COMMISSIONER OF INCOME TAX Vs. C CHANDRASHEKAR

JUDGEMENT

(1.) THE following question has been referred for the opinion of this Court under S. 256(1) of the IT Act, 1961 ("the Act" called shortly).

(2.) THE facts behind the legal formulation are as follows : THE assessee-HUF had an old house. That house was sold and a new house was constructed within two years thereof. THE assessee claimed exemption of capital gains amounting to Rs. 11,250 under s. 54(1) of the Act. THE ITO found that the house which was sold was not used by the assessee or his parents for residence, but it was let out. He accordingly did not allow exemption under S. 54(1) of the Act. THE assessee appealed to the AAC. It was urged in that appeal that the house which was sold was under the self- occupation of the assessee and not let out to any third person. THE appellate authority accepted that contention and directed the ITO to grant exemption under S. 54 (1) of the Act. THE Revenue appealed to the Tribunal challenging the order of the AAC. THE Tribunal dismissed the appeal. It has, however, referred the aforesaid question for the opinion of this Court.

(3.) MR. Sarangan for the assessee does not, and indeed could not, dispute the above proposition. He, however, submitted that the HUF, which is an assessee in the instant case, was the owner of the house in question and the HUF was in occupation of that house like any other individual. The concept of an HUF under the IT Act is not quite different from the concept of an HUF under the Hindu law and, indeed, both carry tile same meaning. Under the Hindu law, it is not the HUF, which is the owner of the joint family property, but the members thereof. That even if we construe the assessee as an individual, then the group of individuals like the HUF, can take the benefit of S. 54 (1). So ran the contentions of MR. Sarangan.