The ITO, GNR Ward-1, Ahmedabad V. Shri Chandresh J.Thakkar, Gandhinagar

ITA 1857/AHD/2011

• Counselvise Citation: 185720514 RSA 2011
• Duration Of Justice: 3 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 25-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Assessee Lawyers: S N DIVETIA
• Keywords: Capital asset
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD (BEFORE SHRI PRAMOD KUMAR, A.M. AND SHRI S.S. GODARA, J.M.) ITA NO. 1857/ A HD/2011 A . Y. 200 7 - 0 8 ITO, GANDHINAGAR VS. SHRI CHANDRESH J. THAKKAR PLOT NO.14, 4 TH FLOOR, UDHYOG BHAVAN, SECTOR - 11, GANDHINAGAR (PAN: AAVPT 2717M ) (APPELLANT) (RESPONDENT) ASSESSEE/APPELLANT BY : SHRI P.L. KUREEL, SR. D.R. REVENUE/RESPONDENT BY : SHRI S.N. DIVETIA , A.R. DATE OF HEARING : 2 3 .04.2015 DATE OF P RONOUNCEMENT : 3 0 . 04.2015 PER S.S. GODARA, JUDICIAL MEMBER: TH IS REVENUE S APPEAL FOR A . Y . 200 7 - 0 8 ARISES FROM O R DER OF THE CIT(A) , GANDHINAGAR DATED 11.4.2011 PASSED IN CASE NO.CIT(A) /GNR/186/2009 - 10 DELETING ADDITION OF RS.29,78,506/ - MADE ON ACCOUNT OF LONG TERM CAPITAL GAINS IN ASSESSMENT ORDER DATED 17.12.2009 , IN PROCEEDINGS U/S 143(3) OF T HE INCOME T AX ACT, 1961 (IN SHORT THE ACT ) 2 2. THE ASSESSEE IS AN INDIVIDUAL. HE FILED HIS RETURN ON 6.7.2 012 ADMITTING TOTAL INCOME OF R S .4,25,678/ - .T HE SAME WAS SUMMARILY PROCESSED. 3. THE ASSESSING OFFICER TOOK UP SCRUTINY. HE RECEIVED AN AIR INFOR MATION QUOTING THE ASSESSEE S PAN TO HAVE ENTERED INTO SALE TRANSACTION OF A CHUNK OF IMMOVABLE PROPERTY. HE S OUGHT TO ASSESS THE CONSEQUENTIAL CAPITAL GAINS IN HIS HANDS . THE ASSESSEE PLEADED THAT HIS LATE FATHER HAD PURCHASED THE SAID LAND ON 13.12.1999 IN HIS NAME FROM HIS OWN FUNDS . THEREAFTER HE HAD CONVERTED THE SAID PROPERTY IN THE NAME OF EPONYMOUS HUF AFT ER THE DEATH OF HIS FATHER ON 4.5.2004 AS PER HIS LAST WISH. A PLEA WAS TAKEN THAT IN FACT HUF HAD SOLD THE PROPERTY ON 7.10.2006 AND RECEIVED THE SALE PRICE IN QUESTION. THE ASSESSEE FURTHER SUBMITTED THAT THE HUF HAD ALREADY INCLUDED THE LAND IN QUESTION IN ITS RETURN FOR A.Y.2005 - 06, SOLD IT ON 7.10.2006 AND REINVESTED THE SALE PROCEEDS IN PURCHASING A PLOT . THE QUOTING OF THE INDIVIDUAL PAN WAS CLAIMED AS A TECHNICAL MISTAKE . THE A SSESS ING OFFICER DID NOT AGREE TO THE ABOVE EXPLANATION. HE OBSERVED THAT THE PROPERTY IN QUESTIION HAD BEEN PURCHASED IN THE ASSESSEE - INDIVIDUAL S NAME , HIS LATE FATHER HAD PAID THE CONSIDERATION MONEY FROM HIS SAVINGS ACCOUNT, THERE WAS NO EVIDENCE ON RECORD TO PROVE HIS LAST WISH OF CONVERTING THE PROPERTY IN THE HUF S NAME , THE ASSESSEE HAD NOT UTILIZED THE HUF PAN IN EXECUTING THE SALE DEED AND THE IMPUGNED CAPITAL ASSET WAS PURCHASED/SOLD IN INDIVIDUAL CAPACITY TO HOLD THAT CAPITAL GAINS OF RS.30,16,505/ - HAD TO BE ASSESSED IN THE ASSESSEE S HANDS ONLY . THE ASSESSEE S PLEA OF TECHNICAL MISTAKE IN WRONGLY QUOTING HIS PAN NUMBER STOOD DECLINED. 4. THE ASSESSEE PREFERRED AN APPEAL. HE CHALLENGED THE ASSESSING OFFICER S ACTION ADDING THE IMPUGNED CAPITAL GAINS IN HIS HANDS. HE CLAIM ED CREDIT OF THE CAPITAL GAINS DECLARED IN TH E HUF S RETURN. THE CIT(A) REFER RED THIS ADDITIONAL PLEA FOR ASSESSING OFFICER S COMMENTS WHO REITERATED THE ASSESSMENT ORDER. THEREAFTER, THE ASSESSEE 3 APPEARS TO HAVE FILED SUM ADDITIONAL DETAILS SHOWING OWNERSHIP OF THE HUF OVER THE PROPERTY IN QUESTION IN ASSESSMENT YEAR 2005 - 06 AS PER HIS FATHER S LAST WISHES. THE CIT(A) SOUGHT A REMAND REPORT. THE ASSESSING OFFICER SUBMITTED THE SAME ON 5.4.2011. THEREAFTER, THE CIT(A) IN THE ORDER UNDER CHALLENGE OBSERVES THAT THE ASSESSEE S FATHER HAD PAID THE CONSID ERATION MONEY AT THE TIME OF PURCHASING THE PROPERTY IN QUESTION IN THE ASSESSEE S NAME. HE QUOTES ADMITTED FACTUAL POSITION THAT THE ASSESSEE S FUNDS HAS NOT BEEN UTILI ZED IN PURCHASE OF THE PROPERTY. H E FINDS THAT THE ASSESSEE S FATHER WA S IN THE HABIT O F PURCHASING SIMILAR PROPERT IES IN HIS CHILDREN S NAME S DURING HIS LIFE TIME. THE CIT(A) TAKES ACCOUNT OF FACTS ON RECORD THAT THE HUF HAD ALREADY SHOWN THE LAND SOLD IN ITS OWNERSHIP FOR THE RETURN FILED IN A.Y.2005 - 06, I.E., WELL BEFORE THE SALE DEED. IT WAS ALSO FOUND TO HAVE CLAIMED EXEMPTION WITH REGARD TO THE CAPITAL GAINS ARISING FROM THE TRANSFER IN QUESTION . THE LOWER APPELLATE AUTHORITY FURTHER TAKES INTO ACCOUNT THE FAMILY CIRCUMSTANCES IN VIEW OF THE ASSESSEE S PLEA THAT HIS FATHER HAD EXPRESSED A LAST WISH TO CONVE RT THE PROPERTY IN HUF S NAME. THE RELEVANT PROVISIONS UNDER THE BENAMI TRANSACTIONS (PROHIBITION) ACT, 1988 ARE HELD NOT TO APPLY IN CASE OF A PROPERTY HELD BY AN HUF IN THE NAME OF ITS COPARCENER. IN VIEW OF ALL THESE OVERWHELMING EV IDENCE, THE LOWER APPELLATE ORDER HOLDS THAT THE ASSESSING OFFICER HAD WRONGLY ASSESSED THE IMPUGNED CAPITAL GAINS IN THE ASSESSEE S HAND INSTEAD OF HIS HUF . THE ASSESSEE HAS SUCCEEDED IN THE LOWER APPELLATE PROCEEDINGS. THEREFORE, THE REVENUE IS IN APPEAL . 5. WE HAVE HEARD BOT H SIDES AND PERUSED THE CASE FILE . RELEVANT FACTS STAND NARRATED HEREINABOVE. THE REVENUE SEEKS RESTORATION OF THE IMPUGNED CAPITAL GAIN ADDITION IN THE ASSESSEE S HANDS INSTEAD OF ITS HUF. IT IS AN ADMITTED FACTUAL POSITION THAT THE ASSESSEE S FATHER HAD PURCHASED THE ASSET IN QUESTION IN HIS NAME. IT HAS COME ON RECORD THROUGH DOCUMENTARY EVIDENCE THAT ASSESSEE S FUND WERE NOWHERE UTILIZED IN THE 4 SAID PURCHASE. T HE ASSESSEE APPEARS TO HAVE CONVERTED THIS SAID LAND INTO HUF S ESTATE. THE HUF DECLARED THE VERY PROPERTY IN ITS NAME IN A.Y.2005 - 06 RETURN . THE ASSESSEE SOLD ITS PROPERTY ON 7.10.2006 ALONG WITH THE OTHER CO - SHARES. HE QUOTED HIS INDIVIDUAL PAN NUMBER. SINCE THE REVENUE RECORD DEMONSTRATED HIS NAME IN THE TITLE COLUMN, THER E WAS NO ENTRY IN THE SALE DEED CLARIFYING THE HUF TO BE ITS OWNER FOR OBVIOUS REASONS . T HE FACT ALSO REMAINS THAT THE HUF IN THE PRESENT CASE HAS DECLARED THE IMPUGNED CAPITAL GAINS IN ITS HANDS. THE REVENUE HAS NOT CONTROVERTED ALL THESE FACTS. THEREFORE , WE OBSERVE THAT MERE QUOTING OF INDIVIDUAL PAN NUMBER OR ASSESSEE INDIVIDUAL NAMES IN THE SALE DEED CANNOT FORM THE SOLE REASONS TO ASSESS IMPUGNED CAPITAL GAINS IN THE ASSESSEE S HANDS INSTEAD OF HIS HUF. W E AFFIRM THE CIT(A) FINDING S AND REJECT THE REVENUE S GROUND . 6. THE REVENUE S APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON THIS DAY THE 3 0 APRIL, 2015 IN AHMEDABAD. S D / - S D / - (PRAMOD KUMAR) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED : APRIL, 2015 PRABHAT KUMAR KESARWANI COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. CONCERNED CIT 4. CIT(A) 5. D.R., ITAT, AHMEDABAD 6. GUARD FILE BY ORDER, DY./ASSTT. REGISTRAR ITAT, AHMEDABAD