Shri Gurappa P Gawali , Bijapur V. Income Tax Officer Ward-1, Bijapur

ITA 647/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9446 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2002-2003
• Appeal Filed On: 02-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ASHOK A KULKARNI SHRI G
• Keywords: Capital asset; Onus to prove; Revised return; TDS; Set aside; Capital Gains
• Section: 54B; 139(1); 64; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH ES : C , BANGALORE BEFORE SHRI B.R.BASK A RAN, ACCOUNTANT MEMBER (SMC) ITA NO . 64 7 (BANG)/ 20 1 9 ( ASSESSMENT YEAR : 20 02 - 03 ) SHRI LA T E GURAPPA P GAWALI REP. BY LEGAL HEIR G U RAPPA PARA SA PPA GAWALI, S HAH APUR GATE, GAWALI GA L LI, BIJAPUR - 586 101. PAN NO. A A DHG8984N APPELLANT VS THE INCOME TAX OFFICER , WARD - 1, BIJAPUR - 586101 RESPONDENT APPELLANT BY : SH RI ASHOK A KULKARNI, A DVOCATE RESPONDENT BY : SHRI GANESH R GHALE, ADVOCATE , S TANDING COUNSEL TO DEPTT. DA TE OF HEARING : 0 6 - 11 - 2019 DATE OF PRONOUNCEMENT : O R D E R PER SHRI B.R.BASKARAN,AM THE ASSESS E E HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 02 - 08 - 2018 P ASSED B Y LD.CIT(A), BELAGAVI AND IT RELATES TO ASSESSMENT YEAR 2002 - 03. ITA NO.6 47/BANG/2019 2 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD.CIT(A) IN CONFIRMING THE ASSESSMENT OF CAPITAL GAIN S IN THE HANDS OF ASSESSEE HUF, WHILE THE CLAIM OF THE ASSESSEE IS THAT THE CAPI T AL GAIN S HAS ARIS EN IN THE INDIVIDUAL CAPACITY O F THE ASSESSEE. 3. THIS IS THE SECOND ROUND OF PROCEEDING . THE ASSESSEE HEREIN, I.E., GURUPPA P GAWALI (HUF) HA D FILED I T S RETURN OF INCOME DECLARING CAPITAL LOSS OF R S .2 7.30 LAKHS FOR THE ASSESSMENT YEAR 2002 - 03 . THE CAPITAL LOSS HAS ARISEN ON SALE OF AGRICULTURAL LAND. IT IS ALSO PERTINENT TO NOTE THAT THE ASSESSEE HAS FILED THE RETURN OF INCO ME IN PURSUANCE OF NOTICE ISSUED U/S 148 OF THE IT ACT, 1961. THE AGRICULTURAL LAND SOLD BY THE ASSESSEE WAS LOCATED WITHIN THE MUNICIPAL LIMITS AND THE SAME WAS SOLD TO A PERSON NAMED SRI RAJESH RUNWAL, FOR A CONSIDERATION OF RS.13.05 LAKHS. HOWEVER, SHRI RAJESH RUNWAL HAD AGREED BEFORE THE ADIT(INV.), BELGAUM THAT THE SALE CONSIDERATION WAS 34.60 LAKHS, THOUGH THE CONVEYANCE DEED WAS EXECUTED FOR RS.13.05 LAKHS. ACCORDINGLY, IN THE RETURN OF INCOME FILED BY THE ASSESSEE IN PURSUANCE OF NOTICE ISSUED U/S 148 OF THE IT ACT, THE ASSESSEE ALSO DECLARED SALE CONSIDERATION AT RS.34.60 LAKHS AND ACCORDINGLY COMPUTED CAPITAL LOSS. SUBSEQUENTLY, THE AS S ESSEE - HUF FILED REVISED RETURN OF INCOME DECLARING CAPITAL GAIN AS NIL , AFTER CLAIMING DEDUCTION U/S 54B OF THE IT ACT, 1961. THE DEDUCTION U/S 54B OF THE ACT IS ALLOWED AGAINST THE CAPITAL GAINS ARISING ON SALE OF AGRICULTURAL LAND, WHICH FALLS IN THE CATEGORY OF CAPITAL ASSET, IF THE CAPITAL GAINS IS INVESTED IN PURCHASING ANOTHER AGRICULTURAL LAND. ITA NO.6 47/BANG/2019 3 4 . THE AO TOOK THE VIEW THAT THE ASSESSEE - HUF IS NOT ENTITLED TO CLAIM DEDUCTION U/S 54B OF THE ACT , SINCE THE SAID DEDUCTION WAS AVAILABLE DURING