T.Samiappan, Thanjavur V. ITO, Thanjavur

ITA 606/CHNY/2008

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68687 (ITAT-CHENNAI)
• Duration Of Justice: 5 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 12-08-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 26-03-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGIRI
• Assessee Lawyers: V D GOPAL
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI [BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER] I.T.A. NOS. 604, 605 & 606/MDS/2008 ASSESSMENT YEARS : 2000-01, 2001-02 & 2002-03 SHRI T. SAMIAPPAN, 947, EAST GATE, THANJAVUR. [PAN: ANDPS 3666 G] VS INCOME TAX OFFICER, WARD 1(1), THANJAVUR. (APPELLANT) (RE SPONDENT) APPELLANT BY : SHRI V.D. GOPAL, ADVOCATE RESPONDENT BY : SHRI T.N. BETGIRI, JCIT DATE OF HEARING : 12-08-2013 DATE OF PRONOUNCEMENT : 26-08-2013 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE THREE APPEALS RELEVANT TO THE ASSESSMENT YEARS (AYS) 2000-01, 2001-02 & 2002-03 HAVE BEEN FILED BY THE A SSESSEE AGAINST THE COMMON ORDER OF THE COMMISSIONER OF INC OME TAX (APPEALS) -TIRUCHIRAPALLI, DATED 07-01-2008 FOR THE AFOREMENTIONED THREE AYS. I.T.A. NOS. 604, 605 & 606/MDS/2008 2 2. THE BRIEF FACTS OF THE CASE ARE THAT A SURVEY U/ S. 133A OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) WAS CARRIED OUT IN THE PREMISES OF THE ASSESSEE ON 05-0 2-2002. DURING THE COURSE OF SURVEY, AN AGREEMENT BETWEEN THE ASSE SSEE AND M/S. P.K. CONSTRUCTIONS, WITH RESPECT TO CONSTRUCTI ON OF A SHOPPING COMPLEX AT 947, EAST GATE, TANJORE WAS FOUND. THE ASSESSEE WAS QUESTIONED REGARDING SOURCE OF INVESTMENT IN TH E CONSTRUCTION OF SHOPPING COMPLEX. THE ASSESSEE ALLEGED TO HAVE ADMITTED THAT THE BUILDING WAS CONSTRUCTED BY HIM. SUBSEQUENTLY, THE ASSESSEE RETRACTED FROM HIS STAND AND SUBMITTED THAT THE SHO PPING COMPLEX WAS CONSTRUCTED ON BEHALF OF S.R. THANGAVEL PILLAI (HUF) AND HE WAS ONLY A COPARCENER IN THE HUF. TO DETERMINE THE COST OF CONSTRUCTION OF THE SHOPPING COMPLEX, THE MATTER WA S REFERRED TO THE VALUATION OFFICER. THE DEPARTMENTAL VALUATION OFFICER DETERMINED THE COST OF CONSTRUCTION AS ` 58,10,000/-. THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT H ELD THAT THE INVESTMENT IN THE CONSTRUCTION OF THE PROPERTY WAS MADE BY THE ASSESSEE AND THE ASSESSEE IS DE-FACTO OWNER OF THE BUILDING-IN- QUESTION. THE ASSESSING OFFICER MADE ADDITIONS IN THE INCOME RETURNED BY THE ASSESSEE ON SUBSTANTIVE BASIS. THE ASSESSING OFFICER VIDE ASSESSMENT ORDERS FOR THE AYS. 2000-01 , 2001-02 & 2002-03 DATED 31-03-2005 PASSED U/S. 143(3) R.W.S. 147 OF THE ACT I.T.A. NOS. 604, 605 & 606/MDS/2008 3 MADE ADDITIONS ON ACCOUNT OF UN-EXPLAINED INVESTMEN T IN THE CONSTRUCTION OF THE COMMERCIAL PROPERTY. THE ASSES SING OFFICER ALSO MADE ADDITION IN THE HANDS OF S.R. THANGAVEL P ILLAI (HUF) ON PROTECTIVE BASIS TOWARDS UN-DISCLOSED INVESTMENT IN THE PROPERTY. AGGRIEVED AGAINST THE ASSESSMENT ORDERS, THE ASSESS EE PREFERRED APPEALS BEFORE THE CIT(APPEALS). THE CIT (APPEALS) VIDE COMMON IMPUGNED ORDER, DISMISSED THE APPEALS OF THE ASSESSEE. THE ASSESSEE AGGRIEVED AGAINST THE ORDER OF THE CIT (APPEALS), HAS NOW COME IN SECOND APPEAL BEFORE THE TRIBUNAL. 