Section 54F of the Income Tax Act, 1961 — Exemption — Mere technicality that the sale deed was executed in the name of member of the HUF rather not HUF, would not be sufficient to defeat the claim of deduction.
Facts: Being aggrieved of the order of Tribunal, Revenue went on appeal before High Court and raised the question of law that
“Whether in the facts and in circumstances of the case, the learned ITAT has erred in law and on fact in directing that the assessee is eligible for deduction u/s. 54F even when the investment in new asset was not in the name of assessee HUF contrary to provisions of section 54F of the Income Tax Act?”.
Held, that the materials on record would suggest that there was no dispute at the hands of the Revenue that the sale consideration arising out of the sale of the capital asset was used for acquisition of a new asset and that such newly acquired asset was also shown in the accounts of the HUF. Revenue's sole objection is that the sale deed was not executed in the name of the HUF but was in the name of two of the members of the HUF.
In our opinion, the Tribunal was right in coming to the conclusion that this was substantial compliance with the requirement of section 54F when neither the source of acquisition of the new capital asset nor the account of such new asset in the name of the HUF are doubted. Mere technicality that the sale deed was executed in the name of member of the HUF rather not HUF, would not be sufficient to defeat the claim of deduction. By mere names of the purchasers in the sale deed, the rights of the HUF and other members of the HUF do not get defeated. If at all, the persons' named in the sale deed hold the property of the trust for and on behalf of HUF and the other members of the HUF. In the result, Tax appeal is dismissed.[2018] 48 ITCD 60 (GUJ)