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Section 54 (prior to 1-4-1988) of the Income-tax Act, 1961 - Capital gains - Profit on sale of property used for residential purpose - Whether prior to its amendment with effect from 1-4-1988, benefit of section 54 was not available to assessee which was a HUF - Held, yes CASE REVIEW CIT v. K.C. Sahni (HUF) [2000] 246 ITR 299/137 Taxman 358 (Delhi) followed and relied upon. CASES REFERRED TO CIT v. K.C. Sahni (HUF) [2000] 246 ITR 299/113 Taxman 358 (Delhi) (Para 7). D.S. Patwalia for the Applicant. ORDER N.K. Sud, J. - At the instance of the assessee, the Income-tax Appellate Tribunal, Amritsar, ("the Tribunal") has referred the following question of law arising out of its order dated 26-2-1983 for assessment year 1976-77, for the opinion of this Court. "Whether, in view of the facts and circumstances of the case, the Hon'ble Income-tax Appellate Tribunal was justified in holding that section 54 applies exclusively to individuals only and not to HUFs, particularly when the Finance Act, 1982 made a change in the law with regard to the applicability of section 54 to individuals w.e.f. 1-4-1983?" 2. The assessee, a Hindu Undivided Family (HUF) had a residential house at Swank Mandi, Amritsar. In April, 1975, it purchased another house at Dhab Khatikan at Amritsar and shifted into the same soon after the purchase. The old house at Swank Mandi was sold in February, 1976 for a sum of Rs. 40,000. The Income-tax Officer worked out a capital gain of Rs. 29,475 which was charged to income-tax for the assessment year 1976-77. The assessee did not accept the liability as according to him, no capital gain had arisen from the sale of Swank Mandi house in view of the exemption available under section 54 of the Income-tax Act, 1961 (for short, "the Act"). This claim was rejected by the Assessing Officer on the ground that since the family had already started living in the new house, the exemption under section 54 of the Act was not available as it could be considered that the family had abandoned the old house at Swank Mandi and it was not used by it. Assessee preferred an appeal before the Appellate Assistant Commissioner of Income-tax, who videorder dated 22-1-1982 allowed…

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