3. SHRI V.D. GOPAL, ADVOCATE, APPEARING ON BEHALF O F THE ASSESSEE SUBMITTED THAT THE PROPERTY-IN-QUESTION I. E.,A COMMERCIAL COMPLEX SITUATED AT 947, EAST GATE, TANJORE IS A JO INT PROPERTY IN THE HANDS OF HUF. THE KARTA OF THE HUF HAD EXECUTE D A POWER OF ATTORNEY IN FAVOUR OF THE ASSESSEE FOR CONSTRUCTION OF THE BUILDING. THE ASSESSING OFFICER HAS ASSESSED THE BUILDING IN THE HANDS OF THE ASSESSEE AS HIS PERSONAL PROPERTY ONLY ON THE B ASIS OF A CASUAL STATEMENT MADE BY THE ASSESSEE DURING THE CO URSE OF SURVEY. THE LD. COUNSEL FURTHER SUBMITTED THAT S.R . THANGAVEL PILLAI (HUF) IS THE ACTUAL OWNER OF THE PROPERTY AN D WILL BE ABLE TO EXPLAIN THE SOURCE OF INVESTMENT FOR THE CONSTRUCTI ON OF THE COMMERCIAL BUILDING-IN-QUESTION. THE PROPERTY WAS ACQUIRED BY I.T.A. NOS. 604, 605 & 606/MDS/2008 4 S.R. THANGAVEL PILLAI (HUF) VIDE REGISTERED DEED OF PARTITION WAY BACK IN THE YEAR 1960. THE ASSESSING OFFICER HAS MA DE SUBSTANTIVE ASSESSMENT IN THE HANDS OF THE ASSESSEE TREATING THE ASSESSEE AS THE OWNER OF THE COMMERCIAL COMPLEX AND PROTECTIVE ASSESSMENT IN THE HANDS OF THE HUF. S.R. THANGAVEL PILLAI (HUF) HAS FILED RETURN OF INCOME FOR THE AYS. 2000-01 & 2 001-02 ON 20-02-2002 AND THE ASSESSEE HAS FILED HIS RETURN OF INCOME IN HIS INDIVIDUAL CAPACITY FOR THE AYS. 2000-01, 2001-02 & 2002-03 IN RESPONSE TO THE NOTICE U/S. 148 ON 12-01-2004. 4. ON THE OTHER HAND, SHRI T.N. BETGIRI, APPEARING ON BEHALF OF THE REVENUE SUBMITTED THAT AT THE TIME OF SURVEY, T HE ASSESSEE IN HIS STATEMENT HAD CATEGORICALLY STATED THAT THE BUI LDING WAS CONSTRUCTED BY HIM. SUBSEQUENTLY, HE RETRACTED FRO M HIS STATEMENT AND CHANGED HIS STANDS BY STATING THAT TH E BUILDING WAS CONSTRUCTED OUT OF THE FUNDS OF S.R. THANGAVEL PILL AI (HUF). IN THE ASSESSMENT ORDERS, THE ASSESSEE IS HELD TO BE DE-FA CTO OWNER OF THE PROPERTY AND HENCE ADDITION HAS BEEN MADE ON SU BSTANTIVE BASIS. ASSESSMENT IN THE CASE OF HUF HAS NOT ATTAI NED FINALITY AS THE APPEALS FILED BY THE HUF ARE STILL PENDING. TH E ASSESSEE HAS BEEN TREATED AS OWNER OF THE BUILDING ON THE BASIS OF STATEMENT I.T.A. NOS. 604, 605 & 606/MDS/2008 5 MADE BY HIM DURING SURVEY PROCEEDINGS. THE LD. DR STRONGLY SUPPORTED THE ORDER OF THE CIT(APPEALS). 