THE ASSESSMENT Y E AR UNDER CONSIDERATION ONLY TO INDIVIDUAL ASSESSEES AND NOT TO HUF. HE FURTHER NO T IC E D THAT THE A SSESSEE HAD ADOPTED COST OF ASSET AS ON 01 - 04 - 1981 AT RS.1.00 LAKH PER ACRE , WHICH WAS ON HIGHER SIDE , WHEN THE COMPARABLE CASES WERE TAKEN INTO ACCOUNT . THE AO ALSO NOTICED THAT THE A S SESSEE HAS NOT DEPOSITED CAPITAL GAINS AMOUNT WHICH WAS NOT UTILIZED BEFORE THE DUE DATE PRESCRIBED U/S 139(1) OF THE IT ACT, IN CAPITAL GAIN S ACCOUNT SCHEME , EVEN IF THE DEDUCTION U/S 54B OF THE ACT IS CONSIDERED AS ALLOWABLE . ACCORDINGLY, THE AO REJECTED THE CLAIM FOR DEDUCTION U/S 54B OF THE IT ACT , 1961. WHILE COMPUTIN G CAPITAL GAINS, THE AO ADOPTED T HE COST OF AGRICULTURAL LAND AS ON 01 - 04 - 1981 AT RS.10,000/ - PER ACRE , WHICH WAS ALSO ACCEPTED BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE. ACCORDINGLY, THE AO COMPUTED THE CAPITAL GAINS ON SALE OF AGRICULTURE LAND AT RS.31.91 LAKHS AND ASSESSED THE SAME . THE ASSESSEE COULD NOT SUCCEED IN THE APPEAL FILED BEFORE THE LD.CIT(A) . H E NCE, IT PREFERRED APPEAL BEFORE THE TRIBUNAL IN THE FIRST ROUND OF PROCEEDINGS . 5. THE ASSESSEE CONTENDED BEFORE THE ITAT THAT THE AGRIC ULTURE LAND ACTUALLY BELONGED TO HIM IN HIS INDIVIDUAL CAPACITY AND HENCE, T HE AO WAS NOT JUSTIFIED IN ASSESSING THE CAPITAL GAINS IN THE HANDS OF HUF. THE ASSESSEE ALS O FURNISHED COPIES OF DOCUMENTS PERTAINING TO PURCHASE OF LANDS. IN VIEW OF THE NEW ITA NO.6 47/BANG/2019 4 CLAI M PUT FORTH , THE TRIBUNAL RESTORED THE ISSUE OF DETERMINATION OF STATUS T O T HE FILE OF THE AO , VIDE ITS ORDER DATED 18 - 10 - 2007 PASSED IN IT N O .360(B)/2006 . 6 . IN THE SET ASIDE PROCEEDINGS, THE AO TOOK THE VIEW THAT THE LAND BELONGED TO HUF ONLY AND ACCORDINGLY, TOOK THE VIEW THAT THE CAPITAL GAINS WAS RIGHTLY ASSESSED IN THE HANDS OF THE HUF. 7. AGGRIEVED BY THE ORDER PASSED BY THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO CONFIRMED THE ORDER OF THE AO WITH THE FOLLOWING OBSER VATIONS IN THE SECOND ROUND OF PROCEEDINGS: - 7. I HAVE CAREFULLY CONSIDERED THE FACTS O F THE CASE, THE SUBMISSION S MADE BY APPELLANT AND THE ASSESSMENT ORDER PASSED BY THE AO. 8. THE MAIN ISSUE RAISED IN APPEAL IS REGARDING STATUS OF ASSESSEE. ASSESSEE DID NOT FILE THE RETURN OF INCOME VOLUNTARILY WIT H RESPECT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. HE FILED RETURN OF INCOME IN RESPONSE TO THE NOTICE U/S 148 A N D HE FILED THE RETURN OF INCOME IN THE S TATU S OF HUF ONLY. WHILE FILIN G RETURN OF INCOME HE SUBMITTED DETAILS OF FAMILY TREE HUF ON HIS OWN. NO FURTHER NEW EVIDENCE WAS FILED BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS BEFORE THE APPELLATE AUTHORITY OR BEFORE THE AO WHILE PASSING ITA NO.6 47/BANG/2019 5 REASSESSMENT ORDER GIVING EFFECT TO THE ITAT ORDER DATED 18 - 10 - 20107. 