K.S. Gundappa Shetty (HUF), Bengaluru V. Income Tax Officer, Ward-10(2), Bengaluru

ITA 2910/BANG/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5438 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 28-12-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: L V BHASKAR REDDY
• Assessee Lawyers: V CHANDRASEKHAR
• Keywords: Principle of natural justice; Right to appeal

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO S . 2909 TO 2911 / BANG/201 7 ASSESSMENT YEAR S : 2006 - 07 TO 2008 - 09 SHRI K.S. GUNDAPPA SHETTY (HUF), ANJANEYA TEMPLE STREET, UTTARAHALLI, SUBRAMANYAPURA POST, BANGALORE 560 061. PAN: AADHG2727B VS. THE INCOME TAX OFFICER, WARD 10 (2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI V. CHANDRASEKHAR, ADVOCATE RESPONDENT BY : SHRI L.V. BHASKAR REDDY, ADDL. CIT (DR) DATE OF HEARING : 2 2 . 0 3 .2018 DATE OF PRONOUNCEMENT : 22 . 0 3 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER ALL THESE THREE APPEALS ARE FILED BY THE ASSESSEE W HICH ARE DIRECTED AGAINST THREE SEPARATE ORDERS OF LD. CIT(A)-3, BANGALORE AL L DATED 27.10.2017 FOR ASSESSMENT YEARS 2006-07, 2007-08 AND 2008-09. 2. THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMEN T YEAR 2006-07 IN ITA NO. 2909/BANG/2017 ARE AS UNDER. 1. THE ORDER OF THE LEARNED AUTHORITIES BELOW IN SO FAR AS IT IS AGAINST THE APPELLANT, IS OPPOSED TO LAW, WEIGHT OF EVIDENC E, NATURAL JUSTICE, PROBABILITIES ON FACTS AND CIRCUMSTANCES OF CASE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] IS NOT JUSTIFIED IN DISMISSING THE APPEAL PREFERRED BY THE APPELLANT BY HOLDING THAT THE APPELLANT HUF CANNOT CHALLENGE THE ORDER PASSED BY THE LEARNED ASSESSING OFFICER IN THE CASE OF INDIVIDUAL, WITHOU T APPRECIATING THAT THE APPELLANT HUF WAS AN AGGRIEVED PERSON HAVING RE GARD TO THE ASSESSMENT OF THE INCOME BELONGING TO THE APPELLANT HUF, IN THE HANDS OF THE SRI. K.S. GUNDAPPA SHETTY, INDIVIDUAL CAPACITY AND HENCE THE APPELLANT HAD A VESTED RIGHT TO FILE AN APPEAL AS PER THE PROVISIONS OF SECTION 246A[1] OF THE ACT, ON THE FACTS AND CIR CUMSTANCES OF THE ITA NOS. 2909 TO 2911/BANG/2017 PAGE 2 OF 6 CASE. 3. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] AND THE LEARNED ASSESSING OFFICER OUGHT TO HAVE APPRECIATED THAT THE SAID TRANSACTIONS OF THE AOP HAS BEEN OFFERED BY THE APP ELLANT IN ITS RETURN OF INCOME IN THE STATUS OF HUF, ON THE FACTS AND CI RCUMSTANCES OF THE CASE. 4. THE LEARNED AUTHORITIES BELOW FAILED TO APPRECIA TE THAT THE TRANSACTIONS OF AOP IN WHICH THE APPELLANT HUF WAS ONE OF THE MEMBER IS THE INVESTMENT BY THE APPELLANT HUF AND T REATING THE TRANSACTION OF AOP AND BRINGING TO TAX IN THE HANDS OF SRI. K.S. GUNDAPPA SHETTY [INDIVIDUAL] IS UNCALLED FOR AND TH E ORDER PASSED BY THE LEARNED AUTHORITIES IS BAD IN LAW. FURTHER, THE LEARNED AUTHORITIES BELOW WERE NOT JUSTIFIED IN BRINGING THE SAID TRANS ACTION INTO THE TAX AMBIT IN THE INDIVIDUAL CAPACITY OF SRI. K.S. GUNDA PPA SHETTY AS THE SAME IS ASSESSED IN THE WRONG STATUS WHICH REQUIRES TO BE