Omkar Nath Gupta, HUF, Raibareli V. Income Tax Officer, Raibareli

ITA 858/LKW/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2023 (ITAT-LUCKNOW)
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 25-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Opportunity of being heard
• Section: 143(3); 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCHES: A LUCKNOW BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDI CIAL MEMBER ITA NO: 858/LKW/2014 AY: - 2009-10 ONKAR NATH GUPTA, HUF VS. THE INCOME TAX OF FICER, KARTA ONKAR NATH GUPTA RAEBA RELI. MILAN CINEMA ROAD, RAEBARELI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.R. RASTOGI, CA SHRI SHUBHAM RASTOGI, CA RESPONDENT BY : SHRI AMIT NIGAM, DR DATE OF HEARING : 11.8.2015 DATE OF PRONOUNCEMENT : 30.10.2015 O R D E R PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ASSESSEE HAS PREFERRED THIS APPEAL AGA INST THE ORDER DATED 25.08.2014 PASSED BY THE LD. CIT(A)-III, LUCKNOW. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSE E IS HAS CLAIMED THE STATUS OF HUF AND RETURN OF INCOME SHOWING A TOTAL INCOME OF RS. 1,54,140/- WAS FILED BY THE ASSESSEE UNDER THE STATUS OF HUF. THE GROUNDS OF AP PEAL READ AS UNDER:- 1) LD. CIT (APPEALS)-III LKO., ERRED ON FACTS AN D IN LAW IN ADDING INCOME OF RS. 1,54,140/- BELONGING TO ONKAR NATH G UPTA HUF IN THE HANDS OF ONKAR NATH GUPTA (INDIVIDUAL) U/S 64(2) OF I.T. ACT, WITHOUT ANY MATERIAL ON RECORD. ITA NO. 858/LKW/ 2014 ONKAR NATH GUPTA, HUF VS. ITO 2 2) THAT GIFT OF RS. 5,100/- BY CHEQUE HAS BEEN M ADE TO SAID HUF AND RS. 1,000/- DEPOSITED IN THE BANK ACCOUNT OF HUF IS OUT OF ACCUMULATED SAVINGS OF HUF. ACCORDINGLY SHORT TERM CAPITAL GAIN RS. 1,53,743/- AND SAVING BANK INTEREST RS. 395/- OF HUF CANNOT BE ADD ED U/S 64(2) OF THE I.T. ACT IN THE HANDS OF ONKAR NATH GUPTA INDIVIDUA L. 3) THAT TREATING THE INCOME OF THE HUF ON PROTECT IVE BASIS WHILE FRAMING ASSESSMENT U/S 143(3) OF I.T. ACT WITHOUT M AKING ANY ASSESSMENT ON SUBSTANTIVE BASIS OF ONKAR NATH GUPTA PROTECTIVE ADDITION SO MADE IS INVALID. 3. THE LD. AR FOR THE ASSESSEE SUBMITTED THA T SHRI ONKAR NATH GUPTA, KARTA OF SHRI ONKAR NATH GUPTA HUF I.E. THE ASSESSEE FILED T HE INCOME TAX RETURN CLAIMING THE STATUS OF HUF. THE AR SUBMITTED THAT THE ASSESSEE C AME INTO EXISTENCE BY A GIFT OF RS. 5,100/- MADE BY SHRI SATISH KUMAR BANSAL HUF BU T THERE WAS NO JOINT ANCESTRAL PROPERTY. HE FURTHER SUBMITTED THAT A NEWLY CREATED HUF AS A UNIT MAY RECEIVE GIFTS FROM OUTSIDERS OR FROM FATHER AND BROTHERS OF THE K ARTA, WHO ARE NOT MEMBERS OF THE DONEE HUF. HE EMPHASISED THAT ALL SUCH GIFTS WI LL RESULT IN ACCRETION TO THE FAMILY FUND WITHOUT ATTRACTING THE PROVISIONS OF SECTION 6 4 (2) OF THE INCOME TAX ACT, 1961. HE ALSO EMPHASISED THAT THERE COULD BE HUF WHICH DO ES NOT OWN PROPERTY OR CARRY ON BUSINESS. HE ALSO DREW OUR ATTENTION TO PAGES 3, 4 AND 5 OF THE PAPER BOOK WHICH IS COPY OF BANK ACCOUNT OF SHRI ONKAR NATH GUPTA HU F AND HE POINTED OUT THE ENTRY RELATING TO THE GIFT OF RS. 5,100/- CREATED INTO TH E BANK ACCOUNT OF RS. 21.11.2007 THROUGH CHEQUE. HE ALSO DREW OUR ATTENTION TO PAGE 6 OF THE PAPER BOOK WHICH IS A COPY OF GIFT DEED MADE BY SHRI SATISH KUMAR BANSAL, HUF TO SHRI SOM NATH GUPTA, HUF. HE ALSO DREW OUR ATTENTION TO PAGE 23 OF THE P APER BOOK WHICH IS A COPY OF THE BALANCE SHEET OF SHRI ONKAR NATH GUPTA HUF AS ON 31 .3.2008 IN WHICH THE GIFT OF RS. 5,100/- HAS BEEN DULY REFLECTED. LD. AR SUBMITTED T HAT THE GIFT OF RS. 5,100/- BY CHEQUE AND RS. 1,000/- DEPOSITED IN THE BANK ACCOUN T OF HUF IN FACT BELONG TO THE ITA NO. 858/LKW/ 2014 ONKAR NATH GUPTA, HUF VS. ITO 3 HUF AND THE SAME SHOULD NOT HAVE BEEN TAXED IN THE HANDS OF SHRI SOM NATH GUPTA (INDIVIDUAL) U/S 64(2) OF THE INCOME TAX ACT. HE AL SO SUBMITTED THAT SINCE THE HUF WAS VERY MUCH EXISTENCE THE SHORT TERM CAPITAL GAIN OF RS. 1,53,743/- AND SAVING BANK INTEREST OF RS. 395/- BELONGING TO THE HUF COU LD NOT BE TAXED U/S 64(2) OF THE ACT IN THE HANDS OF SHRI ONKAR NATH GUPTA (INDIVIDU AL). IT WAS ALSO HIS PLEA THAT ASSESSING THE INCOME OF HUF ON PROTECTIVE BASIS WIT HOUT MAKING ANY ASSESSMENT ON A SUBSTANTIVE BASIS ON SHRI ONKAR NATH GUPTA WAS IN VALID. 