Recently, the Jaipur bench of the ITAT has held that the sale of land belongs to HUF after the death of Karta was rightly assessed in the hands of it consisting of the remaining members.
While dismissing an appeal filed by the assessee, the bench clarified that though the assessment has been completed against the HUF in the name of the deceased Karta, the liability will be on the other members of the HUF in the capacity of HUF.
The assessee, M/s Amarchand, has sold their ancestral agricultural land after the death of Mr. Amarchand. Initially, the assessment was made in the hands of the individual members of the HUF which was later quashed by the ITAT. On further proceedings, the assessment has been completed in the hands of HUF known as Amarchand. The AO held that after the death of Sh. Amarchand, the property continues to a property belonging to the HUF and since there is no partition of HUF and as the same has been sold jointly by all the surviving members of the HUF, the same was subject to hands in the hands of the HUF. The HUF which is brought to tax is represented by Karta Sh. Sukhdev and consisting of other members namely Smt Chuni Devi, Sh. Babulal , Jeevanal and Netrapal. Though the which is still called and represented as Amarchand but after his death. The assessee contended that the proceedings, initiated in the name of Shri. Amarchand, are liable to be dropped on ground that Sh. Amarchand who has expired on 15.5.1995 has no occasion to sell the agricultural land during the subject year under consideration.
Upholding the Assessment order, the bench said that though the HUF is still called and represented as Amarchand but after his death, he was no more (and could not be) the karta/ coparcener/member.
Dismissing the appeal, the bench observed that the Assessing Officer has not disputed the fact that Sh. Amarchand had expired on 15.05.1995 and there was no occasion to sell the land by him in his individual capacity. It is also not in dispute that the land was sold by Sh. Babu Lal along with his 3 brothers and his mother Smt. Chunni Devi.
It was noted that what has been sold was ancestral agricultural land which belongs to the HUF and it has been brought to tax in the hands of HUF after the death of Sh. Amarchand. “There is no partition of HUF and there is no finding of any partition given by the Assessing Officer u/s 171 of the Act. After the death of Sh. Amarchand, HUF continues to exists and represented by his elder son Sukh dev who became the Karta of HUF and the other coparceners are Smt. Chunni Devi wife of Late Sh. Amarchand, and Sh. Babu Lal, Sh. Ganpat lal and Sh. Netrapal, all sons of Late Sh. Amarchand. Though the HUF is still known as M/s Amarchand HUF, in essence, it is the HUF which consists of Sh. Sukh dev as Karta and coparceners are Smt. Chunni Devi, Sh. Babu Lal, Sh Ganpat lal and Sh. Netrapal. The assessment, therefore, has rightly been done in the name of HUF consisting of above said persons.”
Read the full text of the Order below.
