B.P. Jeevan Reddy, J.
1. Two questions are referred by the Income-tax Appellate Tribunal to this court under section 256(1) of the Income-tax Act, which read thus :
'1. Whether, on the facts and the circumstances of the case, the Income-tax Appellate Tribunal was legally right in permitting the respondent-Income-tax Officer to raise before it in an appeal filed by the assessee an entirely new plea for the first time to sustain an assessment on the capital gains derived on the sale of the assessee's residential house
2. Whether, in any event, and on the facts and in the circumstances of the case, the capital gains derived on the sale of the assessee's residential house is exempt under section 54 of the Income-tax Act, 1961 ?'
2. The relevant facts are that the assessee is a Hindu undivided family. It owned a house at Nellore which was an ancestral property, which it sold for a sum of Rs. 1,65,000 in the year 1975. In the assessment proceedings for the assessment year 1976-77, the assessee claimed exemption in respect of the capital gains arising from the sale of the above property under section 54 of the Income-tax Act. It was submitted that the assessee has purchased another property for a sum of Rs. 1,10,000 within one year of the sale and, therefore, it is exempted from the capital gains tax under section 54 of the Income-tax Act. This plea was rejected by the Income-tax Officer and the Appellate Assistant Commissioner on the ground that the purchase of the property was made beyond one year. It was pointed out that while the sale deed was executed on December 4, 1975, the assessee purchased another property under the deed dated December 9, 1976, which is clearly beyond one year. When the matter came to the Tribunal, the Tribunal held, following the decisions of the Madras and Calcutta High Courts, that the expression 'within one year' as occurring in section 54 of the Act must be construed as within the next calendar year. On the basis, it was of the opinion that the requirement of purchasing another property within one year was satisfied. But yet it dismissed the appeal on the ground that the assessee being a Hindu undivided family, it cannot take advantage of section 54 of the Act. This argument was urged for the first time by the Revenue at the stage of the Tribunal only and it was allowed to be raised and upheld. Hence, the aforesaid two questions are referred to.
3. So far as the legal proposition that the Hindu undivided family is not entitled to have the benefit of section 54 of the Act is concerned, it appears to be beyond any doubt. Section 54 of the Income-tax Act reads thus :
'Where a capital gain arises from the transfer of a capital asset to which the provisions of section 53 are not applicable, being buildings or lands appurtenant thereto the income of which is chargeable under the head 'Income from house property', which in the two years immediately preceding the date on which the transfer took place, was being used by the assessee or a parent of his mainly for the purposes of his own or the parent's own residence, and the assessee has within a period of one year before or after that date purchased, or has within a period of two years after that date constructed, a house property for the purposes of his own residence, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say, -
(i) if the amount of the capital gain is greater that the cost of the new asset, the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil; or
(ii) if the amount of the capital gains is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be the cost shall be reduced by the amount of the capital gain.'
4. The words 'the assessee or a parent of his' clearly mean that this section is applicable only to individuals and not to other persons. It is also the view taken by the two other High Courts, viz., the Madhya Pradesh High Court in Shrigopal Rameshwardas v. Addl. CIT : [1979]119ITR980(MP) , Kanhyalal and Ramswaroop v. CIT : [1984]149ITR157(MP) and Smt. Rampyaribai Narayandas v. CIT : [1984]147ITR223(MP) and the Karnataka High Court in CIT v. C. Chandrashekar : [1984]145ITR429(KAR) . Indeed, this position was not challenged by learned counsel for the assessee. However, learned counsel contended that the assessee should not be allowed to raise the contention that half the interest in the said house is the separate property of the karta of the Hindu undivided family in as much it had devolved upon him on the death of his father under section 8 of the Hindu Succession Act. It is pointed out that there was a partition between him and h is father during the lifetime of his father and that in that partition he got half the house and that the other half devolved upon him on the death of his father under section 8 of the Hindu Succession Act. Relying upon the decision of the Supreme Court in CWT v. Chander Sen : [1986]161ITR370(SC) and of the Madhya Pradesh High Court in Smt. Prabha Rajya Lakshmi v. WTO : [1983]144ITR180(MP) , it is contended that the property devolving upon him under section 8 of the Hindu Succession Act is his separate property. It is also submitted that because the legal position w as not clear at the time of filing the return, this distinction was not put forward and the return was filed as Hindu undivided family and the matter was proceeded on that basis.
5. We are, however, not satisfied that the assessee should be allowed to go back and change the very return which he has filed and change the entire basis of the assessment. It may be noted that even before the Tribunal, the present contention was not urged. Even before the Tribunal the contention was that the assessee is a Hindu Undivided family but the argument was that since the Hindu undivided family consists of only one coparcener and the other members thereof are only the wife of the karta and two unmarried minor daughters, he is entitled to have the advantage of section 54 of the Act. This was not accepted by the Tribunal holding that the status of the assessee was never in dispute, viz., Hindu undivided family. In such a situation, we do not think it is open to us in this reference to permit the assessee to reopen the assessment from the stage of the filing of the return and change the entire basis of the proceedings taken till now. It can neither be permitted by this court nor can it be done by the Tribunal under section 260 of the Act.
6. For the above reasons, both the questions referred are answered in the affirmative, i.e., in favour of the Revenue and against the assessee. There shall be no order as to costs.