Sh. Balwinder Singh, Ludhiana V. DCIT, Ludhiana

ITA 285/CHANDI/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9996 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 1998-1999
• Appeal Filed On: 31-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: VIJAY SHARMA
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 285/CHD/2016 ASSESSMENT YEAR : 1998-99 SHRI BALWINDER SINGH, VS THE DCIT, 1132-A, TAGORE NAGAR, CIRCLE 7, CIVIL LINES, LUDHIANA. LUDHIANA. PAN: ARFPS9357J & ITA NO. 146/CHD/2016 ASSESSMENT YEAR : 1998-99 SHRI ARVINDER SINGH GREWAL, VS THE DCIT, 1132-A, TAGORE NAGAR, CIRCLE 7, CIVIL LINES, LUDHIANA. LUDHIANA. PAN: AFTPG6706R & ITA NO. 145/CHD/2016 ASSESSMENT YEAR : 1998-99 LATE SHRI NASIB SINGH GREWAL, VS THE DCIT, THROUGH SH.ARVINDER SINGH GREWAL, CIRCLE 7, L/H, 1132-A, TAGORE NAGAR, LUDHIAN A CIVIL LINES . LUDHIANA. PAN: ------- (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL & SHRI VIJAY SHARMA RESPONDENT BY : SHRI S.K.MITTAL DATE OF HEARING : 16.05.2016 DATE OF PRONOUNCEMENT : 16.05.2016 O R D E R THIS ORDER SHALL DISPOSE OFF ALL THE ABOVE APPEALS FILED BY DIFFERENT ASSESSEES ON IDENTICAL ISSUES. 2 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE PA RTIES HAVE MAINLY AGUED IN THE CASE OF SHRI BALWINDER SIN GH, ASSESSEE AND SUBMITTED THAT ISSUE IS IDENTICAL IN T HE REMAINING APPEALS. ITA 285/2016 ( SHRI BALWINDER SINGH) 3. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NOS. 1 AND 2 OF THE APPEAL CHALLENGING RE- OPENING OF THE ASSESSMENT. THE SAME ARE, THEREFORE , DISMISSED AS NOT PRESSED. 4. ON GROUND NO. 3 AND 4, ASSESSEE CHALLENGED THE ORDERS OF THE AUTHORITIES BELOW IN MAKING ASSESSMEN T OF INTEREST ON FDRS/TDRS IN THE HANDS OF THE ASSESSEE IN HIS INDIVIDUAL CAPACITY, WHEREAS INCOME BELONGED TO M/S NASEEB SINGH & SONS (HUF). 5. THE ISSUE BEFORE LD. CIT(APPEALS) WAS REGARDING TAXABILITY OF INTEREST INCOME IN THE HANDS OF THE ASSESSEE IN INDIVIDUAL CAPACITY. THE ASSESSEE FILE D RETURN OF INCOME AT NIL INCOME IN THE CAPACITY OF INDIVIDUAL SINCE INTEREST INCOME DID NOT BELONG TO THE ASSESSEE. THE INCOME WHICH WAS ASSESSED IN THE HAN DS OF THE ASSESSEE HAS ALREADY BEEN DECLARED AND SHOWN IN THE HANDS OF M/S NASEEB SINGH & SONS (HUF) AS THE SAME BELONGS TO HUF ONLY. THE SUBMISSIONS ALONGWIT H DETAILED HISTORY OF THE CASE WAS SUBMITTED TO THE 3 ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS RELATING TO ASSESSMENT YEARS 1998-99 TO 2004-05. M/S NASEEB SINGH & SONS (HUF) IS