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2015 (10) TMI 2043 - AT - Income TaxDisallowance of exemption u/s 54 & 54F - registration of new property in the name of individual or HUF? - CIT(A) aalowed claim - Held that:- The facts of this case are squarely covered by the judgement of Vipin Malik (HUF) (2009 (8) TMI 33 - DELHI HIGH COURT) wherein it has been categorically held that when the property is not purchased with the sale proceeds of HUF property in the name of HUF itself, the assessee is not entitled for benefit of exemption u/s 54F of the Act. Since in the instant case the property was also not purchased with the sale proceeds of HUF property, the assessee is not entitled for benefit u/s 54F of the Act. Since Shri Sunil Arora and Mrs. Vaishali Arora vendee of sale deed dated 03.06.2008 of the property at Sushant Lok, Phase I, have become absolute owner in their individual capacity, they are estopped by their own act and conduct from ceremonially declaring the said property as HUF property apparently for claiming tax benefit. Merely because of the fact that part of sale proceeds of HUF property have been invested in purchasing the Sushant Lok Property, the same cannot be treated as HUF property in any manner whatsoever. Because substantial part of investment on the purchase of new property, that too in the individual name of Sunil Arora and his wife Smt. Vaishali Sunil, have been made from other sources. Merely because of the fact that the property purchased is recorded as the asset in the statement of affairs of HUF and the loan from ICICI bank as a liability, the same cannot be considered as HUF property as the same was never purchased by Sunil Arora (HUF) and the statement of affairs is a document prepared by the assessee as an afterthought to claim exemption u/s 54F of the Act. In the instant case, assessee is strictly Sunil Arora HUF when the capital gain has been invested to purchase the other property in the individual names of Sunil Arora and Vaishali Sunil to the prejudice of other members of HUF, no benefit u/s 54F can be extended. he intention of legislature to legislate Section 54 and 54F is to ensure the reinvestment of funds in residential property by the assessee itself. But in the instant case, basic condition to get the benefit of Section 54 and 54F has not been complied with as the funds raised from the sale proceeds of HUF property have been invested by the members to purchase the property in their individual names, which does not fall in the category of assessee i.e. Sunil Arora (HUF) - Decided against assessee.
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