ITO, NAGAUR V. Shri Panne Chand Singhvi Karta, NAGAUR

ITA 207/JODH/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70152 (ITAT-JODHPUR)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-08-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 05-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Keywords: Capital asset; Opportunity of being heard
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N. K. SAINI, ACCOUNTANT MEMBER I.T.A. NOS.207 TO 2010/JODH/2013 ASSESSMENT YEARS:2002-03 TO 2005-06 PAN NO. AADHN9336N THE INCOME TAX OFFICER, VS. SHRI PANNE CHAND SIN GHVI KARTA WARD-(2), M/S RATAN CHAND NEMICHAND, HUF NAGAUR. NEAR SHARDA BAL NIKETAN, NAGAUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G.R. KOKANI (D.R.). RESPONDENT BY : SHRI AMIT KOTHARI. DATE OF HEARING : 01/08/2013 DATE OF PRONOUNCEMENT : 05/08/2013 ORDER PER BENCH: THESE FOUR APPEALS BY THE DEPARTMENT ARE DIRECTED AGAINST THE COMMON ORDER DATED 03/04/2013 OF LEARNED CIT(A), JODHPUR. SINCE THE ISSUES INVOLVED ARE COMMON IN THESE APPEALS, WHICH WERE HEARD TOGET HER, SO THESE ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. THE COMMON GROUNDS RAISED IN THESE APPEALS READ AS UNDER:- IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CI T(A) HAS ERRED IN- (1) DELETING THE LONG TERM CAPITAL GAIN IN THE HAND S OF HUF WHEN THE ASSESSEE HAD ADMITTED IN HIS AFFIDAVITS TH AT THE PROPERTY ON WHICH LONG TERM CAPITAL GAIN ARISE BELONG TO THE HUF. (2) TREATING THE ASSESSMENT MADE IN HUF STATUS AS O N PROTECTIVE BASIS WHEREAS SAME WAS PASSED AS ON SUBSTANTIVE BASIS. 2 (3) DIRECTING THAT THE LONG TERM CAPITAL GAIN SHALL BE CHARGED IN THE HANDS OF INDIVIDUALS WHEN THE CASE UNDER CONSID ERATION IS OF HUF AND THE FACT THAT CASE OF INDIVIDUAL ASSESSMENT WAS ALREADY SET ASIDE BY THE HON'BLE ITAT. 2. FROM THE ABOVE GROUNDS, IT IS GATHERED THAT THE ISSUE RELATES TO THE DELETION OF THE LONG TERM CAPITAL GAIN IN THE HANDS OF THE HUF. 3. FACTS OF THE CASE IN BRIEF ARE THAT AN ANCESTRAL LAND BEING KHASHRA NOS. 424 AND 425 WAS PARTITIONED AMONGST MEMBERS OF THE FAMILY SARAV SHRI G.C. SINGHVI, NEMI CHAND SINGHVI, P.C. SINGHVI, MADAN CH AND SINGHVI AND VINOD SINGHVI VIDE ORDERS DATED 19/9/1972 AND 12/9/1979 P ASSED BY THE S.D.O., NAGAUR. AS PER ORDER DATED 12/9/1979, THE S.D.O., N AGAUR TO MAKE CORRECTION IN LAND RECORD, THE TOTAL AREA OF LAND SO PARTITIONED BETWEEN FIVE MEMBERS OF THE HUF WAS 187.5 BIGHAS APPROXIMATELY. THUS, EACH FAMI LY GOT ABOUT 37.5 BIGHAS OF LAND PURSUANT TO THE ORDER OF PARTITION PASSED B Y THE S.D.O., NAGAUR. THE PARTITIONED PROPERTY, THUS, BELONGED