Smt. C Vijaya Reddy, Chandigarh V. ITO, Chandigarh

ITA 831/CHANDI/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9142 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 01-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTALDR
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 831/CHD/2016 ASSESSMENT YEAR: 2009-10 SMT. C.VIJAYA REDDY, VS THE ITO, HOUSE NO. 918, WARD 4(1), SECTOR 39, CHANDIGARH. CHANDIGARH. PAN: ADMPR5601D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.N.SINGLA RESPONDENT BY : SHRI S.K.MITTAL,DR DATE OF HEARING : 04.08.2016 DATE OF PRONOUNCEMENT : 30.08.2016 O R D E R THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-2, CHANDIGARH DATED 04.04.2016 FOR ASSESSMENT YEAR 2009-10 CHALLENGING THE ADDITION OF RS. 1,16,640/- ON ACCOUNT OF RENT OF PR OPERTY BELONGING TO DAUGHTER. 2. THE BRIEF FACTS OF THE ISSUE ARE THAT ASSESSEE I S HAVING A PROPERTY I.E. PLOT NO. 6, KAUTILYA SOMAJIG UDA, HYDERABAD WHICH HAS BEEN GIVEN ON RENT TO STATE BAN K OF INDIA. THE TOTAL RENT FOR THE YEAR HAVE BEEN REC EIVED AT RS. 2,33,280/- AND 50% OF THE RENT HAS BEEN OFFE RED FOR TAXATION BY THE ASSESSEE IN HER RETURN OF INCOM E. 2 THE BALANCE 50% RENT BEING IN THE HANDS OF DAUGHTER OF THE ASSESSEE, MS. C. SRUTHI REDDY, ASSESSING OFFICE R ASKED THE ASSESSEE TO ESTABLISH WITH DOCUMENTARY EVIDENCE THAT 50% OF THE SHARE IN THE SAID PROPERTY HAS BEEN TRANSFERRED TO THE DAUGHTER MS. C. SRUTHI REDD Y. THE ASSESSEE FAILED TO SUBMIT EVIDENCE. THE ASSESS ING OFFICER, THEREFORE, ASSESSED THE ENTIRE RENT IN THE HANDS OF THE ASSESSEE AND MADE ADDITION OF RS. 1,16,640/- BEING 50% AND SHOWN IN THE HANDS OF DAUGHTER OF THE ASSESSEE. 3. THE ADDITION WAS CHALLENGED BEFORE LD. CIT(APPEALS). THE ASSESSEE REQUESTED FOR ADMISSION OF ADDITIONAL EVIDENCE AND IT WAS SUBMITTED THAT AN AGREEMENT TO SELL DATED 13.07.1989 WAS EXECUTED BETWEEN ASSESSEE AND HER DAUGHTER FOR THE IMPUGNED PROPERTY AT HYDERABAD BUT THE SAME COULD NOT BE FIL ED DURING THE ASSESSMENT PROCEEDINGS AS THE SAID AGREEMENT WAS LYING AT NATIVE PLACE OF THE ASSESSEE AT HYDERABAD. THE ASSESSEE FILED COPY OF THE AGREEMEN T, ACKNOWLEDGEMENT OF THE RETURN OF MS. C. SRUTHI REDD Y FOR ASSESSMENT YEAR 2009-10 ETC. AND SUBMITTED THAT 50% OF THE RENT BELONGS TO CO-OWNER MS. C. SRUTHI REDDY. THE SUBMISSIONS OF THE ASSESSEE AND ADDITIO NAL EVIDENCE WERE SENT TO THE ASSESSING OFFICER FOR FIL ING THE REPORT. THE ASSESSING OFFICER IN HIS REPORT REITER ATED THAT ADDITION WAS MADE DUE TO NON AVAILABILITY OF T HE AGREEMENT TO SELL EXECUTED BETWEEN ASSESSEE AND H ER 3 DAUGHTER. THE ASSESSEE DID NOT FILE