4. THE LD. DR ON THE OTHER HAND PLACED RELIANC E ON THE ORDER OF THE AO AND THE LD. CIT (A) AND PRAYED THAT THE SAME SHOULD BE CONF IRMED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAV E ALSO GONE THROUGH THE DOCUMENTS AVAILABLE ON RECORD. IT IS SEEN FROM PAGE 3 OF THE ASSESSMENT ORDER THAT THE AO WAS OF THE VIEW THAT THE ASSESSEE HAD CREATE D HUF FOR TRADING IN COMMODITY EXCHANGE AND WITH A PURPOSE OF DIVERTING SUCH TRANS ACTIONS FROM HIS INDIVIDUAL RETURN. AS PER THE AO, IT APPEARED TO BE A COLOURAB LE DEVICE FOR LESSENING TAX LIABILITY BY THE KARTA IN HIS INDIVIDUAL RETURN. HE ACCORDING LY MADE ADDITIONS U/S 64(2) OF THE INCOME TAX ACT, 1961 AND ALSO HELD THAT THE ASSESSE ES CLAIM OF HUF WAS INCORRECT. THUS, AS PER THE AO, THE CLAIM OF EXISTENCE OF THE HUF ITSELF WAS INVALID. BEFORE, THE LD. CIT (A), THE ASSESSEE FILED AN ADDITIONAL GROUN D WHICH READS AS UNDER: 1. THE LD. AO ERRED ON FACTS AND IN LAW IN TREATIN G THE INCOME OF THE HUF ON PROTECTIVE BASIS, INSPITE OF THE FACT EXISTENCE OF HUF, AVAILABILITY OF FUNDS AND ITS INCOME HAS BEEN EXPLAINED. 2. THE LD. AO ERRED ON FACTS AND IN LAW IN NOT HOLD ING THE EXISTENCE OF HUF AS VALID, INSPITE OF THE FACT SAID HUF CONSIST OF ONKAR NATH GUPTA AGED ABOUT 53 YEARS, SMT. ITA NO. 858/LKW/ 2014 ONKAR NATH GUPTA, HUF VS. ITO 4 MANJU GUPTA AGED ABOUT 50 YEARS, PREETI GUPTA DAUGH TER, RACHNA GUPTA DAUGHTER, SHAILESH GUPTA SON, NEHA GUPTA, DAUGHTER. THE LD. CIT (A) ALTHOUGH ALLOWED THE ADDITIONAL GR OUND TO BE ARGUED BUT A PERUSAL OF THE ORDER PASSED BY HIM SHOWS THAT HE HAS NOT SP ECIFICALLY ADJUDICATED ON THE ISSUE OF THE EXISTENCE OF THE HUF AND HAS PROCEEDED TO SIMPLY CONFIRM THAT THE AO WAS RIGHT IN MAKING THE ADDITIONS U/S 64(2) OF THE ACT IN THE HANDS OF THE INDIVIDUAL (KARTA OF THE HUF) .THUS THE MAIN ISSUE BEFORE THE LD. CIT (A) HAS NOT BEEN DEALT WITH AND ADJUDICATED BY HER. THE ORDER OF THE LD. C IT (A) MENTIONS SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS THE REMAND REPORT S UBMITTED BY THE AO DURING THE COURSE OF FIRST APPELLATE PROCEEDINGS. A PERUSAL OF THE RECORDS PLACED BEFORE US SHOWS THAT THE ASSESSEE ALSO HAS NOT CARED TO FILE THESE RELEVANT PAPERS BEFORE US. HOWEVER, IN THE INTEREST OF JUSTICE, WE RESTORE THE MATTER TO THE FILE OF THE LD. CIT (A) FOR SPECIFIC ADJUDICATION OF THE ISSUE REGARDIN G THE EXISTENCE OR OTHERWISE OF THE HUF AFTER DULY CONSIDERING ALL THE FACTS OF THE CAS E AND EXAMINING SUCH EVIDENCES WHICH THE ASSESSEE MAY SUBMIT IN THIS REGARD, AFTER GIVING THE ASSESSEE DUE OPPORTUNITY OF BEING HEARD. WE ALSO ADD THAT THE AS SESSEE SHALL EXTEND ALL POSSIBLE COOPERATION FOR AN EARLY DISPOSAL OF THE CASE. 6. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 3 0 TH OCTOBER, 2015. SD/- SD/- (A.K. GARODIA) (SUDHANSHU SRIVASTAVA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: THE 30 TH OCTOBER. 2015 ITA NO. 858/LKW/ 2014 ONKAR NATH GUPTA, HUF VS. ITO 5 VEENA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER DY. REGISTRAR SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 27.10.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 27.10 .2015 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY THE SECOND MEMBER 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER 7. DATE OF FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER