Pradyot Kumar Rath, Bhubaneswar V. ITO, Bhubaneswar

ITA 506/CTK/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90829 (ITAT-CUTTACK)
• Duration Of Justice: 3 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2015
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 18-05-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 12-12-2011
• Court: TRIBUNAL
• Department Lawyers: SHOVAN KRISHNA SAHU
• Assessee Lawyers: P C SETHI

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH , CUTTACK [ , . . , BEFORE SHRI SUNIL KUMAR YADAV , J M & SHRI B.P.JAIN , A M ./ ITA NO S . 502 TO 506 / CTK /20 1 1 ( [ [ / ASSESSMENT YEAR S : 1998 - 99 TO 2001 - 02 & 2003 - 04 ) SRI PRADYOT KUMAR RATH, L/H OF LATE SHRI PRAVAKAR RATH, PLOT NO.121, BUDHESWARI COLONY, BHUBANESWAR, DISTRICT KHURDA. VS. ITO, WARD - 1(1), BHUBANESWAR - 751007 ./ ./ PAN/GIR NO. : A EZPR 4258 L ( / APPELLANT ) .. ( / RESPONDENT ) [ /ASSESSEE BY : SHRI P.C.SETHI /REVENUE BY : SHRI SHOVAN KRISHNA SAHU / DATE OF HEARING : 18 TH MAY , 201 5 / DATE OF PRONOUNCEMENT 18 TH MA Y ,2015 / O R D E R PER SUNIL KUMAR YADAV ( J .M) : TH ESE APPEAL S ARE PREFERRED BY THE ASSESSEE AGAINST THE CONSOLIDATED ORDER OF CIT(A) - I , BHUBANESWAR PERTAINING TO ASSESSMENT YEARS 1998 - 1999 TO 2001 - 02 & 2003 - 04, RESPECTIVELY , ON COMMON GROUNDS AND FOR THE SAKE OF REFERENCE, WE EXTRACT THE GROUND S RAISED IN APPEAL FOR ASSESSMENT YEAR 1998 - 99 I.E. ITA NO.502/CTK/2011 AS UNDER: - 1. THAT, THE LEARNED CIT (A) HAS COMMITTED SERIOUS ERROR IN NOT ACC EPTING THE EVIDENCE THAT HAS BEEN PRODUCED BEFORE HIM AND CONFIRMED THE ORDER OF THE LEARNED ASSESSING OFFICER WHICH IS CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND FOR WHICH THE INCOME FROM HOUSE PROPERTY IS LIABLE TO BE DELETED FROM THE HANDS OF THE APPELLANT. 2. THAT, THE LEARNED CIT (A) HAS ERRED BOTH IN LAW AND IN FACT IN NOT ACCEPTING THE EVIDENCE PRODUCED BEFORE HIM REGARDING THE PROPERTY OWNED BY THE HUF AND NOT OWNED BY THE APPELLANT INDIVIDUAL . 3. THE COST OF THE APPEAL MAY BE GIVEN TO THE APPELLANT. ITA NOS.502 - 506/11 2 2. THE CONTROVERSY INVOLVED IN THESE APPEALS IS WITH REGARD TO THE ASSESSMENT OF RENTAL INCOME FROM THE RESIDENTIAL PROPERTY . ACCORDING TO THE ASSESSEE, THE IMPUGNED RESIDENTIAL HOUSE WAS CONSTRUCTED BY THE HUF, THEREFORE, THE RENTAL INCOM E FROM THE RESIDENTIAL HOUSE SHOULD BE ASSESSED IN THE HANDS OF THE HUF, WHEREAS THE REVENUE HAS TREATED THIS RENTAL INCOME FROM THE RESIDENTIAL HOUSE IN THE HANDS OF THE ASSESSEE AND ASSESSED THE SAME. A PPEAL S W ERE PREFERRED BEFORE THE CIT(A) BUT THE ASSE SSEE DID NOT FIND FAVOUR WITH HIM. NOW, THE ASSESSEE IS BEFORE US. 3. IN SUPPORT OF HIS CONTENTION, LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION THAT ASSESSEE IS A SALARIED EMPLOYEE AND HAS NOT SHOWN THE RENTAL INCOME IN ITS OWN HANDS IN ANY OF THE ASSESSMENT YEAR, AS THE SAME WAS SHOWN IN THE HANDS OF THE HUF RIGHT FROM ASSESSMENT YEAR 1973 - 74. COPY OF THE RETURNS AND ACKNOWLEDGEMENT ARE FILED AT PAGE NOS.1 TO 47 OF THE COMPILATION OF THE ASSESSEE. LD. AR OF THE ASSESSEE HAS ALSO ADMITTED THAT V ARIOUS RETURNS FOR THE ASSESSMENT YEARS 1973 - 74, 1974 - 75 AND 1975 - 76 WERE FILED AT ONE GO I.E. ON 27 - 8 - 1975 AND THE ASSESSMENTS WERE FRAMED U/S.143(1) OF THE ACT. LD. COUNSEL FOR THE ASSESSEE HAS ALSO INVITED OUR ATTENTION TO THE RETURN OF INCOME FOR THE A SSESSMENT YEAR 1976 - 77 FILED ON 31 - 7 - 1976 APPEARING AT PAGE NO.29 TO 33 OF THE COMPILATION OF THE ASSESSEE IN WHICH THE STATUS OF THE ASSESSEE WAS SHOWN AS HUF AND THE RETURN OF INCOME FROM THE PROPERTY WAS SHOWN THEREIN. BESIDES, LD. AR ALSO DREW OUR ATT ENTION TO THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 1977 - 78 AND 1978 - 79 APPEARING AT PAGE NO.37 TO 47 OF THE COMPILATION OF THE ASSESSEE. IT WAS FURTHER CONTENDED ITA NOS.502 - 506/11 3 THAT SINCE THE ASSESSEE HAS BEEN SHOWING THE RETURN OF INCOME FROM THE IMMOVABLE PROPERTY RIGHT FROM 1973 - 74 IN THE HANDS OF THE HUF, THE SAME RENT CANNOT BE ASSESSED IN THE HANDS OF THE ASSESSEE. THEREFORE, THE ADDITION MADE ON ACCOUNT OF RENTAL INCOME IN THE HANDS OF THE ASSESSEE MAY KINDLY BE DELETED. 