The Tax Publishers2020 TaxPub(DT) 2292 (Bang-Trib) : (2020) 182 ITD 0121

INCOME TAX ACT, 1961

Section 250(6)

The question as to whether property was HUF property or that of assessee in his individual capacity was fundamental and vital because without deciding same it would not be possible to decide other questions as to whether property was capital asset or the question of correctness of computation of capital gain and question as to whether deduction under section 54F was to be allowed as claimed by assessee. Accordingly, matter was remanded to CIT(A) to decide the same afresh as CIT(A) proceeded on mere technicalities that assessee had not revised return of income filed in the individual capacity and further HUF did not file return of income in the status of HUF within time required in law.

Appeal [CIT(A)] - Order of CIT(A) - CIT(A) did not decide the fundamental and vital aspect -

Assessee preferred appeal before CIT(A) claiming that property sold belonged to HUF and therefore, the capital gain on sale of such property, could be assessed only in the hands of HUF, and not in the individual hands of assessee. CIT(A) without deciding correctness of claim made by assessee in law, proceeded not to decide the issue by merely holding that the claim of the assessee could not be examined because assessee had not revised return of income filed in the individual capacity and further HUF did not file return of income in the status of HUF within time required in law. Held: It was incumbent upon CIT(A) to have decided the issue in accordance with law rather than on technicalities. It is fundamental that right income has to be assessed in the right hands and the question as to whether property was HUF property or that of assessee in his individual capacity was fundamental and vital because without deciding same it would not be possible to decide other questions as to whether property was capital asset or the question of correctness of computation of capital gain and question as to whether deduction under section 54F was to be allowed as claimed by assessee. Accordingly, matter was remanded to CIT(A) to decide the same afresh.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2006-07

IN THE ITAT, BANGALORE 'B' BENCH

N.V. VASUDEVAN, V.P. & A.K. GARODIA, A.M.

K.R. Rajashekar Reddy v. Dy. CIT

IT Appeal No. 21 (Bang.) of 2011

A.Y. 2006-07

22 January, 2020

Matter remanded

Appellant by: V. Chandrashekhar, Advocate

Respondent by: S. Tamil Selvam, JCIT

ORDER

N.V. Vasudevan, V.P.

This is an appeal by the assessee against the Order, dated 11-10-2010 of Commissioner (Appeals)-II, Bangalore, relating to assessment year 2006-07.

2. The only issue that arises for consideration in this appeal is as to whether the revenue authorities were justified in bringing to tax capital gain on sale of a property in the hands of the assessee. If the answer to the above issue is in the affirmative, then the next issue to be decided would be whether the land which was subject matter of transfer could be said to be capital asset and whether the capital gain on sale of the said land is exigible to tax on capital gain. If the answer to the above issue is in the affirmative then the further issue that needs to be decided is as to whether the computation of capital gain by the revenue authorities is proper and as to whether Assessee would be entitled to the benefit of deduction under section 54F of the Income Tax Act, 1961 (Act).

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