agricultural land by the wife was eligible for deduction or not.
The land in the hand of grandfather Rati Ram was ancestral in nature (well reflected in Cizra) and devolved upon the father of assessee Dharam Singh by natural succession before the passing of the Hindu Succession Act, 1956.
Amit Koshik appeared on behalf of the assessee and Ramdhan Meena, appeared on behalf of the revenue.
The two-member Bench of Dr. B. R. R. Kumar, (Accountant Member) Yogesh Kumar US, (Judicial Member) observed that Section 54B of the Income Tax Act was amended by Finance Act, 2012, having its effect from 01.04.2013.
The HUF had specifically been incorporated by replacing the word “the assessee being an individual or a parent of his” with the words “the assessee being an individual or parents or Hindu Undivided Family” for agricultural purposes in the statute w.e.f. 01.04.2013.
As the Amended provisions were applicable for the computation of Income for A.Y . 2013-2014 the Bench held that the assessee also included the HUF. The Bench allowed the appeal filed by the assessee holding that exemption under Section 54B Tax Act of the Income After amendment is available to HUF also.
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