9. THE AO AFTER VERIFICATION OF RECORDS AVAILABLE BEFORE HIM, HAD COME TO THE CONCLUSION ON FACT THAT ASSESSEES STATUS IS HUF AS ALREADY FILED BY THE ASSESSEE ON WHICH PROPER ASSESSMENT WAS MADE. HENCE, STATUS OF ASSES SEE IS DECIDED TO BE HUF ONLY. 9.1 AR DID NOT PRODUCE ANY EVIDENCE EITHER DURING THE ASSESSMENT OR DURING THE REMAND PROCEEDINGS OR DURING THE APPELLANT PROCEEDINGS IN SUPPORT OF CHANGE OF HIS STATUS. HE VOLUNTARILY FILED RETURN OF INCOME IN RESPONSE TO NOTICE U/ 148 IN THE STATUS OF HUF ONLY GIVING FAMILY TREE ETC., THE ISSUE WAS NOT RAISED BEFORE THE AO OR BEFORE CIT(A) EITHER. EVEN FOR THE FIRST TIME HE RAISED THE ISSUE BEFORE ITAT, HE DID NOT PRODUCE ANY EVIDENCE BEFORE AO DURING RE - ASSESSMENT PR OCEEDINGS IN OBEDIENCE TO ITAT ORDER. HE DID NOT FURNISH ANY NEW EVIDENCE IN SUPPORT OF HIS INDIVIDUAL STATUS. WHEN ASSESSEE CLAIMS HIS STATUS IS DIFFERENT FROM WHAT HE HIMSELF HAD VOLUNTARILY FILED BEFORE DEPARTMENT, THE ONUS WILL BE ON HIM TO ESTABL ISH THE FACTS WITH EVIDENCE. IN THE ABSENCE OF EVIDENCE AO CANNOT GIVE DIFFERENT FINDING THAN WHAT WAS AVAILABLE ON RECORD. ASESSEE DID NOT DISCHARGE HIS ONUS, HENCE HIS CLAIM OF CHANGE OF STATUS WAS NOT ACCEPTED BY AO. ITA NO.6 47/BANG/2019 6 9.2 NO NEW EVIDENCE TO ESTABLISH THE STATUS OF ASSESSEE AS INDIVIDUAL WAS BROUGHT OUT BY THE ASSESSEE EITHER DURING THE REMAND PROCEEDINGS OR DURING THE APPELLATE PROCEEDINGS. 9. 3 THE AO IN HIS REMAND REPORT DATED 27/07 - 2015, HAS CLEARLY STATED THAT NO NEW EVIDENCE WAS PRODUCED BY THE AR OTHER THAN THOSE SUBMITTED EARLIER BEFORE THE AO WHILE PASSING THE REASSESSMENT ORDER. 9.4 AS THE APPELLANT COULD NOT ESTABLISH THAT ITS S TATUS IS INDIVIDUAL AND NOT HUF, I AM CONSTRAINED TO ACCEPT THE ARGUMENT BY APP ELLANT IN A GIVEN SET OF FACTS, I AM OF THE OPINION THAT AO HAD ACTED IN ACCORDANCE WITH LAW & GIVEN A FINDING ON FACTS. HENCE, NO INTERVENTION IS WARRANTED BY THE UNDERSIGNED. HENCE, APPEAL ON HIS GROUND IS DISMISSED . 8 . AGGRIEVED BY THE ORDER SO P A SSED BY THE LD.CIT(A), T HE A S SESSEE HAS FIL E D THIS APPEAL B E FORE THE TRIBUNAL. 9 . THE LD.AR OF TH E ASSE S SEE CONTEND E D THAT THE LANDS WERE ORIGINALLY PURCH A S E D BY ASSESSEE AND HIS B R OTHER IN THEIR INDIVIDUAL CAPACITY AND HENCE, THE CAPITAL GAIN S ARISING ON ITS SALE IS ASSESSABLE IN THE S TATUS OF THE INDIVIDUAL AND NOT IN THE STATUS OF HUF. HE SUBMITTED THAT THE ASSESSEE HAS INADVERTENTLY OFFERED THE CAPITAL GAINS IN THE HUF STATUS AND THE ASSESSEE SHOULD NOT BE PUT INTO TROUBLE ON MISTAKE OF LA W. WITH REGARD TO COMPUTATION OF ITA NO.6 47/BANG/2019 7 CAPITAL GAINS , THE LD.AR SUBMITTED THAT THE AO HAS REJECTED THE CLAIM FOR DEDUCTION U/S 54B OF THE I T ACT, INTER - ALIA FOR THE REASON THAT THE ASSESSEE H AS NOT DEPOSITED UNUT I LI Z ED CAPITAL GAIN S AM O UNT IN THE CAPITAL GAIN S ACCOUNT SCHEME. T HE LD.AR SUBMITTED THAT THE HONBLE KARNATAKA HIGH COURT HAS TAKEN A VIEW IN THE C A SE OF CIT VS SHRI K RAMACHANDRA RAO (ITA N O .47 OF 2014 AND OTHERS DATED 14 - 07 - 2014 ) THAT THE DEPOSIT UNDE R C A PITAL GAINS SCHEME IS NOT WARRANTED IF THE CAPITAL GAINS IS USED FOR PURCHASE OF ASSET A S CONTEMPLATED IN SEC.54F OF THE IT ACT , 1961. THE LD.AR SUBMITTED THAT THE RATIO OF THE ABOVE SAID DECISION SHALL SQUARELY APPLY TO THE INSTANT CASE ALSO, AS THE ASSE SSEE , IN THE INSTANT CASE , HAS UTILIZED THE CAPITAL GAINS IN PURCHASE OF NEW AGRICULTURAL LAND AND HENCE, THERE IS NO REQUIREMENT OF MAKING DEPOSIT INTO CAPITAL GAINS ACCOUNT SCHEME. 10. THE LD. DR , ON THE CONTRARY, SUBMITTED THAT THE ASSESSEE ITSELF HAS DECLARED CAPITAL GAIN IN THE HANDS OF HUF AND HAS CLAIMED DEDUCTION U/S 54B OF THE ACT, 1961. IT WAS A CONSCIOUS DECISION OF THE ASSESSEE TO DECLARE THE CAPITAL GAINS IN THE STATUS OF HUF. HOWEVER, S INCE THE DEDUCTION U/S 54B OF TH E ACT WAS NOT AVA IL ABLE TO HUF , THE ASSESSEE HAS CHANGED ITS STAND AND CLAIMED THAT THE LAND BELONGED TO INDIVIDUAL CAPACITY. THE LD. DR FURTHER SUBMITTED THAT THE AO IS NOT EMPOWERED TO CHANGE THE STATUS OF THE ASSESSEE. FURTHER, THE AS S ES S EE HAS NOT SHOWN THAT HE HAS DECLA RED THE IMPUGNED CAPITAL GAIN S IN THE INDIVIDUAL STATUS. ITA NO.6 47/BANG/2019 8 1 1 . I HEARD THE RIVAL CONTENTION S AND PERUSED THE RECORD. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSEE , HEREIN IS ASSESSED IN HUF STATUS AND IT HAS DECLARED THE CAPITAL GAINS IN ITS RETURN OF INCOME. IT IS ALSO PERTINENT TO NOTE THAT THE ASSESSEE HAS FILED THE RETURN OF INCOME IN PURSUANCE OF NOTICE ISSUED U/S 148 OF THE IT ACT, 1961. WE NOTICED EARLIER THAT T HE ASSESSEE HAS SOLD AGRICULTURAL L AND LOCATED WITH IN THE MUNICIPAL LIMITS TO A PERSON NAMED SRI RAJESH RUNAWAL, FOR A CONSIDERATION OF RS. 1 3.05 LAK H S. HOWEVER, SINCE SHRI RAJESH RUNAWAL AGREED BEFORE THE ADIT(INV.) BELGAUM THAT THE SALE CONSIDERATION WAS 34.60 LAKHS , THE ASSESSEE ALSO DEC LARED THE SALE CONSIDERATION AT RS.34.60 LAKHS, AS NOTIC E D E A RLIER . WE NOTICED EARLIER THAT T HE ASSESSEE HAD ORIGINALLY DECLARED CAPITAL LO S S OF RS.27.30 LAKHS , DUE TO SOME COMPUTATIONAL ERROR . HOWEVER, IN THE REVISED RETURN OF INCOME , THE ASSESSEE - HUF HEREIN HAS DECLARED CAPITAL GAIN S AS NIL , AFTER CLAIMING DEDUCTION U/S 54B OF THE IT ACT . IT CAN BE NOTICED THAT THE ASSESSEE - HUF, IN TWO OCCASIONS, I.E., IN THE ORIGINAL RETURN AND IN REVISED RETURN OF INCOME, HAS CONSCIOUS DECLARED THE CAPITAL IN ITS HA NDS. ACCORDINGLY, THERE IS MERIT IN THE SUBMISSION OF LD D.R THAT THE ASSESS E E HAS TAKEN A CONSCIOUS DECISION TO FILE RETURN OF INCOME IN T HE STATUS OF HUF ONLY. 12. I ALSO NOTICE THAT THE ASSESSEE HAS NOT BROUGHT ANY NEW MATERIAL ON RECORD TO SHOW THAT THE LAND ACTUALLY BELONGED TO INDIVIDUAL STATUS. AS RIGHTLY POINTED OUT BY THE LD.CIT(A), THE ONUS TO PROVE THE ABOVE SAID CLAIM WOULD LIE O N T HE ASSESSEE AND THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS BY BRING ING COGENT MATERIAL IN SUPPORT HIS C LAIM. UNDER THE SE SET OF FACTS, I HAVE NO ITA NO.6 47/BANG/2019 9 OTHER OPTION BUT TO CONFIRM THE ORDER PASSED BY THE LD.CIT(A) ON THIS ISSUE. 1 3 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER P RONOUNCED ON ( B .R.BASKARAN ) ACCOUNTANT MEMBER DATED: * AM C OPY OF THE ORDER FORWARDED TO: 1.APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5. DR 6. ITO (TDS) 7 .GUARD FILE BY ORDER ASST. REGISTRAR