DOCUMENTARY EVIDENCE AT THE ASSESSMENT STAGE. THE ASSESSEE DUR ING THE APPELLATE PROCEEDINGS SUBMITTED ONLY AGREEMENT TO SELL AND NO REGISTRATION DEED IN SUPPORT OF THE AGREEMENT PURPORTED TO BE DATED 13.07.1989, THEREFO RE APPARENTLY THE SAME CANNOT BE RELIED UPON. THE PAYMENT OF CASH FOR SALE CONSIDERATION FURTHER INDI CATED THAT SAME SHOULD NOT BE RELIED UPON. THE ASSESSING OFFICER, THEREFORE, REQUESTED THAT ADDITIONAL EVIDE NCE MAY NOT BE ADMITTED. 4. THE LD. CIT(APPEALS), CONSIDERING EVIDENCE ON RECORD AND REMAND REPORT FILED BY THE ASSESSING OFF ICER NOTED THAT ASSESSEE FAILED TO FILE EVIDENCE TO PROV E OWNERSHIP OF MS. C. SRUTHI REDDY OF THE IMPUGNED PROPERTY. THE ASSESSEE DID NOT FILE EVIDENCE BEFOR E ASSESSING OFFICER DESPITE GIVING OPPORTUNITY THEREF ORE, NO EXCEPTIONAL CIRCUMSTANCES UNDER RULE 46A HAVE BE EN PROVED, THEREFORE, IT WAS HELD THAT ASSESSEE COULD NOT ESTABLISH THE OWNERSHIP OF MS. C. SRUTHI REDDY ON T HE SAID PROPERTY, THEREFORE, APPEAL OF THE ASSESSEE WA S DISMISSED. 5. I HAVE HEARD RIVAL SUBMISSIONS. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO PB-32 WHICH IS AGREEMENT T O SELL DATED 02.12.1987 IN RESPECT OF THE PROPERTY IN QUESTION BETWEEN ASSESSEE AND M/S AMRUTHA ESTATES REGISTERED PARTNERSHIP CONCERN THROUGH WHICH ASSESS EE 4 ACQUIRED THE PROPERTY IN QUESTION IN RESPECT OF WHI CH RENT WAS OFFERED FOR TAXATION. THE LD. COUNSEL FOR THE ASSESSEE ALSO REFERRED TO PB- 40 WHICH IS AGREEMENT TO SELL DATED 13.07.1989 BETWEEN ASSESSEE AND HER MINO R DAUGHTER THROUGH WHICH HALF SHARE IN THE IMPUGNED PROPERTY WAS TRANSFERRED BY ASSESSEE TO HER DAUGHTE R SUBJECT TO CONSIDERATION. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO PB-4 TO 17 WHICH ARE ACKNOWLEDGEMENT OF FILING OF RETURN ALONGWITH COMPUTATION OF INCOME OF ASSESSEE FROM ASSESSMENT YEARS 2004-05, 2005-06, 2006-07, 2007-08, 2008-09, 2010-11 AND 2011-12. THE ASSESSEE IN ASSESSMENT YE AR 2004-05, 2005-06 AND 2006-07 HAVE DECLARED THE ENTI RE RENT INCLUDING SHARE OF HER MINOR DAUGHTER, BEING T HE DAUGHTER MINOR AND WHEN DAUGHTER OF THE ASSESSEE BECOME MAJOR IN ASSESSMENT YEAR 2007-08, ASSESSEE OFFERED 50% OF THE RENT OF HER SHARE. SAME CONTINU ED IN SUBSEQUENT YEARS AS WELL. THE LD. COUNSEL FOR THE ASSESSEE ALSO REFERRED TO PB-24 TO 31 WHICH ARE ACKNOWLEDGEMENT OF FILING OF RETURN OF INCOME BY MS . C. SRUTHI REDDY, DAUGHTER OF THE ASSESSEE FOR ASSESSME NT YEARS 2007-08 TO 2010-11 IN WHICH DAUGHTER OF ASSES SEE HAS OFFERED 50% OF THE RENTAL INCOME IN HER RETURN OF INCOME FOR THE PURPOSE OF TAXATION. THE LD. COUNSE L FOR THE ASSESSEE SUBMITTED THAT SINCE AGREEMENT TO