ITO, Rewari V. M/s. Rohtash Santra Bhateri, Rewari

ITA 5916/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2739 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2007-2008
• Appeal Filed On: 03-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset
• Section: 148

Judgement Text

1 ITA NO. 5916/DEL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTAN T MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A .NO. 5916/DEL/2014 (ASSESSM ENT YEAR-2007-08) ITO WARD-2 REWARI (APPELLANT) VS ROHTASH SANTRA BHATERI D/O. SH. TARA S/O. SH. HARSAHAI HUF, VILL. GARHI ALAWALPUR, DHARUHERA REWARI (RESPONDENT) APPELLANT BY SH. KAPIL GOEL, ADV RESPONDENT BY SH. ATIQ AHMAD, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER DATED 28/08/2014 PASSED BY CIT(A)- ROHTAK FOR ASSESSMENT YEAR 2007-08. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION AMOUNTING TO RS. 82, 68,750/- MADE BY AO ON ACCOUNT OF LONG TERM CAPITAL GAIN BY OBSERVING T HAT CAPITAL GAIN BE ASSESSED IN THE HANDS OF FOUR INDIVIDUALS AS AGAINS T ASSESSED BY THE AO IN THE STATUS OF HUF. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS DATE OF HEARING 27.12.2017 DATE OF PRONOUNCEMENT 29.12.2017 2 ITA NO. 5916/DEL/2014 ERRED IN NOT APPRECIATING THAT DURING ASSESSMENT PR OCEEDINGS, THE ASSESSEE DID NOT AGITATE THAT THE CAPITAL GAIN ARIS E IN HANDS OF INDIVIDUALS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN ACCEPTING THE ARGUMENT OF THE ASSESSEE THA T ISSUE OF NON- TAXABILITY OF THE CAPITAL GAINS IN HANDS OF THE HUF WAS RAISED BEFORE THE AO VIDE LETTER DATED 10.05.2012(COPY AT APPENDIX -1 ). THE CONTENTS OF THE LETTER DO NOT AGITATE TAXABILITY IN HANDS OF HU F. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN NOT APPRECIATING THAT DURING THE ASSESSMEN T PROCEEDINGS, THE ASSESSEE ITSELF FURNISHED CALCULATION OF CAPITAL GA IN IN THE HANDS OF THE ASSESSEE VIDE LETTER DATED 15.03.2013.( COPY AT APP ENDIX -2). 5. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, M ODIFY, DELETE AND OR CHANGE ANY OF THE ABOVE GROUNDS ON OR BEFORE THE DA TE OF HEARING. 3. ON THE BASIS OF AIR INFORMATION AVAILABLE WITH THE OFFICE, THE ASSESSEE HAD SOLD AGRICULTURE LAND OF RS. 82,68,750/- ON 28. 04.2006. THE LAND SOLD IN QUESTION WAS FALLING WITHIN 5 KM DISTANCE FROM THE LIMITS OF NOTIFIED AREA DHARUHERA, THEREFORE, THE A.O OBSERVED THAT THE LA ND SOLD BY THE ASSESSEE WAS COVERED IN THE DEFINITION OF CAPITAL ASSETS IN VIEW OF THE NOTIFICATION ISSUED BY THE CBDT ON 06.01.1994 F.NO. 164/03/87/ ITAI DATED 06.01.94. NOTICE U/S 148 OF THE I.T. ACT, 1961 WAS ISSUED ON 21.03.2012 AFTER RECORDING THE REASONS. ON 19.02.2013, THE ASSESSEE FILED ITS RETURN OF INC OME DECLARING TOTAL INCOME AT RS. NIL. NOTICES U/S 143(2)/L42( 1) WERE ISSUED ON 11.03.2013 AND THE REASONS RECORDED WERE DULY SUPPLIED TO THE ASSESSEE. IN COM PLIANCE OF NOTICES, NONE ATTENDED THE ASSESSMENT PROCEEDINGS AND ONLY A WRIT TEN REPLY DATED 15.03.2013 WAS FILED WHICH WAS PERUSED AND PLACED O N RECORD BY THE ASSESSING 3 ITA NO. 5916/DEL/2014 OFFICER . THE ASSESSING OFFICER MADE ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN TO THE EXTENT OF RS.82,68,750/- BY HOLDING THA T ASSESSEE DID NOT FURNISHED ANY DOCUMENTARY' EVIDENCE SHOWING AS TO H OW THE VALUE OF LAND WAS TAKEN AT RS. 15,94,500/- AS ON 01.04.1981. THE AS SESSING OFFICER HELD THAT THE FAIR VALUATION OF LAND AS ON 01.04.1981 DEVOIDS ANY MERITS AND DID NOT ACCEPT ASSESSEES CONTENTIONS. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE A SSESSEE FILED APPEAL BEFORE CIT(A). THE CIT(A) ALLOWED THE APPEAL OF THE ASSES SEE. 5. THE REVENUE HAS FILED PRESENT APPEAL. THE LD. D R SUBMITTED THAT THE CIT(A) ERRED IN DELETING ADDITION AMOUNTING TO RS.82,68,75 0/- MADE BY THE A.O ON ACCOUNT OF LONG TERM CAPITAL GAIN BY OBSERVING THAT CAPITAL GAIN BE ASSESSED IN THE HANDS OF FOUR INDIVIDUALS AS AGAINST ASSESSE D BY THE A.O IN THE STATUS OF HUF. THE LD. DR SUBMITTED THAT DURING ASSESSMENT P ROCEEDINGS, THE ASSESSEE DID NOT AGITATE THAT THE CAPITAL GAIN ARISE IN HAN DS OF INDIVIDUAL. 6. THE LD. AR SUBMITTED THAT ROHTASH, SANTRA, BHATE RI & ROSHNI ARE FOUR INDIVIDUAL AND THE ASSESSING OFFICER WRONGLY HELD T HAT THESE ARE HUF WHICH IS LEGALLY NOT SUSTAINABLE. THE LD. AR RELIED ON THE ORDER OF CIT (A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RECORD. THE CIT(A) HELD AS UNDER:- 2.3. FIRSTLY ON BASIS OF JUDICIAL PRECEDENTS BELOW , IT IS HUMBLY ACCENTUATED THAT THERE IS NO PERSON ASSESSABLE IN E YES OF LAW AS DEEMED BY A.O IN STATUS ROHTASH SANTRA BHATERI D/O SH. TARA S/O HARSHAI HUF SO AS TO PASS A VALID ORDER IN EYES OF LAW. THAT IS, FOR ASSESSING GAINS ARISING FROM SALE OF L AND BELONGING TO FOUR INDIVIDUALS, A.O MADE CONSOLIDATED ASSESSMENT IN HA NDS OF HUF WHICH IS 4 ITA NO. 5916/DEL/2014 IMPERMISSIBLE AND BEYOND THE LAW THE SUBMISSIONS MADE BEFORE ME AND THE FACTS ON REC ORD PROVE THAT THE ASSESSMENT HAS BEEN MADE IN RESPECT OF AN HUF T HAT DID NOT EXIST. THE APPELLANT HAD ALREADY APPRAISED THE AO OF THIS FACT VIDE A LETTER DATED 10.05.2012. A SALE DEED EXECUTED FOR A PIECE OF LAN D BELONGING TO FOUR PERSONS DOES NOT CONSTITUTE EACH INDIVIDUAL OWNER A S BEING A CLOSED BODY OR HUF. THERE IS NO PROOF OF POOLING OF JOINT RESOU RCES TO JUSTIFY SUCH A CLUBBING OF INCOME. WHAT IS REQUIRED IS THAT THE IN COME SO EARNED BY EACH INDIVIDUAL SHOULD BE EXAMINED IN RESPECT OF CAPITAL GAIN ACCRUING, IF ANY, IN THEIR INDIVIDUAL CAPACITY. THE AO IS AT LIBERTY TO TAKE ACTION AS PER LAW IN EACH INDIVIDUAL CASE VIZ. MR. ROHTASH, MS SANTRA , MS BHATERI AND MS ROSHNI. THE ADDITION IN THE CAPACITY OF HUF IS DELETED. THESE ARE THREE DIFFERENT INDIVIDUALS AND NEVER WAS HUF. THE ASSESSING OFFICER WRONGLY PRESUMED THAT IT IS HUF. THUS, THE CIT (A) RIGHTLY ALLOWED APPEAL OF THE ASSESSEE AND THERE IS NO NEED TO INTE RFERE WITH THE FINDINGS OF THE CIT (A). 8. IN RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH DECEMBER 2017 . SD/- SD/- (R.K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED: 29/12/2017 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5 ITA NO. 5916/DEL/2014 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 27/12/2017 PS 2. DRAFT PLACED BEFORE AUTHOR 28/12/2017 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2017 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 29.12.2017 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 29.12.2017 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 6 ITA NO. 5916/DEL/2014