K.Vivekanandan, Kumbakonam V. ITO, Kumbakonam

ITA 3288/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4491 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 09-03-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 05-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R DURAI
• Assessee Lawyers: N QUADIR HOSEYN
• Keywords: Gift
• Section: 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI ... , ! ' #, % &' BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ./ ITA NO.3288/MDS/2016 ) *) / ASSESSMENT YEAR : 2006-07 SHRI K. VIVEKANANDAN, 34, SARVAMANYA STREET, MELACAUVERY, KUMBAKONAM 612 001. PAN : AEHPV 9685 H V. THE INCOME TAX OFFICER, WARD I(1), KUMBAKONAM. (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : SHRI N. QUADIR HOSEYN, ADVOCATE ./,- 0 1 / RESPONDENT BY : SHRI R. DURAI PANDIAN, JCIT 2 0 3% / DATE OF HEARING : 09.03.2017 45* 0 3% / DATE OF PRONOUNCEMENT : 24.05.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -2, TIRUCH IRAPPALLI, DATED 17.10.2016 AND PERTAINS TO ASSESSMENT YEAR 20 06-07. 2. SHRI N. QUADIR HOSEYN, THE LD.COUNSEL FOR THE AS SESSEE, SUBMITTED THAT THE ASSESSING OFFICER BY AN ORDER UN DER SECTION 154 2 I.T.A. NO.3288/MDS/16 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') DI SALLOWED THE GIFT RECEIVED BY THE ASSESSEE FROM A HUF. REFERRING TO SECTION 10(2) OF THE ACT, THE LD.COUNSEL SUBMITTED THAT ANY SUM RECE IVED BY AN INDIVIDUAL AS A MEMBER OF A HINDU UNDIVIDED FAMILY, THE SAME CANNOT BE INCLUDED IN THE TOTAL INCOME OF THE ASSES SEE FOR ARRIVING TAXABLE INCOME. THE LD.COUNSEL SUBMITTED THAT IT I S NOBODYS CASE THAT THE PROPERTY BELONGING TO INDIVIDUAL MEMBER OF HUF WAS TRANSFERRED TO HUF, THEREFORE, THE GIFT OF ` 6,00,000/- RECEIVED BY THE ASSESSEE FROM HUF CANNOT BE SUBJECT MATTER OF TAXAT ION. MOREOVER, ACCORDING TO THE LD. COUNSEL, THE ISSUE WHETHER GIFT RECEIVED BY THE ASSESSEE FROM HUF IS TAXABLE IN THE HANDS OF THE ASSESSEE OR NOT IS A DEBATABLE ISSUE, THEREFORE, IT CANNOT BE A SUBJECT MATTER OF DISCUSSION IN A PROCEEDING UNDER SECTION 154 OF THE ACT. 3. ON THE CONTRARY, SHRI R. DURAI PANDIAN, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT IF THE ASSESSEE RECE IVED ANY SUM FROM AND OUT OF INCOME OF THE FAMILY, THEN IT CANNO T BE INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE. IN THIS CASE, AC CORDING TO THE LD. D.R., THE MONEY WAS RECEIVED FROM AND OUT OF ESTATE OF HUF, THEREFORE, PROVISIONS OF SECTION 10(2) OF THE ACT I S NOT APPLICABLE AT ALL. 3 I.T.A. NO.3288/MDS/16 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE IS A MEMBER OF HUF AND RE CEIVED A SUM OF ` 6,00,000/- FROM THE HUF BY WAY OF GIFT. WE HAVE CA REFULLY GONE THROUGH THE PROVISIONS OF SECTION 10(2) OF THE ACT WHICH READS AS FOLLOWS:- 10. IN COMPUTING THE TOTAL INCOME OF A PREVIOUS YEAR OF ANY PERSON, ANY INCOME FALLING WITHIN ANY OF THE FOLLOWING CLAUSES SHALL NOT BE INCLUDED - (1) . .. .. .. .. .. (2) SUBJECT TO THE PROVISIONS OF SUB-SECTION (2) OF SECTION 64, ANY SUM RECEIVED BY AN INDIVIDUAL AS A MEMBER OF A HINDU UNDIVIDED FAMILY, WHERE SUCH SUM HAS BEEN PAID OUT OF THE INCOME OF THE FAMILY, OR, IN THE CASE OF ANY IMPARTIBLE ESTATE WHERE SUCH SUM HAS BEEN PAID OUT OF THE INCOME OF THE ESTATE BELONGING TO THE FAMILY ; 5. IN VIEW OF THE ABOVE, WHEN THE MONEY WAS RECEIVE D BY AN INDIVIDUAL MEMBER OF HUF, FROM AND OUT OF INCOME OF THE FAMILY, OR IN THE CASE OF ANY IMPARTIBLE ESTATE, THE SAME CANN OT BE INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE. IN THE CASE BEFO RE US, THE REVENUE CLAIMS THAT INCOME WAS NOT OF THE FAMILY BU T ARISING OUT OF ESTATE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE INCOME OF THE FAMILY HAS TO BE EITHER FROM THE ESTATE WHICH B ELONGS TO HUF OR 4 I.T.A. NO.3288/MDS/16 BUSINESS WHICH WOULD BE RUN BY HUF. THEREFORE, UNL ESS THERE IS A SOURCE FOR CREATION OF INCOME, THE FAMILY CANNOT HA VE ANY INCOME AT ALL. IN THIS CASE, ADMITTEDLY, THE INCOME WAS SAID TO BE RECEIVED FROM ESTATE WHICH BELONGS TO FAMILY. THEREFORE, TH ERE IS A PRESUMPTION THAT INCOME IS ARISING FROM ESTATE WHIC H BELONGS TO HUF TO WHICH ASSESSEE IS ONE OF THE COPARCENERS/MEM BERS. HENCE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION T HAT THE GIFT OF ` 6,00,000/- RECEIVED CANNOT BE DISALLOWED. 6. MOREOVER, AS RIGHTLY SUBMITTED BY THE LD.COUNSEL FOR THE ASSESSEE, THE ISSUE OF ` 6,00,000/- IS TAXABLE OR NOT IS A DEBTABLE ONE WHICH NEEDS INTERPRETATION OF SECTION 10(2) REA D WITH SECTION 64(2) OF THE ACT. SUCH ISSUE, WHICH IS DEBATABLE N ATURE, CANNOT BE SUBJECT MATTER OF PROCEEDING UNDER SECTION 154 OF T HE ACT. IN VIEW OF THE ABOVE DISCUSSION, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ADDITION MADE BY THE ASSESSING OFFICER IS DELETED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 5 I.T.A. NO.3288/MDS/16 ORDER PRONOUNCED ON 24 TH MAY, 2017 AT CHENNAI. SD/- SD/- ( ! ' # ) ( ... ) (CHANDRA POOJARI) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 24 TH MAY, 2017. KRI. 0 .389 :9*3 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 ;3 () /CIT(A)-2, TIRUCHIRAPPALLI 4. PRINCIPAL CIT, TRICHY-2, TRICHY 5. 9< .3 /DR 6. ) = /GF.