SELL IN FAVOUR OF THE ASSESSEE WAS AT HYDERABAD AT THE TIME OF ASSESSMENT PROCEEDINGS, THE SAME COULD NOT BE FILED BEFORE ASSESSING OFFICER. THE A.O. ASSESSED THE 5 RENTAL INCOME IN THE HANDS OF THE ASSESSEE ON THE B ASIS OF AGREEMENT TO SELL DATED 02.12.1987 THEREFORE, WH EN ASSESSEE TRANSFERRED HER HALF SHARE TO HER DAUGHTER THROUGH AGREEMENT TO SELL DATED 13.07.1989, THERE SHOULD NOT BE ANY DEVIATION FROM THE STAND TAKEN BY THE REVENUE. HE HAS, THEREFORE, SUBMITTED THAT ASSESSE E PRODUCED SUFFICIENT EVIDENCE ON RECORD TO PROVE OWNERSHIP OF DAUGHTER OF THE ASSESSEE THEREFORE, LD . CIT(APPEALS) SHOULD HAVE ADMITTED THE SAME AND DECI DED THE ISSUE ACCORDINGLY. HE HAS ALSO REFERRED TO VAR IOUS SERVICE RECORDS OF HUSBAND OF THE ASSESSEE WHO IS I N SERVICE OF THE PUNJAB GOVERNMENT IN WHICH WHILE FIL ING THE RETURN FOR IMMOVABLE PROPERTY TO THE PUNJAB GOVERNMENT, HUSBAND OF THE ASSESSEE HAS DECLARED TH E SHARE OF HIS MINOR DAUGHTER AND WIFE IN THE PROPERT Y RETURN TO THE GOVERNMENT OF PUNJAB. ON THE OTHER H AND, LD. DR RELIED UPON ORDERS OF AUTHORITIES BELOW. 5(I) AFTER CONSIDERING RIVAL SUBMISSIONS AND MATERI AL ON RECORD, I AM OF THE VIEW ADDITION IS WHOLLY UNJUSTI FIED. IT IS ADMITTED FACT THAT ASSESSEE BECOME OWNER OF T HE PROPERTY IN QUESTION THROUGH AGREEMENT TO SELL DATE D 02.12.1987 THROUGH WHICH ASSESSEE ACQUIRED THE PROPERTY FROM M/S AMRUTHA ESTATES. THE ASSESSEE TRANSFERRED HER HALF SHARE IN THE SAME PROPERTY TO HER DAUGHTER VIDE AGREEMENT TO SELL DATED 13.07.1989 IN WHICH IT WAS ALSO MENTIONED THAT PURCHASER I.E. DAUGHTER OF THE ASSESSEE SHALL ABIDE BY ALL THE TER MS 6 AND CONDITIONS OF M/S AMRUTHA ESTATES AS PER AGREEMENT TO SELL DATED 02.12.1987. THEREFORE, REV ENUE SHOULD NOT TAKE CONTRARY STAND WHILE ASSESSING THE RENTAL INCOME IN THE HANDS OF THE ASSESSEE ON THE B ASIS OF AGREEMENT TO SELL AND LATER ON REFUSING TO ACKNOWLEDGE THE AGREEMENT TO SELL DATED 13.07.1989. THE ASSESSEE COULD NOT FILE THIS AGREEMENT TO SELL BEFORE ASSESSING OFFICER BECAUSE IT WAS LYING AT HYDERABAD AT THE TIME OF ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER DID NOT DISPUTE THIS CONTENTION OF THE ASSE SSEE IN THE REMAND REPORT AND MERELY CONTENDED THAT SINC E NO REGISTRATION DEED HAVE BEEN PRODUCED, THEREFORE, AGREEMENT TO SELL MAY NOT BE RELIED UPON. THE ASSE SSING OFFICER, THEREFORE, DID NOT OBJECT TO THE AGREEMENT TO SELL DATED 13.07.1989. WHEN ASSESSING OFFICER MADE ADDIT ION OF THE RENTAL INCOME ON THE BASIS OF AGREEMENT TO S ELL DATED 02.12.1987, THERE WAS NO REASON TO TAKE CONTR ARY VIEW ON THE BASIS OF AGREEMENT TO SELL DATED 13.07. 