TMI Blog2015 (10) TMI 2043X X X X Extracts X X X X X X X X Extracts X X X X ..... rty, 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was disallowed and added to his income because the assessee has neither purchased any residential property in its own name, nor constructed any residential property in its own name within the prescribed limit u/s 54 of the Act. 4. The A.O. has disallowed the standard deduction of ₹ 27,600/- u/s 24 of the Act, interest on borrowed capital of ₹ 1.50 lacs u/s 80C rebate and ₹ 34,011/- on the ground that new residential property is not in the name of assessee and loan from ICICI bank is also not sanctioned in the name of assessee and thereby assessed a total income of ₹ 46,99,328/-. Separate penalty proceedings u/s 271(1)(c) read with Section 274 of the Act have been sought to be initiated for concealing / furnishing inaccurate particulars of income. 5. The assessment order has been challenged by the assessee by way of appeal before Ld. CIT(A) New Delhi and the appeal was partly allowed. Feeling aggrieved, the revenue has come up before the Tribunal by filing the present appeal. 6. The sole question arises for determination in this case is, as to whether Ld. CIT(A) has erred in deleting the disallowance of exemption of ₹ 43,39,328/- claimed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stively sets out these facts and we reproduce the same below:- 12. We have considered the rival submissions and also perused the relevant material on record. It is observed that the claim of the assessee for exemption under Section 54F was disallowed by the authorities below on various grounds. First of all, it was held by the AO that the investment claimed to have been made by the assessee in the residential property/flat in Kanungo Cooperative Group Housing Society Ltd. was not in its name but the same was in the joint name of two individual viz., Smt. Chanan Devi Sachdeva and Shri Vipin Malik. Before us, the learned DR has strongly supported and substantiated this ground given by the AO for disallowing the claim of the assessee for deduction u/s 54F by referring to the various certificates and receipts issued by the said society wherein the names of individuals were appearing without any indication of HUF. The learned counsel for the assessee, on the other hand, has relied on the possession certificate issued by the society on 30.4.2000 wherein both the individual names were appearing with Shri Vipin Malik being mentioned as Karta of M/s Vipin Malik, HUF. He has also con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said certificate as well as keeping in view the fact that all the letters, certificates and receipts issued by the said society earlier did not contain any reference to HUF, we find it difficult to accept the stand of the assessee that the membership in the said society was held by it in the capacity of HUF and the investment made in construction of the said property was in its own name. On the contrary, the documentary evidence placed on record clearly shows that the said membership was standing in the joint name of Smt. Chanan Devi Sachdeva and Shri Vipin Malik in their individual capacity and an attempt to show the same as held on behalf of the HUF on the basis of possession certificate was clearly made as an afterthought to claim deduction u/s 54F from the capital gain arising from sale of property belonging to HUF. 10. The Ld. D.R. also relied upon the judgement of the Hon'ble High Court of Rajasthan at Jaipur Bench, Jaipur in the case of Shri Kalya Vs CIT and Others (supra) wherein it has been held that:- 7. A bare reading of Section 54B of the Income Tax Act does not suggest that assessee would be entitled to get exemption for the land purchased by him in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F 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. ii) that 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. iii) that 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. iv) that 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 state ..... X X X X Extracts X X X X X X X X Extracts X X X X
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