TO THE HUF OF RESPECTIVE PERSONS MENTIONED ABOVE. THE INCOME TAX DEPARTMENT, GATHERED MATERIAL FROM THE OFFICE OF THE REGISTRAR OR FROM OTHER AVAILABLE SOURCES ABOUT VAR IOUS SALE DEEDS OF THE AFORESAID LAND REGISTERED DURING THE PERIOD RELATED TO ASSESSMENT YEARS 2002-03 TO 2005-06, WHICH REVEALED THAT THE REGISTERED SALE DEEDS IN RESPECT OF 71 PLOTS WERE GOT REGISTERED BY SHRI NEMI CHAND SINGHVI ON H IS BEHALF AND ALSO ON BEHALF OF OTHER MEMBERS OF THE FAMILY AS HOLDER OF POWER O F ATTORNEY ON BEHALF OF SUCH OTHER PERSONS NAMELY SHRI PANNE CHAND SINGHVI, SMT. KEWAL SINGHVI, WIFE OF LATE SHRI GYAN CHAND SINGHVI AND SHRI VINOD SINGHVI , S/O-LATE SHRI GYAN CHAND SINGHVI. THE A.O., SUBSEQUENTLY WHILE ISSUING NOTIC ES U/S 148 OF THE INCOME TAX 3 ACT, 1961 (HEREINAFTER TO BE REFERRED AS THE ACT), COMPLETED THE ASSESSMENT U/S 147 OF THE ACT THEREBY DETERMINING THE TAXABLE LONG TERM CAPITAL GAIN FOR RESPECTIVE ASSESSMENT YEARS IN THE HANDS OF HUF. 4. THE ASSESSEE CARRIED THE MATTER TO THE LEARNED C IT(A) AND SUBMITTED THAT THE SAME PLOTS OF LAND HAD ALREADY BEEN ASSESSED IN THE HANDS OF EITHER RESPECTIVE PERSONS OF THE HUF OR IN THE HANDS OF RE SPECTIVE HUF IN ASSESSMENT YEARS 2002-03 TO 2005-06. IT WAS FURTHER SUBMITTED THAT THE LEARNED CIT(A)-III, JAIPUR IN CASE OF SHRI VINOD SINGHVI AND CIT (A)-II , JAIPUR IN THE CASE OF SMT. KEWAL SINGHVI HAD ALREADY CONFIRMED THE FINDING OF THE A.O. THAT LONG TERM CAPITAL GAIN WAS ASSESSABLE IN THEIR HANDS AND DID NOT BELO NG TO RATAN CHAND NEMICHAND HUF. IT WAS STATED THAT THE LEARNED CIT(A ) HAD GIVEN FINDING THAT THE AFFIDAVIT FILED BY KARTA OF RATAN CHAND NEMICHAND H UF WAS SELF SERVING DOCUMENT WITHOUT ANY SUPPORT OF EVIDENCE. IT WAS FU RTHER STATED THAT THE LEARNED CIT(A) HAD GIVEN FINDING THAT THE LEGAL OWNERSHIP O VER THE SAID PLOTS WAS WITH THE RESPECTIVE INDIVIDUALS, WHO AS AN OWNER HAD GIVEN P OWER OF ATTORNEY IN RESPECT OF PLOTS TO SHRI NEMI CHAND SINGHVI. IT WAS CONTENDED THAT OUT OF 71 PLOTS, 44 BELONGED TO SMT. KEWAL SINGHVI AND 5 PLOTS WERE SOL D BY SHRI VINOD SINGHVI KARTA OF VINOD SINGHVI HUF AND THE SAME WERE ASSESS ED IN THE ASSESSMENT YEARS 2002-03 TO 2005-06 BY THE ITO WARD 7(3), JAIP UR VIDE ORDER DATED 24/12/2009. IT WAS ALSO CONTENDED THAT 18 PLOTS OUT OF 71 HAVE BEEN ASSESSED IN THE HANDS OF SHRI PANNE CHAND SINGHVI AND 4 PLOTS S OLD BY LATE SHRI N.C. SINGHVI WERE ASSESSED IN THE HANDS OF SMT. PARAS KU MARI SINGHVI, LEGAL HEIRS OF SHRI NEMI CHAND SINGHVI BY ITO WARD-2, NAGAUR IN TH E ASSESSMENT YEAR 2004- 05 AND 2005-06. IT WAS SUBMITTED THAT THE ADDITION IN THE CASE OF ASSESSEE HUF 4 WAS ONLY PROTECTIVE IN NATURE AND SINCE THE INCOME HAD ALREADY BEEN CONSIDERED IN THE INDIVIDUAL HANDS. THE ADDITION IN THE HANDS OF THE ASSESSEE MAY BE DELETED. 5. THE LEARNED CIT(A) AFTER CONSIDERING THE SUBMISS IONS OF THE ASSESSEE, OBSERVED THAT THE ASSESSEE FURNISHED THE COPIES OF ORDER DATED 24/12/2009 OF CIT(A), JAIPUR PASSED IN THE CASE OF SHRI VINOD SIN GHVI, KARTA OF VINOD SINGHVI HUF WHERE CIT(A) CONFIRMED TAXABILITY OF CAPITAL GA INS IN INDIVIDUALS STATUS AND THE ITAT, JAIPUR B BENCH, JAIPUR HELD THAT SALE O F SUCH PLOTS COULD NOT BE CONSIDERED IN THE HANDS OF HUF. HE FURTHER OBSERVED THAT THE SAME POSITION WAS ALSO IN ANOTHER CASE OF SMT. KEWAL SINGHVI WHEREIN THE ITAT JAIPUR B BENCH, JAIPUR HELD THAT SALE OF SUCH PLOTS COULD NOT BE CO NSIDERED IN THE HANDS OF HUF. THE LEARNED CIT(A) DELETED THE ADDITIONS BY OBSERVI NG IN PARAS 6.2 TO 7 OF THE IMPUGNED ORDER, WHICH ARE REPRODUCED AS UNDER:- 6.2 I HAVE GONE THROUGH THE ORDER DATED 30/6/2011 OF THE HON'BLE ITAT, JAIPUR BENCH B, JAIPUR, WHERE IT WAS OBSERVED AS UNDER- THE LEARNED CIT(A) DECIDED THAT THE CAPITAL GAIN O N SALE OF PLOTS IS TO BE TAXED IN THE HANDS OF THE ASSESSEE. THE ASSESSEE IN HIS GROUND NO. 1 OF THE C.O. PLEADED THAT CAPITAL GAIN SHOULD BE TAXED IN THE HANDS OF HUF. HOWEVER, SUCH GROUND NO. 1 OF THE C.O. WAS NOT PRES SED BY THE LEARNED A.R. OF THE ASSESSEE. THUS, IT BECOMES CLEAR THAT C APITAL GAIN ON THE SALE OF PLOTS IS TO BE TAXED IN THE HANDS OF THE ASSESSE E. 6.3 THE CIT(A), BIKANER WHILE DECIDING THE APPEAL OF INDIVIDUAL SHRI PANNE CHAND SINGHVI VIDE HIS ORDER DATED 09/09/2011 IN APPEAL NO. 317/BIKANER/2009-10, OBSERVED THAT:- I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMIS SION MADE. THE FIRST PLEA OF THE A/R THAT THE LAND IN QUESTION BELONG TO THE APPELLANT HUF AND NOT IN HIS INDIVIDUAL CAPACITY CANNOT BE ACCEPTED O N THE GROUND THAT NO 5 SATISFACTORY EVIDENCE OF SUCH TITLE OR CHANGE IN TH E LAND RECORD COULD BE FURNISHED BY THE A/R. 6.4 FROM THE ABOVE, IT IS CLEAR THAT LONG TERM CAPI TAL GAIN ARISING SHOULD BE TAXED IN THE HAND OF INDIVIDUAL. CONSIDERING THIS, I HOLD THAT IN THE CASE OF PRESENT APPELLANT ASSESSEE BEING KARTA OF M/S RATAN CHAND N EMICHAND HUF, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN DETERMINING THE TAXABLE LONG TERM CAPITAL GAIN IN THE HUF HANDS. WHATEVER, THE LONG TERM CAPI TAL GAIN ARISES SHALL BE CHARGED IN THE HAND OF INDIVIDUAL. IN VIEW OF THE ABOVE, THE GROUNDS RAISED IN THIS A PPEAL ARE DISPOSED OFF WITH ABOVE DIRECTION. 