4. PER CONTRA , LD. DR, ON THE OTHER HAND , INVITED OUR ATTENTION TO CERTAIN RETURN OF INCOME IN WHICH STATUS OF THE ASSESSEE WAS SHOWN TO BE INDIVIDUAL. IT WAS FURTHER CONTENDE 0 D THAT WHERE EVEN THE ASSESSEE IS A HUF , T HE WORD HUF IS ALWAYS MENTIONED AGAINST THE NAME TO IDENTIFY THE STATUS OF T HE ASSESSEE . B UT IN BOTH THE RETURNS EITHER IN THE STATUS OF THE HUF OR INDIVIDUAL SAME NAME OF THE ASSESSEE IS SHOWN . THEREFORE, THE AO H AS RIGHTLY ASSESSED THE INCOME FROM THE RESIDENTIAL PROPERTY IN THE NAME OF THE ASSESSEE IN INDIVIDUAL CAPACITY. 5. HA VING REGARD TO THE VARIOUS ORDERS OF THE AUTHORITIES BELOW IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT UNDISPUTEDLY THE RETURNS WERE FILED BY THE ASSESSEE AS A HUF RIGHT FROM THE ASSESSMENT YEAR 1973 - 74 ONWARDS. IN SOME OF THE RETURN THE STATUS WAS SHOWN TO BE INDIVIDUAL BUT LATER ON THE STATUS WAS SHOWN TO BE HUF AND THE RENTAL INCOME FROM THE PROPERTY WAS OFFERED TO TAX IN THE HANDS OF THE HUF. WE HAVE ALSO NOTICED THAT IN THE IMPUGNED ASSESSMENT YEARS, THE SUBSTANTIAL AMOUNT OF THE RENTAL INCOME WAS SHOWN BY THE ASSESSEE. NOW, THE ISSUE BEFORE US IS IN WHOSE HANDS THE RENTAL INCOME FROM THE PROPERTY IS TO BE ASSESSED. FROM THE MATERIAL AVAILABLE ON RECORD, IT IS EVIDENT THAT THOUGH THE NAMES OF THE ASSESSEE ARE SAME IN BOTH THE RETURNS BUT THE STA TUS ARE DIFFERENT. IN CASE ITA NOS.502 - 506/11 4 OF INDIVIDUAL THE RENTAL INCOME WAS NOT OFFERED TO TAX, WHEREAS IN CASE OF HUF THE RENTAL INCOME WAS OFFERED TO TAX. BUT THE REVENUE HAS ASSESSED THE RENTAL INCOME IN THE HANDS OF THE INDIVIDUAL. SINCE THE ASSESSEE PLACED SUFFIC IENT MATERIAL ON RECORD TO ESTABLISH THE RENTAL INCOME IS TO BE ASSESSED IN THE HANDS OF THE HUF AS THE REVENUE HAS NOT RAISED ANY OBJECTION IN THE BEGINNING AND COMPLETED THE ASSESSMENT IN THE HANDS OF THE HUF ASSESSING THE RENTAL INCOME THEREIN, THE REV ENUE CANNOT TAKE DIFFERENT STAND IN THE IMPUGNED ASSESSMENT YEAR. WE, THEREFORE, OF THE VIEW THAT THE RENTAL INCOME FROM THE IMPUGNED PROPERTY CANNOT BE ASSESSED IN THE HANDS OF THE ASSESSEE BEING INDIVIDUAL BUT THE SAME SHOULD BE ASSESSED IN THE HANDS OF THE HUF SO THERE WOULD NOT BE ANY ESCAPEMENT OF INCOME. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(A) IN THESE APPEALS AND DELETE THE ADDITION MADE IN THIS REGARD. HOWEVER, WE DIRECT THE AO TO ASSESS THE RENTAL INCOME FROM THE IMPUGNED PROPERTY IN THE H ANDS OF THE HUF , SO THAT THE INCOME W OULD BE ASSESSED IN RIGHT HANDS IN VIEW OF THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF ITO VS. CH. ATCHAIAH, REPORTED IN (1996) 218 ITR 239 (SC) . 4 . IN THE RESULT, ALL THE AP PEAL S OF THE ASSESSEE ARE ALLOWED F OR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 / 05 / 201 5 . SD/ - SD/ - ( . . ) ( B. P. JAIN ) ( ) ( SUNIL KUMAR YADAV) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 18 /0 5 / 201 5 . . /PKM , . / PS ITA NOS.502 - 506/11 5 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, CUTTACK 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT , CUTTACK 6. [ / GUA RD FILE. //TRUE COPY//