1989. HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF KULDEEP INDUSTRIES CORPORATION 209 CTR 400 HELD THA T, WHEN ASSESSING OFFICER WAS PRESENT BEFORE LD. CIT(APPEALS), DID NOT RAISE ANY OBJECTION RULE 46 A NOT VIOLATED. 5(II) IN THE PRESENT CASE, THE ASSESSING OFFICER DID NOT OBJECT TO THE AGREEMENT TO SELL DATED 13.07.1989, HOWEVER, HE HAS OBJECTED THAT SINCE NO REGISTRATION DEED HAVE BEEN DONE, DESPITE AGREEMENT TO SELL DATED 7 13.07.1989, THEREFORE, SAME MAY NOT BE RELIED UPON. THEREFORE, THE LD. CIT(APPEALS) IN SUCH CIRCUMSTANC ES SHOULD HAVE ADMITTED THE ADDITI ONAL EVIDENCE FOR THE PURPOSE OF DECIDING THE ISSUE. THE LD. COUNSEL FOR THE ASSESSEE ALSO PRODUCED ON RECORD THE DETAILS OF IMMOVABLE PROPERTIES FILED BY HUSBAND OF THE ASSESS EE BEFORE PUNJAB GOVERNMENT IN WHICH HUSBAND OF THE ASSESSEE HAS DECLARED ALL THESE TRANSACTIONS IN HI S PROPERTY RETURN, THEREFORE, GENUINENESS OF THE AGRE EMENT TO SELL DATED 13.07.1989 CANNOT BE DOUBTED. THEREF ORE, I SET ASIDE ORDERS OF CIT(A) AND ADMIT THE ADDITION AL EVIDENCE. IT MAY ALSO BE NOTED HERE THAT PRIOR TO THE ASSESSMENT YEAR UNDER APPEAL, ASSESSEE WAS FILING H ER RETURN OF INCOME SHOWING THE RENTAL INCOME FOR SELF AND FOR HER MINOR DAUGHTER, AS THE INCOME OF THE MINOR SHALL HAVE TO BE CLUBBED WITH THE INCOME OF ASSESSEE AND THIS FACT IS NOT DISPUTED, THEREFORE, OWNERSHIP RIGHT OF THE DAUGHTER OF THE ASSESSEE WAS NOT CHALLENGED EVEN IN PRECEDING ASSESSMENT YEARS. IN SUBSEQUENT YEAR, WH EN DAUGHTER OF THE ASSESSEE BECAME MAJOR, THE ASSESSEE DID NOT SHOW HER SHARE IN HER RETURN OF INCOME WHICH HA VE NOT BEEN DISPUTED BY THE REVENUE AUTHORITIES. RETU RNS FOR ASSESSMENT YEARS 2007-08 TO 2010-11 HAVE BEEN FILED BY MS. C. SRUTHI REDDY, DAUGHTER OF THE ASSES SEE SHOWING RENTAL INCOME OF HER SHARE IN HER RETURN OF INCOME WHICH HAVE NOT BEEN DISPUTED BY THE REVENUE AUTHORITIES. THEREFORE, CONSIDERING THE TOTALITY O F THE FACTS AND CIRCUMSTANCES AND MATERIAL ON RECORD, I A M OF 8 THE VIEW ASSESSEE HAS BEEN ABLE TO ESTABLISH THAT 5 0% OWNERSHIP OF THE PROPERTY IN QUESTION VESTS WITH TH E DAUGHTER OF THE ASSESSEE AS PER LAW AND THEREFORE, HER SHARE OF INCOME ON ACCOUNT OF RENTAL INCOME ON ATTAINING MAJORITY SHOULD BE ASSESSED IN THE HANDS OF MS. C. SRUTHI REDDY ONLY. THE ADDITION IN THE HAND S OF THE ASSESSEE IS, THEREFORE, WHOLLY UNJUSTIFIED. 6. IN VIEW OF THE ABOVE DISCUSSION, I SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE THE ADDITION OF RS. 1,16,640/- IN THE HANDS OF THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED: 30 TH AUGUST, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH