TMI Blog2011 (8) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal - The tax case appeal stands dismissed. No costs. - 232 of 2005 - - - Dated:- 8-8-2011 - MRS.JUSTICE CHITRA VENKATARAMAN, MR.JUSTICE M.JAICHANDREN, JJ. For Appellant: Mr.J.Naresh Kumar For Respondent: Mr.N.Devanadhan JUDGMENT CHITRA VENKATARAMAN, J. Following are the questions of law raised by the Revenue in the appeal relating to the assessment year 1999-2000: "1.Whether in the facts and circumstances of the case, the Tribunal was right in holding that the sale of the property by a dealer in real estate should be treated as capital gains? 2. Whether in the facts and circumstances of the case, the Tribunal was right in treating the property as a capital asset on the ground that the interest o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the constitution of the partnership. The partnership thus entered, on 1.4.1991, was dissolved on 10.7.1999. 5. On dissolution, the assessee, an HUF, got back the properties. One of the clauses in the dissolution agreement stated that the HUF would carry on and continue the business in the name and style of "M/s.Mahalakshmi Constructions" either by itself as Palanichamy, HUF or by taking one or more persons in partnership. The assesssee developed the properties during the assessment year 1995-1996 and declared the income, under the head capital gains. 6. During the process of assessment, the Assessing Officer noted that the Kartha of the assessee, Palanichamy, in his individual capacity was doing real estate business and so too t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the HUF was the owner of the property. The Tribunal further pointed out that the interest on borrowal for acquiring the property was capitalised in all the earlier years. Taking note of all these the Tribunal had allowed the assessee's claim to treat the receipts to capital gains. Hence the present appeal by the Revenue. 10. As pointed out by the Tribunal, the property which was offered as the HUF contribution in the firm was the property of the HUF and on disssolution it returned back to the HUF. The mere fact that the Kartha in his individual capacity and his wife were carrying on business in the real estate by itself does not lead to an interference that the HUF was holding the property only as a trading asset for the purpose o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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