AN EXIST ING ASSESSEE AND THE ENTIRE INCOME OF TDRS/SDRS STANDS ACCRUED/RECEIVED, BELONGS TO M/S NASEEB SINGH & SON S (HUF). IT WAS ALSO SUBMITTED THAT THE DEPARTMENT H AS ALSO ACCEPTED THE STATUS OF HUF OF SHRI NASEEB SING H BEING KARTA OF M/S NASEEB SINGH & SONS (HUF) IN EARLIER YEARS I.E. FROM ASSESSMENT YEAR 1975-76 TO 1980- 81. IT WAS ALSO EXPLAINED THAT DEPARTMENT HAD NEIT HER CHALLENGED THE STATUS OF ASSESSEE NOR WENT IN APPEA L AGAINST THE ORDER OF THE APPELLATE ASSISTANT COMMISSIONER (APPEALS). THE PHOTO COPIES OF APPELL ATE ORDER AND ASSESSMENT ORDERS UNDER WEALTH TAX ACT BEING HUF WERE ALSO FILED BEFORE LD. CIT(APPEALS). IT WAS FURTHER EXPLAINED THAT HUF FILED SETTLEMENT PET ITION BEFORE HON'BLE SETTLEMENT COMMISSION, NEW DELHI AND THE SETTLEMENT COMMISSION PASSED THE ORDER UNDER SECTION 245D(4) AND IN THE ORDER OF THE SETTLEMENT COMMISSION, IT WAS HELD THAT STATUS OF SHRI NASEEB SINGH & SONS IS THAT OF HUF SINCE ITS INCEPTION AND ALSO HELD THAT THE INTEREST INCOME SO EARNED ON THE FDRS WHICH WERE IN THE NAMES OF INDIVIDUAL MEMBERS OF HU F WERE HELD TO BE OF HUF. AS PER ORDER OF THE SETTLE MENT COMMISSION, ASSESSING OFFICER ALSO PASSED THE ORDER GIVING EFFECT TO THE ORDER OF THE SETTLEMENT COMMIS SION. NOW SINCE THE STATUS OF HUF STANDS FINALLY ACCEPTED BY THE HON'BLE SETTLEMENT COMMISSION AND EVEN EARLIER, 4 HUF STATUS, AS MENTIONED ABOVE, WAS ACCEPTED BY THE DEPARTMENT AND IT WAS ONLY BECAUSE OF ONLY TDS MIS- CONCEPTION THAT CASES WERE REOPENED AND INDIVIDUAL ASSESSMENTS HAVE BEEN FRAMED. THUS, THE ORDER OF T HE SETTLEMENT COMMISSION HAS FINALLY HELD THE STATUS A S THAT OF HUF SHOULD BE TAKEN AND THE ORDER HAS BEEN ACCEPTED BY THE DEPARTMENT AND THUS, APPEAL OF THE ASSESSEE SHOULD BE ALLOWED BY CONSIDERING STATUS OF HUF. THE ADDITIONS MADE BY THE ASSESSING OFFICER, THEREFORE, DESERVE TO BE DELETED. 6. THE LD. CIT(APPEALS) FORWARDED THESE STATEMENTS OF THE ASSESSEE TO THE ASSESSING OFFICER FOR SUBMITTIN G THE REPORT IN WHICH IT WAS EXPLAINED THAT ASSESSMENT OR DER UNDER APPEAL 1998-99 IS DIFFERENT FROM THE SUBSEQUE NT ASSESSMENT YEARS BECAUSE NO RETURN FOR THIS YEAR HA S BEEN FILED IN THE STATUS OF HUF, THEREFORE, THE AMO UNT OF INTEREST OF RS. 6,93,864/- REMAINED UNTAXED IN THE HANDS OF HUF. IT WAS, THEREFORE, SUBMITTED BY ASSESSING OFFICER THAT INTEREST INCOME SHOULD BE BROUGHT TO TAX IN THE HANDS OF SHRI BALWINDER SINGH IN INDIVIDUAL CAPACITY. 7. THE LD. CIT(APPEALS), CONSIDERING THE ABOVE FACT S AND THE REMAND REPORT NOTED THAT SINCE NO RETURN OF M/S NASEEB SINGH & SONS (HUF) HAS BEEN FILED FOR ASSESSMENT YEAR UNDER APPEAL, THEREFORE, INTEREST T O BE TAXED IN THE HANDS OF THE ASSESSEE INDIVIDUAL. ACCORDINGLY, APPEAL OF THE ASSESSEE WAS DISMISSED. 5 8. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND CONSIDERED THE RIVAL SUBMISSIONS. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW. HE HAS REFERRED TO PB-1 WHICH IS ORDER OF THE INCOME TAX SETTLEMENT COMMISSION, NEW DELHI DATED 30.01.2014 IN THE CASE OF M/S NASEEB SINGH & SONS (HUF). THE SETTLEMENT COMMISSION IN HIS FINDINGS CONSIDERED THE IDENTICAL ISSUE OF INTEREST ACCRUED ON FDRS ETC. AND HELD THA T INTEREST INCOME IN QUESTION IS HELD TO BE RIGHTLY ASSESSABLE IN THE HANDS OF APPLICANT HUF M/S NASEEB SINGH & SONS. 8(I) THE LD. COUNSEL FOR THE ASSESSEE ALSO REFERR ED TO PB-23 WHICH IS THE HISTORY OF THE ASSESSEE AND PROPERTIES HELD BY HUF. IT WAS SUBMITTED BEFORE ASSESSING OFFICER IN PRECEDING ASSESSMENT YEAR AND THE YEAR UNDER CONSIDERATION. PB-32 IS WEALTH TAX ORDE R IN THE CASE OF SHRI NASEEB SINGH, HUF FOR 1975-76 TO 1980-81 IN WHICH THE SAME PROPERTIES UNDER CONSIDERATION WERE CONSIDERED IN THE HANDS OF HUF. THE LD. COUNSEL FOR THE ASSESSEE ALSO FILED COPY OF THE ORDER OF LD. CIT(APPEALS)-II LUDHIANA DATED 20.05.2014 FO R ASSESSMENT YEAR 1999-2000 TO 2000-04 IN THE CASE OF SHRI BALWINDER SINGH IN WHICH THE LD. CIT(APPEALS) FOLLOWING THE ORDER OF SETTLEMENT COMMISSION IN THE CASE OF M/S NASEEB SINGH & SONS (HUF) DELETED THE ADDITION ON ACCOUNT OF INTEREST IN HIS INDIVIDUAL H ANDS. 6 THE LD. COUNSEL FOR THE ASSESSEE ALSO FILED COPY OF THE ORDER OF LD. CIT(APPEALS)-III LUDHIANA DATED 30.12. 2015 FOR ASSESSMENT YEAR 2008-09 IN WHICH ALSO LD. CIT(APPEALS), FOLLOWING ORDER OF THE SETTLEMENT COMMISSION IN THE CASE OF M/S NASEEB SINGH & SONS (HUF) DELETED THE ADDITION ON ACCOUNT OF INTEREST ACCRUED ON FDRS. HE HAS ALSO FILED ORDER OF THE LD . CIT(APPEALS)-II LUDHIANA DATED 20.05.2014 FOR ASSESSMENT YEAR 1999-2000 TO 2004-05 IN THE CASE OF SHRI ARVINDER SINGH (OTHER ASSESSEE) IN WHICH ALSO LD. CIT(APPEALS), FOLLOWING THE ORDER OF THE SETTLEMENT COMMISSION (SUPRA) DELETED THE ADDITION ON ACCOUNT OF INTEREST IN HIS INDIVIDUAL HANDS. 8(II) THE LD. DR DID NOT DISPUTE THE ABOVE FACTS AN D MATERIAL BROUGHT ON RECORD. THEREFORE, IT IS CLEAR FROM THE ABOVE ORDERS, PARTICULARLY THE ORDER OF THE SETTLEMENT COMMISSION THAT THERE EXISTS M/S NASEEB SINGH & SONS (HUF), OF WHICH ASSESSEE IS ONE OF THE MEMBERS. THE INTEREST ON FDR ETC. HAVE BEEN HELD T O BE BELONGING TO THE SAID HUF. THEREFORE, NO ADDITION OF THE SAME INTEREST COULD BE MADE IN THE HANDS OF INDIVID UAL SHRI BALWINDER SINGH. THE LD. CIT(APPEALS), MERELY DISMISSED THE APPEAL OF THE ASSESSEE BECAUSE FOR ASSESSMENT YEAR 1998-99, THE INTEREST INCOME IS NOT TAXED IN THE HANDS OF M/S NASEEB SINGH & SONS (HUF) AS THE HUF DID NOT FILE THE RETURN OF INCOME. MAY BE THE HUF DID NOT FILE RETURN FOR ASSESSMENT YEAR UNDER A PPEAL, 7 BUT IT IS WELL SETTLED LAW THAT INCOME IS TO BE TAX ED IN THE HANDS OF RIGHT PERSON ASSESSABLE UNDER THE INCO ME TAX ACT. SINCE, THE MATTER HAS BEEN SETTLED FINALL Y BY THE SETTLEMENT COMMISSION HOLDING THE INTEREST INCO ME ASSESSABLE IN THE HANDS OF HUF, AND THE LD. CIT(APPEALS) IN SUBSEQUENT YEARS, ACCEPTED THE ORDE R OF THE SETTLEMENT COMMISSION AND DELETED THE ADDITIONS IN INDIVIDUAL HANDS, THEREFORE, THERE IS NO JUSTIFICAT ION TO MAKE ADDITION IN THE INDIVIDUAL CASE OF SHRI BALWIN DER SINGH. 9. IN THIS VIEW OF THE MATTER, I SET ASIDE THE ORDE RS OF AUTHORITIES BELOW AND DELETE THE ENTIRE ADDITION OF INTEREST IN THE HANDS OF ASSESSEE INDIVIDUAL. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA 146/2016 ( SHRI ARVINDER SINGH) ITA 145/2016 ( LATE SHRI NASEEB SINGH ) 11. BOTH THE APPEALS BY ABOVE ASSESSEES ARE DIRECTE D AGAINST DIFFERENT ORDERS OF LD. CIT(APPEALS)-3 LUDH IANA DATED 30.12.2015 FOR ASSESSMENT YEAR 1998-99. 12. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NOS. 1 AND 2 IN BOTH THE APPEALS REGARDING R E- OPENING OF THE ASSESSMENT UNDER SECTION 148 OF THE INCOME TAX ACT. SAME ARE, THEREFORE, DISMISSED BEI NG NOT PRESSED. 8 13. IN THE REMAINING GROUND NOS. 3 AND 4, BOTH THE ASSESSEES HAVE CHALLENGED ASSESSMENT OF INTEREST ON FDRS ETC. IN THE HANDS OF THE ASSESSEE IN THEIR INDIVIDUAL CAPACITY. BOTH THE PARTIES SUBMITTED TH AT ISSUE IS SAME AS HAVE BEEN CONSIDERED IN THE CASE O F SHRI BALWINDER SINGH (SUPRA). FOLLOWING THE ORDER IN THE CASE OF SHRI BALWINDER SINGH (SUPRA), I SET ASI DE THE ORDERS OF AUTHORITIES BELOW AND DELETE THE ENTIRE ADDITION OF INTEREST IN THE HANDS OF BOTH THE ASSES SEES IN THEIR INDIVIDUAL CAPACITY/STATUS. THE ADDITIONS ARE, THEREFORE, DELETED. 14. IN THE RESULT, APPEALS OF THE ASSESSEES ARE PAR TLY ALLOWED. 15. IN THE RESULT, ALL APPEALS OF THE ASSESSEES ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED: 16 TH MAY, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD