Estate of Late V.S. Thiagaraja Mudaliar vs Commissioner of Income Tax

K. Raviraja Pandian, J.—The question referred to us at the instance of the assessee is,--

Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the assessee-HUF was not entitled to

exemption u/s 54 of the Act?

The assessment year is 1976-77.

The appellant is Hindu Undivided Family of which one Thiagaraja Mudaliar was the only surviving male member. During the previous year relevant

to the present assessment year the assessee sold a property and claimed relief u/s 54(1) of the income tax Act in respect of the long-term capital

gains arising therefrom. The Assessing Officer denied the claim on the ground that section 54(1) of the Act was applicable at the relevant time to an

individual only and not to a Hindu Undivided Family. On appeal, the Commissioner (Appeals) confirmed the order of Assessing Officer and on

further appeal to the Tribunal, the Tribunal found in favour of the revenue. Hence, the present reference at the instance of the assessee.

When the matter was taken up for hearing learned counsel for the assessee as also the learned counsel for the revenue submitted that the issue

involved in the present case is covered by the decision of this Court in the case of Commissioner of Income Tax Vs. N. Kannayiram, wherein the

question was answered in favour of the assessee. Following the said decision, the question referred to us is answered in favour of the assessee and

against the revenue.