Assistant Commissioner of Income Tax, Central Circle- 1(2), Bangalore V. Shri. B K Kanakaraju, Bengaluru

ITA 2023/BANG/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 7191 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 17-09-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRIYADARSHINI BESAGANNI
• Keywords: Opportunity of being heard; Set aside
• Section: 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K, JUDICIAL MEMBER AND MS. PADMAVATHY S, ACCOUNTANT MEMBER ITA No.2023/Bang/2019 Assessment year : 2013-14 The Asst. Commissioner of Income- tax, Central Circle-1(2), Bengaluru. Vs. Shri BK Kanakaraju, No.97, Bileshivale Village, Doddagubbi Post, Bengaluru. PAN – AQTPK 0128 N APPELLANT RESPONDENT Assessee by : Shri S Parthasarathi, Advocate Revenue by : Smt. Priyadarshini Besaganni, Addl.CIT(DR) Date of hearing : 03.03.2022 Date of Pronouncement : 10.03.2022 O R D E R Per Padmavathy S, Accountant Member This appeal of the Revenue is directed against the order of the CIT(A)-11, Bengaluru dated 02/07/2019 for the asst. year 2013-14. ITA No.2023/Bang/2019 Page 2 of 6 2. The Revenue has raised the following grounds 1. The order of CIT(A) is opposed to law and facts of the case. 2. The CIT(A) erred in holding the assessment to be protective assessment when the AO had passed a speaking and reasoned order holding the same to be assessable in the hands of individual. 3. The CIT(A) erred in not considering the decision of the Hon'ble High Court of Gujarat in 140 ITR 517 in disposing the appeal of an assessment held to be protective assessment. 4. The CIT(A) erred in not taking into account the ground on which the HUF had filed appeal before CIT(A)-4, Bengaluru. 5. The CIT(A) erred in not adjudicating on the merits and quantification of the addition made. 6. For these and such other grounds that may be urged at the time of hearing with the plea that the orders of the CIT(A) may be set aside and that of the Assessing Officer may be restored.” 3. The brief facts of the case The assessee is an individual. A search u/s 132 of the Income-tax Act 1961 (the Act) was conducted in the case of the assessee in connection with M/s Telecommunication Employees Cooperative Housing Society Ltd. In response to notice u/s 153A, the assessee filed a letter dated 11/9/2015 enclosing a copy of the return of income filed on 19/8/2013 declaring an income of Rs.2,44,240/- and requesting to treat the return so filed as in response to notice u/s 153A. The assessee along with family members inherited 8 acres 11 guntas of land as part ITA No.2023/Bang/2019 Page 3 of 6 of the family partition executed vide deed dated 28/06/012. Until the partition the said land was a family property belonging to HUF. Post partition one of the brothers was given General Power of Attorney to deal with all the transactions of land. The land was converted into stock in trade u/s 45 and thereafter developed into plot and sold. The AO in the course of assessment treated assessee’s portion of long term capital gains on conversion of land to stock in trade in the individual hands (assessee’s hand) and not to HUF. 4. Aggrieved by the order of the AO, the assessee filed an appeal before the CIT(A). 5. The CIT(A) allowed the appeal in favour of the assessee stating that the Department had initiated proceedings on assessee’s HUF by issue of notice u/s 148 and had brought the same income arising out of the conversion of land in subsequent sale of tax substantially in the hands of the assessee vide order dated 21/12/2018 passed by the ITO- 4(2)(1). The CIT(A) has also noticed that the assessee HUF has filed appeal against this order before the CIT(A). 6. Aggrieved by the order of the CIT(A), Revenue is in appeal before the Tribunal. 7. The ld.AR reiterated the facts submitted before the CIT(A) and mentioned that the said income also got assessed substantially in the ITA No.2023/Bang/2019 Page 4 of 6 hands of the assessee’s HUF and the said assessment is before the CIT(A). The Ld AR therefore prayed that this appeal may also be remanded back to CIT(A) 8. The ld.DR supported the order of the AO including the income in the hands of the assessee. 9. We heard the rival submissions and perused the materials on record. We notice that the land was family property until partition and the assessee got the share as part of the partition deed executed on 28/06/2012 and the issue here is whether the income arising out of the sale of the land should be assessed in the hands of the assessee in his individual capacity or in the hands of assessee’s HUF. We also notice that the proceedings initiated u/s.148 assessing the same income in the hands of Assessee’s HUF is in appeal before the CIT(A) -4. In the impugned order under appeal here, the CIT(A) has decided that the income should be assessed in the hands of the assessee’s HUF merely based on the fact that the same income is also assessed in HUF and is subjudice. The CIT(A) has not gone into the merits of the case to come to the conclusions that the income should be assessed in the hands of the HUF. We therefore remand the case back to CIT(A) to consider the materials on record and decide the issue accordingly after giving reasonable opportunity of being heard to the assessee. ITA No.2023/Bang/2019 Page 5 of 6 10. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in court on 10 th March, 2022 Sd/- Sd/- (GEORGE GEORGE K) ( PADMAVATHY S) Judicial Member Accountant Member Bangalore, Dated, 10 th March, 2022 / vms / Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore. ITA No.2023/Bang/2019 Page 6 of 6 1. Date of Dictation .......................................... 2. Date on which the typed draft is placed before the dictating Member ......................... 3. Date on which the approved draft comes to Sr.P.S ................................... 4. Date on which the fair order is placed before the dictating Member .................... 5. Date on which the fair order comes back to the Sr. P.S. ....................... 6. Date of uploading the order on website................................... 7. If not uploaded, furnish the reason for doing so ................................ 8. Date on which the file goes to the Bench Clerk ....................... 9. Date on which order goes for Xerox & endorsement.......................................... 10. Date on which the file goes to the Head Clerk ......................... 11. The date on which the file goes to the Assistant Registrar for signature on the order ..................................... 12. The date on which the file goes to dispatch section for dispatch of the Tribunal Order ............................... 13. Date of Despatch of Order. .....................................................