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE CASE OF THE ASSESSEE IS THAT A BUILDING SITUATED AT 947, EAST GATE, TANJORE IS OWNED BY S.R . THANGAVEL PILLAI (HUF). THE SAID PROPERTY WAS ACQUIRED BY TH E HUF WAY BACK IN THE YEAR 1960. THE KARTA OF HUF SHRI S.R. THANGAVEL PILLAI EXECUTED POWER OF ATTORNEY IN FAVOUR OF THE ASSESSEE FOR THE CONSTRUCTION OF A SHOPPING COMPLEX AT 947, EAST GA TE, TANJORE. THE SURVEY WAS CONDUCTED AT THE BUSINESS PREMISES O F THE ASSESSEE ON 05-02-2002 WHEREIN STATEMENT OF THE ASS ESSEE WAS RECORDED U/S. 133A WHEREIN THE ASSESSEE HAS STATED THAT THE BUILDING HAS BEEN CONSTRUCTED BY HIM. ON THE BASIS OF THE STATEMENT MADE BY THE ASSESSEE, ADDITION WAS MADE I N THE INCOME RETURNED BY THE ASSESSEE FOR THE AYS. 2000-0 1, 2001-02 & 2002-03 AS UN-EXPLAINED INVESTMENTS IN CONSTRUCTION . THE ASSESSEE RETRACTED FROM THE STATEMENT MADE U/S. 133 A AND STATED THAT THE PROPERTY AT 947, EAST GATE, TANJORE BELONG S TO S.R. THANGAVEL PILLAI (HUF). THE ASSESSING OFFICER MADE SUBSTANTIVE ASSESSMENT WITH RESPECT TO INVESTMENT IN THE CONSTR UCTION OF THE I.T.A. NOS. 604, 605 & 606/MDS/2008 6 PROPERTY IN THE HANDS OF THE ASSESSEE AND PROTECTIV E ASSESSMENT IN THE HANDS OF THE HUF. 6. IT IS A WELL SETTLED LAW THAT THE STATEMENT RECO RDED DURING SURVEY U/S. 133A IS NOT CONCLUSIVE PIECE OF EVIDENC E. THIS POSITION IS WELL ESTABLISHED BY THE BOARD CIRCULAR DATED 10- 03-2003 AND THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT IN THE CA SE OF CIT VS. S. KHADAR KHAN SON REPORTED AS 300 ITR 157 (MDS) . THE LD. COUNSEL FOR THE ASSESSEE HAS CATEGORICALLY STATED T HAT THE PROPERTY-IN-QUESTION BELONGS TO S.R. THANGAVEL PILL AI (HUF) AND A PROPERTY WAS ACQUIRED BY HUF IN THE YEAR 1960 VIDE PARTITION DEED BETWEEN S.R. THANGAVEL PILLAI AND HIS BROTHER S VIDE REGISTERED DOCUMENT. THE REVENUE HAS NOT BEEN ABLE TO CONTROVERT THIS CONTENTION OF THE LD. COUNSEL. THE LD. DR HAS ONLY PLACED RELIANCE ON THE STATEMENT OF THE ASSESSEE RE CORDED U/S. 133A OF THE ACT FOR MAKING THE ADDITION. THE ASSES SING OFFICER IN HIS ASSESSMENT ORDER HAS STATED THAT THE ASSESSEE I S HELD TO BE THE DE-FACTO OWNER OF THE PROPERTY. WE ARE OF THE CONSIDERED OPINION THAT WHERE THE PROPERTY IS OWNED BY HUF, TH ERE IS NO CONCEPT OF DE-FACTO OWNERSHIP BY COPARCENER, THE HUF IS DE JURE OWNER OF THE PROPERTY TILL THE TIME IT IS PARTITION ED AMONGST THE COPARCENERS. THERE IS NOTHING ON RECORD TO SHOW TH AT THE PROPERTY I.T.A. NOS. 604, 605 & 606/MDS/2008 7 HAS BEEN PARTITIONED. SINCE, THE PROPERTY IS OWNED BY HUF, SUBSTANTIVE ASSESSMENT HAS TO BE MADE IN THE HANDS OF HUF. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE , WE DEEM IT APPROPRIATE TO DELETE THE ADDITION MADE IN THE H ANDS OF ASSESSEE WITH RESPECT TO UN-EXPLAINED INVESTMENT IN THE CONS TRUCTION OF PROPERTY BELONGING TO HUF. SUBSTANTIVE ADDITION IS TO BE MADE IN THE HANDS OF HUF. THE APPEALS OF THE ASSESSEE ARE ALLOWED AND THE IMPUGNED ORDER OF THE CIT(APPEALS) RELEVANT TO THE AYS. 2000-01, 2001-02 & 2002-03 ARE SET ASIDE. ORDER PRONOUNCED ON MONDAY, THE 26 TH AUGUST, 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIK AS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 26 TH AUGUST, 2013 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR