C.I.T RTK vs. VARINDER NATH

PDF · subscribers
ITR/58/1991HC Punjab & HaryanaPHHC01024533199130 October 2006Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE RAJESH BINDAL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the assessee-HUF was not entitled to exemption under Section 54B(1) of the Income Tax Act, 1961. The Court followed its own earlier judgment in Raghunath Dass Sethi v. CIT, (2005) 277 ITR 341, which in turn followed the Delhi High Court's decision in CIT v. KC Sahni (HUF), (2000) 246 ITR 299. These judgments established that prior to the amendment in 1988, the benefit of Section 54 of the Act was not available to an HUF. The Court also noted that various other High Courts, including Madhya Pradesh, Andhra Pradesh, Gujarat, and Rajasthan, had expressed a similar view. Therefore, the question referred was answered in favour of the revenue and against the assessee. The reference was disposed of accordingly.

What were the facts?

The Commissioner of Income Tax, Rohtak (Revenue) has filed a reference application before the High Court of Punjab and Haryana at Chandigarh against an order dated 30.11.1990 passed by the Income Tax Appellate Tribunal 'B' Bench, New Delhi. The appeal before the Tribunal was in ITA No.3426/Del./1988 concerning assessment year 1979-80. The dispute pertains to whether the assessee, a Hindu Undivided Family (HUF), was entitled to exemption under Section 54B(1) of the Income Tax Act, 1961. The amount in dispute is not specified. The High Court is asked to opine on the correctness of the Tribunal's decision.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the assessee-HUF will be entitled to exemption under section 54B(1) of the Income Tax Act, 1961? Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, the fact that the Tribunal granted the exemption implies the assessee argued for its eligibility. Revenue's Contention: The revenue relies on the judgment of the Madras High Court in CIT v. R.Vijayakumar, (1995) 214 ITR 483, and its earlier judgment in CIT v. GK Devarajulu, (1991) 191 ITR 211, to argue that Section 54B of the Income Tax Act, 1961, was not available to an HUF and was only available to an individual.

Which sections of the Income-tax Act were involved?

Section 54B,Section 54

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
ITR No.58 of 1991 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITR No.58 of 1991 Date of decision:30.10.2006 The Commissioner of Income tax, Rohtak ....Petitioner versus Shri Virender Natha Kataria, Railway Road, Panipat. ....Respondent CORAM: HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE RAJESH BINDAL Present: Mr. Yogesh Putney, Advocate, for the revenue.

JUDGMENT: Following question has been referred for opinion of this Court by the Income Tax Appellate Tribunal 'B' Bench, New Delhi (for short, 'the Tribunal) arising out of its order dated 30.11.1990 in ITA No.3426/Del./1988, in respect of assessment year 1979-80:- “Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal, was right in holding that the assessee-HUF will be entitled to exemption under section 54 B(1) of the Income Tax Act, 1961?” Learned counsel for the revenue relies upon judgment of the Madras High Court in CIT v. R.Vijayakumar, (1995) 214 ITR 483, holding that provision of Section 54B of the Income Tax Act, 1961 (for short, 'the Act') was not available to HUF and was available only to an individual. Reliance was also placed on its earlier judgment in CIT v. GK Devarajulu, (1991) 191 ITR 211. We find that an identical issue has already been gone into by ITR No.58 of 1991 2 this Court in Raghunath Dass Sethi v. CIT, (2005) 277 ITR 341, wherein following the judgment of Delhi high Court in CIT v. KC Sahni (HUF), (2000) 246 ITR 299, it was held that prior to amendment in the year 1988, the benefit of Section 54 of the Act was not available to the assessee, which is HUF. Similar view has been expressed by various High Courts in Kanhyalal and Ramswaroop v. CIT, (1984) 149 ITR 157 (MP), Shrigopal Rameshwardas v. Addl.Commissioner of Income Tax, MP, (1979) 119 ITR 980 (MP), Smt.Rampyaribai Narayandas v. CIT, MP, Bhopal, (1984) 147 ITR 223 (MP), Anam Venkata Krishna Reddy v. CIT, (1988) 172 ITR 425 (AP), Ravindra Gunvantlal Shah v. CIT, (1994) 208 ITR 995 (Guj.) and Pravin Chand Mohin Kumar v. CIT, (1994) 208 ITR 11 (Raj.). Concurring with the view already expressed by this Court in Raghunath Dass Sethi's case (supra). None appears for the assessee. Following the above view, we answer the question in favour of the revenue and against the assessee. Reference is disposed of accordingly. (Adarsh Kumar Goel) Judge October 30, 2006 (Rajesh Bindal) 'gs' Judge

More judgments on Section 54B

All 814 judgments and leading authorities on Section 54B →

Recent GST High Court judgments

Search GST case law →