M N Navale (Bigger HUF), Pune V. Addl. CIT, Central, Range-2, Pune

ITA 1003/PUN/2012

• Counselvise Citation: 100324514 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2001-2002
• Appeal Filed On: 18-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DOSHI
• Keywords: Unexplained investment; Opportunity of being heard
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.1001/PN/2012 (ASSESSMENT YEAR : 2007-08) M.N. NAVALE SINHGAD TECHNICAL EDUCATION SOCIETY, CAMPUS, VADGAON (BK), PUNE 411 041 PAN : AAIPN0909R . APPELLANT VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2 (2), PUNE. . RESPONDENT ITA NO.1002/PN/2012 (ASSESSMENT YEAR : 2008-09) M.N. NAVALE SINHGAD TECHNICAL EDUCATION SOCIETY, CAMPUS, VADGAON (BK), PUNE 411 041 PAN : AAIPN0909R . APPELLANT VS. ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2 (2), PUNE. . RESPONDENT ITA NO.1003/PN/2012 (ASSESSMENT YEAR : 2001-02) M.N. NAVALE (BIGGER HUF) SINHGAD TECHNICAL EDUCATION SOCIETY, CAMPUS, VADGAON (BK), PUNE 411 041 PAN : AAEHN1259C . APPELLANT VS. ADDL. COMMISSIONER OF INCOME TAX CENTRAL, RANGE 2, PUNE. . RESPONDENT ITA NOS.1004 TO 1009/PN/2012 (ASSESSMENT YEARS : 2002-03 TO 2007-08) M.N. NAVALE (BIGGER HUF) SINHGAD TECHNICAL EDUCATION SOCIETY, CAMPUS, VADGAON (BK), PUNE 411 041 PAN : AAEHN1259C . APPELLANT VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2 (2), PUNE . RESPONDENT ITA NOS.1001 TO 1010/PN/2012 A.YS. 2001-02 TO 2008-09 ITA NO.1010/PN/2012 (ASSESSMENT YEAR : 2008-09) M.N. NAVALE (SMALLER HUF) SINHGAD TECHNICAL EDUCATION SOCIETY, CAMPUS, VADGAON (BK), PUNE 411 041 PAN : AAKHM0881K . APPELLANT VS. ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2 (2), PUNE. . RESPONDENT APPELLANT BY : MR. S. N. DOSHI RESPONDENT BY : MS. ACHAL SHARMA DATE OF HEARING : 24-07-2013 DATE OF PRONOUNCEMENT : 24-07-2013 ORDER PER G. S. PANNU, AM THE CAPTIONED TEN APPEALS RELATE TO THREE DIFFEREN T ASSESSEES BELONGING TO ONE FAMILY AND INVOLVE CERTAIN COMMON ISSUES, TH EREFORE, THEY HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. FIRST, WE SHALL TAKE-UP APPEALS IN ITA NOS. 1003 TO 1009/PN/2012 IN THE CASE OF M.N. NAVALE (BIGGER HUF) PERTAINING TO THE ASSESSMENT YEARS 2001-02 TO 2007-08. THE SAID APPEALS ARE DIRECTED A GAINST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) CENTRAL, PUNE DATED 12.03.2012 WHICH, IN TURN, HAVE ARISEN FROM THE ORD ERS OF THE ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECTION 148 REA D WITH SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) FOR A SSESSMENT YEARS 2001-02 TO 2006-07 AND UNDER SECTION 143(3) OF THE ACT FOR ASS ESSMENT YEAR 2007-08. 