Asstt. CIT Cir. 2, Nashik V. Shri Kisanlal Bastiram Sarda, L/H of late Smt. Rampyarbai B Sarda, Nashik

ITA 491/PUN/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3352 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 08-04-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJU AJAWANI
• Assessee Lawyers: B V ZAVERI
• Keywords: Gift; Assessment record; TDS
• Section: 208; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, B PUNE BEFORE SHRI I.C. SUDHIR, JM AND SHRI R.C. SHARMA, AM I.T.A. NO. 491/PN/2008: A.Y. 2004-05 ASSTT. CIT CIR. 2, NASIK APPELLANT VS. SHRI KISANLAL BASTIRAM SARDA L/H OF LATE SMT RAMPYARBAI B SARDA SARDA HOUSE, GODAVARI KINARA OLD GANGAPUR NAKA, GANGAPUR ROAD, NASIK. PAN ANPPS 0182 B RESPONDENT APPELLANT BY : SMT. MANJU AJAWANI RESPONDENT BY: SHRI B.V. ZAVERI ORDER PER I.C. SUDHIR, JM THE REVENUE HAS QUESTIONED THE FIRST APPELLATE ORD ER MAINLY ON THE GROUND THAT THE LEARNED CIT(A) HAS ER RED IN DELETING THE ADDITION MADE BY THE A.O ACCEPTING THE EXPLANATION OF THE ASSESSEE WITH REGARDS TO HIS SEP ARATION OF OWNERSHIP OF HOUSE PROPERTY BETWEEN THE ASSESSEE AN D HER GRAND DAUGHTERS. 2. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADVAN CED BY THE PARTIES IN VIEW OF THE ORDERS OF LOWER AUTHO RITIES. ITA NO. 491/PN/2008 KISANLAL B SARDA A.Y. 2004-05 2 3. THE RELEVANT FACTS ARE THAT DURING THE YEAR, THE ASSESSEE HAD SHOWN INCOME FROM HOUSE PROPERTY IN HER RETURN AT RS. 15,54,000/- WHEREAS THE A.O HAD COMPUTED THE SAME A T RS. 30,71,000/-. THE RENTAL INCOME HAS BEEN DERIVED FR OM LETTING OUT OFFICE PREMISES IN NIRMAL BUILDING AT BOMBAY TO SICOM LTD. THE LEARNED CIT(A) HAS DELETED THE ADDITION A CCEPTING THE SUBMISSIONS OF THE ASSESSEE IN THIS REGARD. THE CA SE OF THE ASSESSEE REMAINED THAT SHE HAD PURCHASED 200 SHARES OF M/S. SHRI NIRMAL COMMERCIAL PVT. LTD., FOR RS. 100/- EAC H WAY BACK ON 20-10-1961. OUT OF THE SAID 200 SHARES, 100 SHA RES WERE PURCHASED BY THE ASSESSEE FOR THE BENEFIT OF HER MI NOR GRAND DAUGHTER MISS. KALPANA DEVIKISAN SARDA AND MISS. SA NGEETA DEVIKISAN SARDA. PURSUANT TO THE AFORESAID PURCHAS E OF 200 SHARES, M/S. SHRI NIRMAL COMMERCIAL PVT. LTD., ALLO TTED 2000 SQ.FT. AREA ON THE GROUND FLOOR OF THE BUILDING KNO WN AS NIRMAL SITUATED AT NARIMAN POINT, BOMBAY. AT THE TIME OF ALLOTMENT OF THE PREMISES IN NIRMAL BUILDING, THE A SSESSEE PAID NON-REFUNDABLE DEPOSIT OF RS. 45,000/- TO M/S. SHRI NIRMAL COMMERCIAL PVT. LTD., FOR 1000 SQ.FT. AREA A LLOTTED TO HER. SIMILARLY, SHRI DEVIKISAN B. SARDA HAD PAID A NON- REFUNDABLE DEPOSIT OF RS. 45,000/- TO M/S. SHRI NIR MAL COMMERCIAL PVT. LTD., FOR 1000 SQ.FT. AREA ON THE S ECOND FLOOR OF NIRMAL BUILDING FOR 100 SHARES HELD BY HIS DAUGH TERS VIZ. MISS KALPANA DEVIKISAN SARDA AND MISS SANGEETA DEVI KISAN SARDA. THERE WAS SOME DISPUTE WITH SICOM LTD. OVER THE RATE ITA NO. 491/PN/2008 KISANLAL B SARDA A.Y. 2004-05 3 