Dy.CIT, Central Circle-7, Hyderabad V. T Rana Pratap Singh & Others (AOP), R.R.Dist

ITA 866/HYD/2014

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 3040 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-05-2018
• Assessment Year: 2006-2007
• Appeal Filed On: 08-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D PRASAD RAO
• Keywords: Search and seizure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A BENCH: HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA. NO.866/HYD/2014 ASSESSMENT YEAR:2006 - 2007 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 15(1), HYDERABAD. VS. SHRI T. RAMA PRATAP SINGH, H.NO.1 - 3, PEERZADIGUDA, GHATKESAR MANDAL, R.R. DISTRICT, SECUNDERABAD. PAN: ABXPT 6791 R (APPELLANT) (RESPONDENT) FOR ASSESSEE: SHRI MOHD. AFZAL FOR REVENUE : SHRI D. PRASAD RAO, DR DATE OF HEARING : 28.05.2018 DATE OF PRONOUNCEMENT : 28.05.2018 ORDER PER D. MANMOHAN , VP. THIS IS AN APPEAL FILED AT THE INSTANCE OF REVENUE AND IT PERTAINS TO A.Y. 2006 - 07. FOLLOWING GROUNDS WERE URGED BEFORE THE TRIBUNAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE CIT (A) ERRED IN DELETING THE PROTECTIVE ADDITION MADE IN THE HANDS OF AOP ON ACCOUNT OF UNDISCLOSED INCOME FROM SALE OF LANDS. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) ON THE ABOVE GROUND BE SET - ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. IT MAY BE NOTICED THAT THE ASSESSING OFFICER PASSED A COMBINED ORDER FOR THE ASSESSMENT YEARS 2003 - 04 TO 2007 - 08 SINCE THE ISSUE INVOLVED IN ALL THESE APPEALS IS IDENTICAL. CONSEQUENT TO THE SEARCH AND SEIZURE OPERATION CARRIED OUT IN THE CASE OF SHRI B. RAMDAS GOUD AND D. RAGHUPATHI GOUD, THE A.O. WAS OF THE OPINION THAT UNDISCLOSED INCOME , RECORDED IN THE BOOKS OF ACCOUNT AND DIARIES SEIZED , IS 2 ASSESSABLE IN THE HANDS OF SH RI RANA PRATAP SINGH AND OTHERS. HOWEVER, NOTICE U/S 153C WAS ALSO ISSUED TO THE ASSESSEE HEREIN , IN THE STATUS OF AOP , AND PROCEEDED TO ADD THE UNDISCLOSED INCOME REFERABLE TO SALE OF LAND. THOUGH IN THE INDIVIDUAL HANDS SUBSTANTIVE ASSESSMENTS WERE MADE , IN THE STATUS OF AOP, THE ASSESSING OFFICER ADDED THE UNDISCLOSED INCOME ON PROTECTIVE BASIS. 3. THE CASE OF THE ASSESSEE WAS THAT THE LAND BELONGS TO THE RESPECTIVE HUFS AND UNDISCLOSED INCOME, IF ANY, SHOULD HAVE BEEN TAXED IN THE HANDS OF THE RESPECT IVE HUFS. AT ANY RATE, ASSESSMENT MADE IN THE HANDS OF AOP IS LIABLE TO BE QUASHED. 4. LD. CIT(A) CONSIDERED THE ISSUE IN GREAT DETAI L AND OBSERVED THAT CO - OWNERS CANNOT BE CONSIDERED AS AN AOP AND THEREFORE, THE ADDITIONS MADE IN THE HANDS OF THE AOP WAS SET - ASIDE. IN THE REGARD, LD. CI T(A) OBSERVED AS UNDER: 6. IN THE INSTANT CASE, THE MEMBERS OF THE APPELLANT AOP HAVE BECOME CO - OWNERS MERELY BY THE OPERATION OF THE LAWS OF SUCCESSION AND NOT THROUGH ANY ACT OF COMMISSION ON THEIR PART. THE TRANS ACTIONS PERTAINING TO SALE OF PROPERTIES OWNED JOINTLY BY THEM MERELY FOR THE PURPOSE OF DISPOSING OF THE PROPERTIES AND NOT BECAUSE THEY INTENDED TO CARRY OUT TRADE / BUSINESS ACTIVITY AS A JOINT VENTURE. HENCE, THE CO - OWNERS CANNOT BE CONSIDERED AS AN A SSOCIATION OF PERSONS AND THE ASSESSING OFFICER HAS CORRECTLY BROUGHT THE SALES CONSIDERATION TO TAX IN THE HANDS OF THE INDIVIDUALS CONCERNED. IN THE APPELLATE ORDERS IN THE CASE OF INDIVIDUALS, THE ACTION OF THE ASSESSING OFFICER HAS BEEN HELD TO BE COR RECT AND HENCE THE PROTECTIVE ASSESSMENTS IN THE HANDS OF THE AOP ARE BOTH ERRONEOUS AND REDUNDANT. HENCE, THE APPEAL OF THE APPELLANT FOR ALL FOUR YEARS IS ALLOWED AND ADDITION ON THE BASIS OF PROTECTIVE ASSESSMENTS CARRIED OUT BY THE ASSESSING OFFICER ST AND DELETED. 5. AGGRIEVED BY THIS ORDER, FOR ALL THE FOUR YEARS, REVENUE PREFERRED APPEAL S BEFORE THE TRIBUNAL. 6. AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE PLACED BEFORE US A COPY OF THE ORDER OF ITAT HYDERABAD A BENCH IN THE ASSESSEES OWN CASE FOR THE AYS 2003 - 04, 2007 - 08 AND 2008 - 09, 3 EMANATED FROM A COMBINED ORDER OF THE LD. CIT(A) (WHICH IS CHALLENGED BEFORE US), TO HIGHLIGHT THAT VIDE ORDER DATED 24.01.2018, (ITA NOS.921 TO 923/HYD/2014 AND OTHERS) THE TRIBUNAL QUASHED THE ORDER PAS SED BY THE A.O. 7. WE HAVE ALSO HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND CAREFULLY PERUSED THE RECORD. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE HOLD THAT THE LD. CIT(A)S CONCLUSIONS DO NOT CALL FOR ANY INTERFERENCE. WE THEREFORE DISMISS THE A PPEAL FILED BY THE REVENUE. 8. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH MAY, 2018. SD/ - SD/ - (B. RAMAKOTAIAH) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT HYDERABAD, DATED: 28 TH MAY, 2018. OKK, SR.PS COPY TO 1. SHRI T. RANA PRATAP SINGH, H.NO.1 - 3, PEERZADIGUDA, GHATKESAR MANDAL, R.R. DISTRICT, SECUNDERABAD. 2. ACIT - 15(1), 5 TH FLOOR, D - BLOCK, I.T. TOWERS, A.C. GUARDS, HYDERABAD. 3. CIT (A), GUNTUR. 4. CIT (CENTRAL), HYDERABAD. 5. DR, ITAT, HYDERABAD. 6. GUARD FILE