07. SINCE THE ISSUE OF STATUS HAS NOW BEEN SETTLED, THEREFORE, OTHER ISSUE REGARDING TRANSFER OF CAPITAL ASSET AS DEFINED IN S ECTION 2(47) AND ADOPTING THE SALE VALUE OF PLOTS/VALUE ADOPTED AS ON 01/4/1981 W OULD BE CONSIDERED OR DECIDED IN INDIVIDUAL CASES IN ACCORDANCE WITH THE DIRECTION GIVEN IN I.T.A. NO. 1404/JP/2010, C.O. NO. 3/JP/2011, I.T.A. NO. 1405/J P/2010, C.O. 4/JP/20/2011, I.T.A. NO. 1316, 1317 AND 1318/JP/2010 BY HON'BLE I TAT B BENCH IN ITS COMMON ORDER DATED 30/6/2011. 6. NOW THE DEPARTMENT IS IN APPEAL. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CA SE, IT IS NOTICED THAT A SIMILAR ISSUE WAS A SUBJECT MATTER OF THE ASSESSEES APPEA L BEFORE THE ITAT JODHPUR BENCH SMC, JODHPUR IN I.T.A. NOS. 19-20/JODH/2012 FOR THE ASSESSMENT YEAR 2003-04 AND 2004-05 IN THE CASE OF PANNE CHAND SING HVI (INDIVIDUAL) VS. ITO, WARD 2(1), BIKANER ( COPY OF THE SAME WAS FURNISHED BY THE LEARNED COUNSEL FOR THE ASSESSEE AND IS AVAILABLE ON THE RECORD) AND TH E MATTER HAS BEEN SENT BACK TO THE A.O. BY OBSERVING IN PARA 4 OF THE ORDER DAT ED 23/3/2012, WHICH READS AS UNDER:- 6 AFTER CONSIDERING THE ORDERS OF THE ASSESSING OFFI CER AND LEARNED CIT(A) AND SUBMISSIONS OF BOTH THE PARTIES, I FIND THAT MA TTER SHOULD GO BACK TO THE FILE OF ASSESSING OFFICER AS IN CERTAIN CASES R ELATING TO THE SAME GROUP OF ASSESSEE ON IDENTICAL ISSUE THE MATTER HAS BEEN SENT BACK TO THE FILE OF ASSESSING OFFICER. ACCORDINGLY, I SET ASIDE THESE O RDERS AND REMAND BACK TO THE FILE OF ASSESSING OFFICER. THE ASSESSEE IS D IRECTED TO FILE COPY OF ORDER OF TRIBUNAL PASSED IN OTHER CASES BEFORE ASSE SSING OFFICER SO THAT HE CAN CONSIDER THE SAME AND CAN PASS A FRESH ORDER. T HE ASSESSING OFFICER WILL ALSO CONSIDER THE OBJECTION OF THE ASSESSEE IN RESPECT TO INITIATION OF PROCEEDING UNDER SECTION 147/148. I ORDER ACCORDING LY. 8. SO RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO ORDER OF THE ITAT, JODHPUR BENCH SMC, JODHPUR IN THE CASE OF SHRI PA NNE CHAND SINGHVI KARTA M/S RATAN CHAND NEMICHAND, NAGAUR (SUPRA). THIS ISS UE IS SET ASIDE TO THE FILE OF THE A.O TO BE DECIDED AFTER PROVIDING DUE AND RE ASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. IN THE RESULT APPEALS ARE ALLOWED FOR STATISTICA L PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 05/08/2013.) SD/- SD/- (HARI OM MARATHA) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 05/08/2013 *RANJAN COPY FORWARDED TO: 1. APPELLANT- I.T.O., WARD(2), NAGAUR. 2. RESPONDENT- SHRI PANNE CHAND SINGHVI KARTA, M/S RATAN CHAND NEMICHAND, HUF, NAGAUR. 3. CIT(A) 4. CIT 5. D.R. 6. THE GUARD FILE (ITA NO. 207 TO 2010/JODH/2013. ASSISTANT REGISTRAR ITAT, JODHPUR.