OF LICENCE FEE BEING PAID BY IT TO THE ASSESSEE AND OTHERS. IN VIEW OF THE SETTLEMENT SICOM LTD., PAID THE DIFFERE NCE IN THE LICENCE FEES AGGREGATING TO RS. 27,06,000/- BY TWO CHEQUES OF RS. 12,96,000/- AND RS. 14,10,000/-. THE ASSESSEE (LATE SMT. RAMPYARIBAI BASTIRAM SARDA, L/H SHRI KISANLAL BASTI RAM SARDA) BEING ENTITLED TO 50% OF THE SAID INCREASE I N THE LICENCE FEE, SHE DECLARED RS. 15,54,000/- AS HER INCOME UND ER THE HEAD INCOME FROM HOUSE PROPERTY FOR A.Y. 2004-05 AND THE BALANCE LICENCE FEE WAS OFFERED FOR TAXATION BY MI SS SANGEETA DEVIKISAN SARDA (MARRIED NAME SMT. SANGEETA AJAY SO NI) AND MISS KALPANA DEVIKISAN SARDA (MARRIED NAME SMT. SHO BHA ASHOK KARWA) IN THEIR RESPECTIVE RETURNS OF INCOME FOR A.Y. 2005-06 AS THEY HAD RECEIVED THE SAID INCREASE IN R ENT FROM THE ASSESSEE IN THE MONTH OF APRIL 2004. DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THE A.O PROPOSED TO TAX THE ENTIRE ACTUAL RECEIPT OF RENT IN THE ASSESSEES HAND AS PE R TDS CERTIFICATE. THE SUBMISSION OF THE ASSESSEE REMAIN ED THAT THE BENEFICIAL OWNERSHIP OF RENTAL INCOME OF THE PROPER TY WHICH IS TO BE ENJOYED BY THE ASSESSEE AND HER TWO GRAND DAU GHTERS IN THE RATIO OF 2:1:1 WAS ACCEPTED BY THE DEPARTMENT F ROM THE YEAR 1961. THE AUTHORIZED REPRESENTATIVE OF THE AS SESSEE PRODUCED ASSESSMENT ORDERS OF THE ASSESSEE FOR A.Y. 1969-70 PASSED BY THE ITO, E-WARD, NASIK WHEREIN IT WAS DIS CUSSED THAT THE ASSESSEE WAS ENTITLED FOR 1000 SQ.FT. OF A REA IN M/S. SHRI NIRMAL COMMERCIAL PVT. LTD. THE A.O DID NOT A GREE WITH ITA NO. 491/PN/2008 KISANLAL B SARDA A.Y. 2004-05 4 THIS SUBMISSION OF THE ASSESSEE ON THE BASIS THAT T HERE WAS NO MATERIAL EVIDENCE TO SUPPORT THAT THE ASSESSEE AND HER GRAND DAUGHTERS JOINTLY HELD THE OWNERSHIP OF THE SAID PR OPERTY. THE A.O MENTIONED FURTHER THAT THERE WAS NO GIFT DEED O R ANY AGREEMENT PRODUCED BY THE ASSESSEE IN THIS REGARD. IN THESE CIRCUMSTANCES, THE A.O ASSESSED THE ENTIRE SUM OF A CTUAL RENTAL RECEIPT IN THE HANDS OF THE ASSESSEE. 4. WE FIND THAT BEFORE THE LEARNED CIT(A) THE LEARN ED AR FILED DETAILED SUBMISSIONS AND PRODUCED THE DETAILS OF ASSESSMENT ORDERS FOR VARIOUS ASSESSMENT YEARS RELA TING TO SMT. SANGEETA AJAY SONI (BEFORE MARRIAGE MISS SANGE ETA DEVIKISAN SARDA) AND SMT. SBOBHA AJAY KARWA (BEFORE MARRIED NAME MISS KALPANA DEVIKISAN SARDA). THE FURTHER CO NTENTION OF THE ASSESSEE REPRODUCED BY THE LEARNED CIT(A) AT PAGES 3 AND 4 REMAINED AS UNDER: I) THE FACT THAT BENEFICIAL OWNERSHIP IN THE RENTA L INCOME OF THE PROPERTY WHICH IS TO BE ENJOYED BY TH E APPELLANT AND HER TWO GRAND DAUGHTERS IN THE RATIO OF 2:1:1 WAS ACCEPTED BY THE DEPARTMENT IN 1967 .AS PE R THE ASSESSMENT ORDER FOR THE A.Y.1969-1970 IN HER CASE. ACCORDINGLY, THE SAME HAS BEEN REFLECTED IN A LL THE YEARS, WHICH IS ACCEPTED. II) THE MATTER WAS ENQUIRED INTO BY THE INCOME-TAX OFFICER, SECTION 11 (CENTRAL) BOMBAY IN 