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2015 (11) TMI 1837 - AT - Income TaxRevision u/s 263 - Capital gain assessed in the hands of the larger HUF or in the case of the assessee member of HUF - CIT directing the Assessing Officer to disallow deduction allowed under section 54F of the Act in the hands of the assessee - CIT was of the view that sale proceeds have to be assessed in the hands of legal heirs of late A.R.Pandurangan - HELD THAT:- The assessee is one of the legal heirs of late A.R.Pandurangan who disclosed capital gains on his share after claiming deduction under section 54F of the Act. The Assessing Officer while completing the assessment called for details in respect of claim for deduction under section 54F and capital gains reported by the assessee HUF and accepted the exemption claimed under section 54F of the Act on the sale proceeds reported by the assessee HUF. The Hon’ble Andhra Pradesh High Court in the case of Addl. CIT Vs. P.Durgamma [1986 (9) TMI 58 - ANDHRA PRADESH HIGH COURT]considered the scope of section 171 of the Act deeming HUF to be undivided. In the case on hand, no evidence has been brought on record to suggest that late A.R.Pandurangan HUF has been assessed. In such circumstances, the sale proceeds of the property cannot be assessed in the hands of late A.R.Pandurangan (HUF). We also see no reason to disbelieve the memorandum of oral recording partition furnished by the assessee. Thus the contentions of the Commissioner of Income Tax that sale proceeds have to be assessed in the hands of late A.R.Pandurangan (HUF) is not sustainable in law. Thus, we set aside the order of the Commissioner of Income Tax passed under section 263 and restore that of the Assessing Officer since the assessment order cannot be said to be erroneous and prejudicial to the interests of the Revenue. - Decided in favour of assessee.
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