CANCELLED, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. WITHOUT PREJUDICE THE LEARNED COMMISSIONER OF IN COME-TAX [APPEALS] IS NOT JUSTIFIED IN NOT ADJUDICATING ALL THE GROUNDS RAISED BY THE APPELLANT WHICH IS IN GRAVE VIOLATION OF PRINCI PLES OF NATURAL JUSTICE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. WITHOUT PREJUDICE THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED IN ADDING A SUM OF RS. 7,51,226/- AS SHORT-TERM CAPITA L GAINS FROM SALE OF SITES BY THE AOP, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. WITHOUT PREJUDICE THE LEARNED AUTHORITIES ARE NO T JUSTIFIED IN NOT ALLOWING THE APPELLANT'S SHARE OF DEVELOPMENTAL EXP ENDITURE INCURRED BY THE AOP FOR THE PURPOSE OF FORMATION OF RESIDENT IAL LAYOUT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THE LEARNED AUTHORITIES BELOW FAILED TO APPRECIA TE THAT THE APPELLANT HUF HAS DISCLOSED THE PROFIT FROM THE TRA NSACTIONS FROM THE AOP IN ITS RETURN AND CONSEQUENTLY THE RE-OPENING I N THE INDIVIDUAL STATUS OF SRI. K.S. GUNDAPPA SHETTY IS BAD IN LAW, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 9. THE APPELLANT CRAVES LEAVE OF THIS HON'BLE TRIBU NAL TO ADD, ALTER, AMEND, MODIFY, DELETE OR SUBSTITUTE ANY OF THE GROU NDS URGED ABOVE. 10. IN VIEW OF THE ABOVE AND OTHER GROUNDS AS MAY B E URGED AT THE TIME OF HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED IN THE INTEREST OF JUSTICE AND EQUITY. 3. THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMEN T YEAR 2007-08 IN ITA NO. 2910/BANG/2017 ARE AS UNDER. ITA NOS. 2909 TO 2911/BANG/2017 PAGE 3 OF 6 1. THE ORDER OF THE LEARNED AUTHORITIES BELOW IN SO FAR AS IT IS AGAINST THE APPELLANT, IS OPPOSED TO LAW, WEIGHT OF EVIDENC E, NATURAL JUSTICE, PROBABILITIES ON FACTS AND CIRCUMSTANCES OF CASE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] IS NOT JUSTIFIED IN DISMISSING THE APPEAL PREFERRED BY THE APPELLANT BY HOLDING THAT THE APPELLANT HUF CANNOT CHALLENGE THE ORDER PASSED BY THE LEARNED ASSESSING OFFICER IN THE CASE OF INDIVIDUAL, WITHOU T APPRECIATING THAT THE APPELLANT HUF WAS AN AGGRIEVED PERSON HAVING RE GARD TO THE ASSESSMENT OF THE INCOME BELONGING TO THE APPELLANT HUF, IN THE HANDS OF THE SRI. K.S. GUNDAPPA SHETTY, INDIVIDUAL CAPACITY AND HENCE THE APPELLANT HAD A VESTED RIGHT TO FILE AN APPEAL AS PER THE PROVISIONS OF SECTION 246A[1] OF THE ACT, ON THE FACTS AND CIR CUMSTANCES OF THE CASE. 3. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] AND THE LEARNED ASSESSING OFFICER OUGHT TO HAVE APPRECIATED THAT THE SAID TRANSACTIONS OF THE AOP HAS BEEN OFFERED BY THE APP ELLANT IN ITS RETURN OF INCOME IN THE STATUS OF HUF, ON THE FACTS AND CI RCUMSTANCES OF THE CASE. 4. THE LEARNED AUTHORITIES BELOW FAILED TO APPRECIA TE THAT THE TRANSACTIONS OF AOP IN WHICH THE APPELLANT HUF WAS ONE OF THE MEMBER IS THE INVESTMENT BY THE APPELLANT HUF AND T REATING THE TRANSACTION OF AOP AND BRINGING TO TAX IN THE HANDS OF SRI. K.S. GUNDAPPA SHETTY [INDIVIDUAL] IS UNCALLED FOR AND TH E ORDER PASSED BY THE LEARNED AUTHORITIES IS BAD IN LAW. FURTHER, THE LEARNED AUTHORITIES BELOW WERE NOT JUSTIFIED IN BRINGING THE SAID TRANS ACTION INTO THE TAX AMBIT IN THE INDIVIDUAL CAPACITY OF SRI. K.S. GUNDA PPA SHETTY AS THE SAME IS ASSESSED IN THE WRONG STATUS WHICH REQUIRES TO BE CANCELLED, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. WITHOUT PREJUDICE THE LEARNED COMMISSIONER OF IN COME-TAX [APPEALS] IS NOT JUSTIFIED IN 0 NOT ADJUDICATING AL L THE GROUNDS RAISED BY THE APPELLANT WHICH IS IN GRAVE VIOLATION OF PRI NCIPLES OF NATURAL JUSTICE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. WITHOUT PREJUDICE THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED IN ADDING A SUM OF RS. 22,75,757/- AS SHORT-TERM CAPIT AL GAINS FROM SALE OF SITES BY THE AOP, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. WITHOUT PREJUDICE THE LEARNED AUTHORITIES ARE NO T JUSTIFIED IN NOT ALLOWING THE APPELLANT'S SHARE OF DEVELOPMENTAL EXP ENDITURE INCURRED BY THE AOP FOR THE PURPOSE OF FORMATION OF RESIDENT IAL LAYOUT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THE LEARNED AUTHORITIES BELOW FAILED TO APPRECIA TE THAT THE APPELLANT HUF HAS DISCLOSED THE PROFIT FROM THE TRA NSACTIONS FROM THE AOP IN ITS RETURN AND CONSEQUENTLY THE RE-OPENING I N THE INDIVIDUAL ITA NOS. 2909 TO 2911/BANG/2017 PAGE 4 OF 6 STATUS OF SRI. K.S. GUNDAPPA SHETTY IS BAD IN LAW, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 9. THE APPELLANT CRAVES LEAVE OF THIS HON'BLE TRIBU NAL TO ADD, ALTER, AMEND, MODIFY, DELETE OR SUBSTITUTE ANY OF THE GROU NDS URGED ABOVE. 10. IN VIEW OF THE ABOVE AND OTHER GROUNDS AS MAY B E URGED AT THE TIME OF HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED IN THE INTEREST OF JUSTICE AND EQUITY. 4. THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMEN T YEAR 2008-09 IN ITA NO. 2911/BANG/2017 ARE AS UNDER. 1. THE ORDER OF THE LEARNED AUTHORITIES BELOW IN SO FAR AS IT IS AGAINST THE APPELLANT, IS OPPOSED TO LAW, WEIGHT OF EVIDENC E, NATURAL JUSTICE, PROBABILITIES ON FACTS AND CIRCUMSTANCES OF CASE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] IS NOT JUSTIFIED IN DISMISSING THE APPEAL PREFERRED BY THE APPELLANT BY HOLDING THAT THE APPELLANT HUF CANNOT CHALLENGE THE ORDER PASSED BY THE LEARNED ASSESSING OFFICER IN THE CASE OF INDIVIDUAL, WITHOU T APPRECIATING THAT THE APPELLANT HUF WAS AN AGGRIEVED PERSON HAVING RE GARD TO THE ASSESSMENT OF THE INCOME BELONGING TO THE APPELLANT HUF, IN THE HANDS OF THE SRI. K.S. GUNDAPPA SHETTY, INDIVIDUAL CAPACITY AND HENCE THE APPELLANT HAD A VESTED RIGHT TO FILE AN APPEAL AS PER THE PROVISIONS OF SECTION 246A[1] OF THE ACT, ON THE FACTS AND CIR CUMSTANCES OF THE CASE. 3. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] AND THE LEARNED ASSESSING OFFICER OUGHT TO HAVE APPRECIATED THAT THE SAID TRANSACTIONS OF THE AOP HAS BEEN OFFERED BY THE APP ELLANT IN ITS RETURN OF INCOME IN THE STATUS OF HUF, ON THE FACTS AND CI RCUMSTANCES OF THE CASE. 4. THE LEARNED AUTHORITIES BELOW FAILED TO APPRECIA TE THAT THE TRANSACTIONS OF AOP IN WHICH THE APPELLANT HUF WAS ONE OF THE MEMBER IS THE INVESTMENT BY THE APPELLANT HUF AND T REATING THE TRANSACTION OF AOP AND BRINGING TO TAX IN THE HANDS OF SRI. K.S. GUNDAPPA SHETTY [INDIVIDUAL] IS UNCALLED FOR AND TH E ORDER PASSED BY THE LEARNED AUTHORITIES IS BAD IN LAW. FURTHER, THE LEARNED AUTHORITIES BELOW WERE NOT JUSTIFIED IN BRINGING THE SAID TRANS ACTION INTO THE TAX AMBIT IN THE INDIVIDUAL CAPACITY OF SRI. K.S. GUNDA PPA SHETTY AS THE SAME IS ASSESSED IN THE WRONG STATUS WHICH REQUIRES TO BE CANCELLED, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. WITHOUT PREJUDICE THE LEARNED COMMISSIONER OF IN COME-TAX [APPEALS] IS NOT JUSTIFIED IN NOT ADJUDICATING ALL THE GROUNDS RAISED BY THE APPELLANT WHICH IS IN GRAVE VIOLATION OF PRINCI PLES OF NATURAL JUSTICE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. WITHOUT PREJUDICE THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED IN ADDING A SUM OF RS. 7,36,466/- AS SHORT-TERM CAPITA L GAINS FROM SALE ITA NOS. 2909 TO 2911/BANG/2017 PAGE 5 OF 6 OF SITES BY THE AOP, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. WITHOUT PREJUDICE THE LEARNED AUTHORITIES ARE NO T JUSTIFIED IN NOT ALLOWING THE APPELLANT'S SHARE OF DEVELOPMENTAL EXP ENDITURE INCURRED BY THE AOP FOR THE PURPOSE OF FORMATION OF RESIDENT IAL LAYOUT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THE LEARNED AUTHORITIES BELOW FAILED TO APPRECIA TE THAT THE APPELLANT HUF HAS DISCLOSED THE PROFIT FROM THE TRA NSACTIONS FROM THE AOP IN ITS RETURN AND CONSEQUENTLY THE RE-OPENING I N THE INDIVIDUAL STATUS OF SRI. K.S. GUNDAPPA SHETTY IS BAD IN LAW, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 9. THE APPELLANT CRAVES LEAVE OF THIS HON'BLE TRIBU NAL TO ADD, ALTER, AMEND, MODIFY, DELETE OR SUBSTITUTE ANY OF THE GROU NDS URGED ABOVE. 10. IN VIEW OF THE ABOVE AND OTHER GROUNDS AS MAY B E URGED AT THE TIME OF HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED IN THE INTEREST OF JUSTICE AND EQUITY. 5. THE LD. AR OF ASSESSEE SUBMITTED THAT LD. CIT(A) HAS DISMISSED THESE THREE APPEALS OF ASSESSEE BY HOLDING THAT ASSESSEE HUF CA NNOT CHALLENGE THE ORDER PASSED BY THE AO IN THE CASE OF INDIVIDUAL WITHOUT APPRECIATING THAT THE ASSESSEE HUF IS AGGRIEVED BECAUSE OF THE ASSESSMENT OF INCOME BELONGING TO IT IN THE HANDS OF SHRI GUNDAPPA SHETTY INDIVIDUAL. AT THIS JUNCTURE, THE BENCH OBSERVED THAT HOW HUF CAN BE AGGRIEVED AGAINST ANY ADDITION MADE BY THE AO IN THE HANDS OF ANY INDIVIDUAL. IN REPLY, THE LD. AR OF ASSESSEE COULD NOT SATISFY AS TO HOW THE ASSESSEE HUF IS AN AGGRIEVED PERSON A GAINST THE ASSESSMENT ORDER PASSED IN THE HANDS OF THE HUF. HENCE I HOLD THAT IN THE FACTS OF THE PRESENT CASE, NO INTERFERENCE IS CALLED FOR IN THE THREE IMPUGNED ORDERS OF CIT(A). 6. IN THE RESULT, ALL THE THREE APPEALS FILED BY TH E ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 22 ND MARCH, 2018. /MS/ ITA NOS. 2909 TO 2911/BANG/2017 PAGE 6 OF 6 COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.