1973 AND NO ADVERSE INFERENCE WAS DRAWN IN THIS REGARD. COPY OF THE APPELLANT'S LETTER DATED 23.08.1973 IS FILED. III) AS PER THE INCOME-TAX RETURNS FILED BY THE TWO OF HER GRAND DAUGHTERS FOR VARIOUS ASSESSMENT YEARS, I T CAN BE SEEN THAT THE SHARE OF RENTAL INCOME HAS BEE N DULY REFLECTED. ITA NO. 491/PN/2008 KISANLAL B SARDA A.Y. 2004-05 5 IV) BOTH THE GRAND DAUGHTERS HAVE SHOWN THEIR SHARE S OF WEALTH OF PROPERTY IN THEIR WEALTH-TAX RETURNS F OR THE A.YS 1971-1972 TO 19911992. V) THE ACCOUNTS OF THE APPELLANT ALONG WITH THE ASSESSMENT RECORDS FOR MORE THAN TWO DECADES PROVE BEYOND DOUBT THAT THE APPELLANT WAS ENTITLED TO 100 , SHARES AND ACCORDINGLY ENTITLED TO ONLY 50% (I.E. 1 000 SQ,FT. OF AREA) IN THE SAID PROPERTY. VI) THE TAX E FFECT IF THE INCOME ASSESSED IN THE HANDS OF THE APPELLANT O R IN THE HANDS OF THE GRAND DAUGHTERS IS THE SAME. AS SUCH, NO PURPOSE WOULD BE SERVED BY RE-OPENING THE ISSUE WHICH HAS BEEN SETTLED FROM 1967 TILL DATE AN D TREATING THE INCOME DIFFERENTLY THAN HOW IT WAS TRE ATED IN THE EARLIER YEARS. THE APPELLANT ALSO RELIED ON THE DECISIONS FOLLOWING DECISIONS IN SUPPORT OF THIS CONTENTION: I) RADHASWAMY SATSANG VS. CIT 193 ITR 321. IL) CIT VS. INDIA FORGE & DROP STAMPINGS LTD. 240 ITR 208 (MAD) III) ITO VS. M/S. RAM HOUSE LTD. (ITA NO.2378JMUM/04 DATED 09.10.2007) 5. ACCEPTING THE ABOVE SUBMISSIONS, THE LEARNED CIT (A) HAS DELETED THE ADDITION IN QUESTION. WHILE DOING SO, THE LEARNED CIT(A) HAS OBSERVED THAT THE A.O HIMSELF HAS STATED THE FACT THAT THE DEPARTMENT MENTIONED ABOUT THE ASSESSEES SHARE IN THE SAID PROPERTY AS 1000 SQ.FT. IN HER OWN ASSESSM ENT FOR THE A.Y. 1969-70. ACCORDINGLY, THE GRAND DAUGHTERS OF THE ASSESSEE HAVE BEEN ADMITTING THEIR SHARES OF INCOME FROM THE SAID PROPERTY IN VARIOUS SUBSEQUENT YEARS AND ALSO REFLECTING THEIR SHARES OF THE PROPERTY IN THEIR WEALTH-TAX RE TURNS. IN SUPPORT, COPIES OF RETURNS WERE FILED BEFORE THE A. O. THE DEPARTMENT HAS BEEN ACCEPTING THE RETURNS OF THESE YEARS WITHOUT ANY DISPUTE. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE LEARNED CIT(A) HAS RIGHTLY COME T O THE ITA NO. 491/PN/2008 KISANLAL B SARDA A.Y. 2004-05 6 CONCLUSION THAT SUBSTANTIAL PROOF /EVIDENCE IS AVAI LABLE WITH THE DEPARTMENT ITSELF. THIS OBSERVATION OF THE LEA RNED CIT(A) HAVE NOT BEEN REBUTTED BY THE REVENUE BEFORE US. W E ARE THUS NOT REQUIRED TO INTERFERE WITH THE FINDING OF THE L EARNED CIT(A) ON THE ISSUE. THE SAME IS UPHELD. GROUND IS ACCOR DINGLY REJECTED. 6. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST 2010. SD/- SD/- (R.C. SHARMA) (I.C. SUDHIR) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE,DATED THE 31 ST AUGUST 2010 ANKAM COPY FORWARDED TO: (1) ASSESSEE (2) DEPARTMENT (3) CIT(A)-II NASIK (4) CIT I NASIK (4) THE D.R. B BENCH, PUNE TRUE COPY BY ORDER, ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, PUNE BENCHES, PUNE