ARIJIT PASAYAT, C. J.

( 1 ) AT the instance of revenue, following question has been referred under Section 256 (1) of the Income-tax Act, 1961 (in short the Act) by the Income-Tax Appellate Tribunal Delhi Bench-B, (in short the Tribunal)

"whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that Section 54 of the Income-tax Act, 1961 applied to both an individual and a HUF. "

( 2 ) FACTUAL position essentially is as follows: The assessee is Hindu Undivided Family (in short, HUF ). Its original Karta K. C. Sahni died in 1967. His wife also died in 1970. For the assessment year in question, i. e. , 1973-74, the members of HUF were B. N. Sahni and Shri K. L Sahni, who had their own family members also. Shri B. N. Sahni was the karta at the relevant time. The family owned a house at 23, Aruangzeb Road, New Delhi. It was sold for Rs. 15. 00 lakhs by a deed of conveyance dated 26. 5. 1972. Subsequently on 15. 5. 1973, the assessee purchased another property at Hauz Khas New Delhi for Rs. 4,73,000. 00. Claim of the assessee before the assessing officer was that above amount should be allowed as deduction in the computation of capital gains in terms of Section 54 of the Act. Assessing Officer did not accept the plea stating that two conditions are required to be satisfied before the assessee could claim deduction under the above Section. First condition is that the capital which is in the form of building or land appurtenant thereto and whose income is chargeable under the head income from house property should have been used by the assessee or a parent of his mainly for the purpose of his own or the parent s own residence in two years immediately preceding the date on which the transfer took place, and second condition is that the assessee within a period of one year before or after that date should have purchased (excluding the period of construction) a house property for the purpose of his own residence. The first condition, according to the assessing officer, applied only to an individual and not to HUF. He, therefore, held that the assessee was not entitled to relief under Section 54 of the Act. Certain other factual aspects as regards actual residence was also considered and it was held that even the second condition was not satisfied. Assessee carried the matter in the matter in appeal before the Appellate Assistant Commissioner (in- short, AAC) before whom photo copies of various documents were placed to show that the house was occupied first by K. L. Sahni from June, 1973 upto 1. 1. 1975, and then it was also occupied by B. M. Sahni from 15-12-1974 till the assessment was made. These documents were letters from MCD fixing reteable value of the property, certificates from educational institutions and bills of electricity and water charges as also various letters addressed to the members of the family at Hauz Khas residence. Since such evidence was produced before the AAC for the first time, he allowed an opportunity to the assessing officer to look into it and called for a report from her. After examining the record, the AAC found that K. L. Sahni first resided at 15, Nizamuddin East which was purchased by him on 24-7-1952. After occupying it for a few months, K. L. Sahni moved to a rented house at 26 Nizamuddin East, where he lived till June, 1973, when he moved to a newly purchased Hauz Khas property. He left Hauz Khas property on 1. 1. 1975 but before that it was occupied by his brother B. M. Sahni in December, 1974. He did not find any evidence on record to suggest that the assessee had stated before the assessing officer that the above house was being used only at weekend. His conclusion was that Hauz Khas property remained occupied throughout by the members of the HUF. As regards applicability of Section 54, he held that it not only applies to individual but also to HUF. He observed that HUF was capable of residing in a house and residence by the parents was alternative concessio

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