3. THE COMMON POINT IN ALL THESE APPEALS IS THE GRI EVANCE OF THE ASSESSEE AGAINST THE ACTION OF THE ASSESSING OFFICER IN ASSE SSING THE INCOME IN THE HANDS OF THE ASSESSEE HUF ON PROTECTIVE BASIS WHI LE ASSESSING THE INCOME ITA NOS.1001 TO 1010/PN/2012 A.YS. 2001-02 TO 2008-09 IN THE HANDS OF SHRI M.N. NAVALE (INDIVIDUAL) ON SU BSTANTIVE BASIS. THE GRIEVANCE OF THE ASSESSEE IS THAT THE INCOMES DECLA RED BY THE ASSESSEE IN THE RESPECTIVE RETURNS OF INCOME BE ASSESSED IN ITS HAN DS ON SUBSTANTIVE BASIS. THE SECOND GRIEVANCE OF THE ASSESSEE IS THAT THE AS SESSING OFFICER HAS WRONGLY TREATED THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE AS INCOME FROM OTHER SOURCES IN ALL THE YEARS. 4. THE ASSESSING OFFICER HAS MADE THE PROTECTIVE AS SESSMENT PRIMARILY ON THE GROUND THAT THE HUF I.E. M.N. NAVALE (BIGGER HUF) DID NOT EXIST. THE SAID HUF HAD FILED AN APPLICATION UNDER SECTION 171 OF THE ACT ON 04.09.2007 CLAIMING TOTAL PARTITION OF THE PROPERTIES ON THE S TRENGTH OF A COMPROMISE DECREE OF PARTITION PASSED BY THE COMPETENT CIVIL C OURT, PANDHARPUR. THE ASSESSING OFFICER WHILE DEALING WITH THE SAID APPLI CATION VIDE ORDER DATED 06.12.2007 HELD THAT THE SAID HUF DID NOT EXIST A ND NOR OWNED ANY PROPERTIES, AS CLAIMED IN THE PARTITION DEED. AS A CONSEQUENCE OF THE SAID ORDER, IN THE AFORESTATED ASSESSMENT PROCEEDINGS, T HE ASSESSING OFFICER ASSESSED THE INCOME DECLARED BY M.N. NAVALE (BIGGER HUF) IN ITS RESPECTIVE RETURNS OF INCOME ON PROTECTIVE BASIS WHILE TAXING SUCH INCOME ON SUBSTANTIVE BASIS IN THE HANDS OF SHRI M.N. NAVALE (INDIVIDUAL) . THE CIT(A) HAS ALSO SUSTAINED THE ACTION OF THE ASSESSING OFFICER IN VI EW OF THE ORDER OF THE ASSESSING OFFICER DATED 06.12.2007 HOLDING THAT NO HUF EXISTED AND NOR IT OWNED ANY PROPERTY. 5. BEFORE US, IT WAS A COMMON POINT BETWEEN THE PAR TIES THAT THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 171 OF T HE ACT DATED 04.09.2007 (SUPRA) WAS A SUBJECT MATTER OF APPEAL BEFORE THE T RIBUNAL AND VIDE ITS ORDER IN ITA NO.149/PN/2010 DATED 30.03.2012, THE TRIBUNAL H ELD THAT THE SAID M.N. NAVALE (BIGGER HUF) DID NOT EXIST COMPRISING OF 23 MEMBERS AND THAT THE SAID HUF DID OWN THE AGRICULTURAL LANDS ADMEASURING 60 .46 ACRES IN THE YEAR 1952, WHEN THE THEN KARTA OF HUF, NAMELY, LATE SHRI NIVRITI BABAJI NAVALE ITA NOS.1001 TO 1010/PN/2012 A.YS. 2001-02 TO 2008-09 DIED. SO FAR AS THE PROPERTIES ACQUIRED THEREAFTER RIGHT FROM 1952 TILL THE DATE OF PARTITION THE TRIBUNAL CONSIDERED (I) THE CLAIM OF THE ASSESSEE THAT THE SAME WERE ACQUIRED OUT OF THE AGRICULTURAL INCOMES, AND (II) THE ESTIMATION OF SUCH AGRICULTURAL INCOMES. WHILE OBSERVING THAT THE PART ITION DECREE AWARDED BY THE COMPETENT CIVIL COURT, PANDHARPUR HAS A BINDING FOR CE, THE TRIBUNAL DIRECTED THE ASSESSING OFFICER TO VERIFY THE CORRECTNESS OF THE ESTIMATION OF AGRICULTURAL INCOMES. IN SUM AND SUBSTANCE, IT WAS A COMMON POIN T BETWEEN THE PARTIES THAT CONSEQUENT TO THE ORDER OF THE TRIBUNAL DATED 30.03.2012 (SUPRA) THE BASIS ADOPTED BY THE ASSESSING OFFICER TO MAKE THE IMPUGNED ASSESSMENTS ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE DO ES NOT SURVIVE. AS A RESULT THEREOF WE SET-ASIDE THE ORDER OF THE CIT(A) AND DI RECT THE ASSESSING OFFICER TO MAKE FRESH ASSESSMENTS IN THE LIGHT OF THE ORDER OF THE TRIBUNAL DATED 30.03.2012 (SUPRA). 6. EVEN WITH REGARD TO THE ACTION OF THE ASSESSING OFFICER IN ASSESSING THE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES, T HE MATTER IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER WHO SHALL BE A T LIBERTY TO EXAMINE THE CLAIMS MADE BY THE ASSESSEE IN ITS RESPECTIVE RETURNS OF I NCOME ON ITS MERITS DE-NOVO KEEPING IN MIND THE OBSERVATIONS OF THE TRIBUNAL CO NTAINED IN ORDER DATED 30.03.2012 (SUPRA). 7. APART FROM THE AFORESAID, IN RELATION TO ASSESSM ENT YEAR 2001-02, THE ASSESSING OFFICER MADE TWO OTHER ADDITIONS, FIRSTLY , UNEXPLAINED INVESTMENT OF AN AMOUNT ADVANCED TO SHRI M.N. NAVALE OF RS.7,90,0 00/- AND, SECONDLY, UNEXPLAINED INVESTMENT IN PURCHASE OF LAND OF RS.87 ,000/-. 8. THE AFORESAID TWO ADDITIONS ARE ALSO SET-ASIDE A ND THE ASSESSING OFFICER MAY CONSIDER IT IN THE ENSUING FRESH ASSESS MENT PROCEEDINGS, WHICH WE HAVE DIRECTED TO BE CARRIED OUT IN THE EARLIER P ARAGRAPHS AS A RESULT OF THE ORDER OF THE TRIBUNAL DATED 30.03.2012 (SUPRA). ITA NOS.1001 TO 1010/PN/2012 A.YS. 2001-02 TO 2008-09 9. IN THE RESULT, THE APPEALS FOR ASSESSMENT YEARS 2001-02 TO 2007-08 IN THE CASE OF M.N. NAVALE (BIGGER HUF) ARE RESTORED B ACK TO THE FILE OF THE ASSESSING OFFICER TO BE CARRIED OUT AFRESH IN THE L IGHT OF THE ORDER OF THE TRIBUNAL DATED 30.03.2012 (SUPRA) AFTER ALLOWING TH E ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD AS PER LAW. 10. RESULTANTLY, THE APPEALS IN THE CASE OF M.N. NA VALE (BIGGER HUF) IN ITA NOS. 1003 TO 1009/PN/2012 PERTAINING TO THE ASSESSM ENT YEARS 2001-02 TO 2007-08 ARE TREATED AS ALLOWED FOR STATISTICAL PURP OSES. 11. NOW, WE MAY TAKE-UP THE APPEAL IN ITA NO.1010/P N/2012 IN THE CASE OF M.N. NAVALE (SMALLER HUF) PERTAINING TO THE ASSE SSMENT YEAR 2008-09. THE SAID APPEAL PREFERRED BY THE ASSESSEE I.E. M.N. NAV ALE (SMALLER HUF) IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS) CENTRAL, PUNE DATED 16.03.2012 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 31.12.2010 PASSED BY THE ASSESSING OFFICER, UNDER S ECTION 143(3) OF THE ACT FOR ASSESSMENT YEAR 2008-09. 12. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS WITH REGARD TO THE ACTION OF THE INCOME-TAX AUTHORITIES IN ASSESSING THE INCOME DECL ARED BY THE ASSESSEE IN ITS RETURN OF INCOME ON PROTECTIVE BASIS AND MAKING ADD ITION ON SUBSTANTIVE BASIS IN THE HANDS OF SHRI M.N. NAVALE (INDIVIDUAL). 13. IN BRIEF, THE FACTS ARE THAT AS A RESULT OF THE PARTITION OF M.N. NAVALE (BIGGER HUF) ON 16.04.2007, THE ASSESSEE HUF RECE IVED CERTAIN PROPERTIES. ACCORDINGLY, ASSESSEE HUF FILED A RETURN OF INCOM E FOR ASSESSMENT YEAR 2008-09 DECLARING RENTAL INCOME OF RS.41,32,490/- I N RESPECT OF THE PROPERTIES RECEIVED BY IT ON PARTITION OF M.N. NAVALE (BIGGER HUF). HOWEVER, AS THE CLAIMED PARTITION OF M.N. NAVALE (BIGGER HUF) ON 16 .04.2007 WAS NOT ACCEPTED BY THE ASSESSING OFFICER IN TERMS OF HIS O RDER PASSED UNDER SECTION ITA NOS.1001 TO 1010/PN/2012 A.YS. 2001-02 TO 2008-09 171 OF THE ACT DATED 06.12.2007, THE ASSESSING OFFI CER TREATED THE INCOME DECLARED BY THE ASSESSEE HUF AT RS.41,32,490/- RE PRESENTING RENTAL INCOME IN RESPECT OF PROPERTIES RECEIVED FROM M.N. NAVALE (BIGGER HUF) ON PARTITION AS OWNED BY SHRI M.N. NAVALE (INDIVIDUAL) AND INCLU DED SUCH INCOME IN THE HANDS OF SHRI M.N. NAVALE (INDIVIDUAL) ON SUBSTANTI VE BASIS. THE INCOME DECLARED BY THE ASSESSEE HUF IN ITS RETURN OF INC OME WAS ASSESSED ON PROTECTIVE BASIS. MOREOVER, THE ASSESSING OFFICER N OTICED THAT THE APPELLANT HUF HAD NOT DECLARED ANY RENTAL INCOME IN RESPECT OF FLAT NOS. 101 & 102 AT KOTHRUD, PUNE AND ON THIS COUNT A FURTHER ADDITION OF RS.1,28,508/- WAS MADE, WHICH TOO WAS ASSESSED ON PROTECTIVE BASIS IN THE H ANDS OF THE ASSESSEE WHEREAS SUBSTANTIVELY THE SAME WAS INCLUDED IN THE HANDS OF SHRI M.N. NAVALE (INDIVIDUAL). THE CIT(A) HAS ALSO AFFIRMED T HE AFORESAID POSITION. 14. OSTENSIBLY, CONSEQUENT TO THE ORDER OF THE TRIB UNAL DATED 30.03.2012 (SUPRA) THE AFORESAID ACTION OF THE ASSESSING OFFIC ER IS RENDERED UNSUSTAINABLE. IN THE AFORESAID LIGHT, WE, THEREFOR E, SET-ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO MAKE AN ASSESSMENT AFRESH IN THE HANDS OF THE ASSESSEE IN LINE WITH THE DECISION OF THE TRIBUNAL IN THE CASE OF M.N. NAVALE (BIGGER HUF) DATED 30.03.2012 (SUPRA). 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO. 1010/PN/2012 FOR ASSESSMENT YEAR 2008-09 IS TREATED AS ALLOWED FOR S TATISTICAL PURPOSES. 16. NOW, WE MAY TAKE-UP THE APPEALS IN ITA NOS. 100 1 & 1002/PN/2012 RELATING TO SHRI M.N. NAVALE (INDIVIDUAL) WHICH ARE DIRECTED AGAINST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) CENTRAL, PUNE DATED 16.03.2012 WHICH, IN TURN, HAVE ARISEN F ROM THE RESPECTIVE ORDERS OF THE ASSESSING OFFICER PASSED UNDER SECTION 143(3 ) OF THE ACT DATED 31.12.2009 & 31.12.2010 RESPECTIVELY FOR ASSESSMENT YEARS 2007-08 & 2008-09. ITA NOS.1001 TO 1010/PN/2012 A.YS. 2001-02 TO 2008-09 17. IN BOTH THE APPEALS, THE GRIEVANCE OF THE ASSES SEE IS ON IDENTICAL FOOTING. FIRSTLY, FOR ASSESSMENT YEAR 2007-08, THE GRIEVANCE IS AGAINST THE ACTION OF THE INCOME-TAX AUTHORITIES IN INCLUDING A N INCOME OF RS.34,70,696/- EARNED BY M.N. NAVALE (BIGGER HUF) IN THE HANDS OF THE ASSESSEE ON SUBSTANTIVE BASIS BY DISREGARDING AN APPLICATION MA DE UNDER SECTION 171 OF THE ACT BY M.N. NAVALE (BIGGER HUF) FOR PARTITION O N 16.04.2007. SIMILARLY, FOR ASSESSMENT YEAR 2008-09, THE GRIEVANCE OF THE ASSES SEE IS AGAINST THE INCLUSION OF INCOMES OF RS.5,64,540/- AND RS.42,61, 000/- EARNED BY M.N. NAVALE (BIGGER HUF) AND M.N. NAVALE (SMALLER HUF) R ESPECTIVELY ON ACCOUNT OF RENTAL/AGRICULTURAL INCOME IN THE HANDS OF THE A SSESSEE ON SUBSTANTIVE BASIS BY DISREGARDING THE PARTITION OF M.N. NAVALE (BIGGE R HUF) ON 16.04.2007 AS PER THE DECREE AWARDED BY THE COMPETENT CIVIL COURT , PANDHARPUR. 18. RELYING UPON THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 171 OF THE ACT DATED 06.12.2007 DENYING THE EXISTEN CE OF M.N. NAVALE (BIGGER HUF), THE ASSESSING OFFICER PROCEEDED TO INFER THAT THE PROPERTIES YIELDING THE AFORESAID INCOME ARE OWNED BY THE ASSESSEE INDIVID UAL AND THEREFORE, IN THE RESPECTIVE ASSESSMENTS FOR ASSESSMENT YEAR 2007-08 & 2008-09, ASSESSING OFFICER INCLUDED THE AFORESAID INCOMES IN THE HANDS OF THE ASSESSEE. 19. OSTENSIBLY, THE ORDER PASSED BY THE ASSESSING O FFICER UNDER SECTION 171 OF THE ACT DATED 06.12.2007 DENYING THE EXISTEN CE OF M.N. NAVALE (BIGGER HUF) HAS BEEN SET-ASIDE BY THE TRIBUNAL VIDE ORDER DATED 30.03.2012 (SUPRA). AS A CONSEQUENCE, WE DEEM IT FIT AND PROPER TO SET- ASIDE THE IMPUGNED ORDER OF THE CIT(A) AND RESTORE THE MATTER BACK TO THE FI LE OF THE ASSESSING OFFICER WHO SHALL COMPLETE THE ASSESSMENTS AFRESH IN LINE W ITH THE DECISION OF THE TRIBUNAL DATED 30.03.2012 (SUPRA). NEEDLESS TO SAY, THE ASSESSING OFFICER SHALL ALLOW THE ASSESSEE A REASONABLE OPPORTUNITY O F BEING HEARD AND ONLY THEREAFTER PASS AN ORDER AFRESH IN ACCORDANCE WITH LAW. ITA NOS.1001 TO 1010/PN/2012 A.YS. 2001-02 TO 2008-09 20. IN THE RESULT, THE ASSESSEE SUCCEEDS IN ITA NOS . 1001 & 1002/PN/2012 FOR ASSESSMENT YEAR 2007-08 & 2008-09 FOR STATISTIC AL PURPOSES. 21. RESULTANTLY, THE CAPTIONED APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES, AS NOTED ABOVE. ABOVE DECISION WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF THE HEARING O N 24 TH JULY, 2013. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 24 TH JULY, 2013 SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)CENTRAL, PUNE; 4) THE CITCENTRAL, PUNE; 5) THE DR, B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE