The ITO, Ward-2, Bharuch V. Smt. Padmaben S.Valand, Bharuch

ITA 92/AHD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8900 (ITAT-AHMEDABAD)
• Duration Of Justice: 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-02-2010
• Assessment Year: 1992-1993
• Appeal Filed On: 12-01-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NEETA SHAH
• Assessee Lawyers: SUNIL H TALATI
• Keywords: Opportunity of being heard; TDS; Set aside
• Section: 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC, AHMEDABAD BEFORE SHRI I.S. VERMA, JUDICIAL MEMBER I.T.A. NO. 91/AHD/2010 - AY 1991-92 I.T.A. NO. 92/AHD/2010 - AY 1992-93 I.T.A. NO. 93/AHD/2010 - AY 1993-94 I.T.A. NO. 94/AHD/2010 - AY 1994-95 I.T.A. NO. 95/AHD/2010 - AY 1995-96 I.T.A. NO. 96/AHD/2010 - AY 1996-97 I.T.A. NO. 97/AHD/2010 - AY 1997-98 I.T.A. NO. 98/AHD/2010 - AY 1998-99 I.T.A. NO. 99/AHD/2010 - AY 1999-00 I.T.A. NO.100/AHD/2010 - AY 2000-01 I.T.A. NO.101/AHD/2010 - AY 2001-02 I.T.A. NO.102/AHD/2010 - AY 2002-03 I.T.A. NO.103/AHD/2010 - AY 2003-04 ITO, WD.2 VS SMT. PADMABEN S VALAND BHARUCH BAZAR, AT VAGRA, DIST:BHARUCH PAN : AEJPV3272L (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. NEETA SHAH RESPONDENT BY: SHRI SUNIL H TALATI O R D E R ALL THESE APPEALS BY THE REVENUE ARE AGAINST THE C OMMON ORDER OF THE CIT(A)-VI, BARODA DATED 05 TH OCTOBER, 2009 FOR THE ASSESSMENT YEARS 1991-92 TO 2003-04 AND THE COMMON GROUNDS TAKEN AS UNDER: 1(I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A ERRED IN DIRECTING THAT THE NET TAXABLE SHARES OF THE CO-OWNERS (AFTER ALLOWING FOR THEIR E XEMPTION LIMIT) MAY BE CLUBBED IN THE HANDS OF THE ASSESSEE AND TAXED ACCORDINGLY. THE CIT(A) FURTHER ERRED IN DIR ECTING TO GIVE CREDIT FOR THE TDS PROPORTIONATELY IN RESPECTI VE YEARS. 1(II) THE DECISION OF LD.CIT(A) IS NOT ACCEPTABLE B ECAUSE THERE IS NO SUCH PROVISION IN THE I.T. ACT, 1961 TO CLUB THE INCOME OF OTHER PERSONS IN THE HANDS OF AN ASSESSEE EXCEPT FO R THE MINOR SON OR DAUGHTER. ITA NOS 91 TO 103/AHD/2010 2 2. PARTIES HAVE BEEN HEARD. THE LEARNED DR AT THE OUTSET CHALLENGED THE DIRECTIONS / OBSERVATIONS OF THE FINDINGS OF THE CI T(A) CONTAINED AT PARAGRAPH 4.2.1 OF HIS ORDER WHEREAT HE HAS STATED AS BELOW: 4.2.1.. LOOKING INTO THE PECULIAR CIRCUMSTANCE S AND ACCEPTING THE PLEA OF THE APPELLANT, THE NET TAXABL E SHARES (AFTER ALLOWING FOR THE EXEMPTION LIMIT) OF THE CO-OWNERS IN VARIOUS YEARS MAY BE CLUBBED IN THE HANDS OF PADMABEN AND TAXED A CCORDINGLY. THE A.O. IS ACCORDINGLY DIRECTED TO TAX THE PROPORT IONATE SHARE OF SMT. PADMABEN IN VARIOUS YEARS AND ALSO THE TAXABLE COMPONENT OF INTEREST INCOME OF OTHER CO-OWNERS FOR EACH YEAR AND ALSO GIVE CREDIT FOR THE TDS PROPORTIONATELY IN RESPECTIVE YE ARS. ACCORDING TO THE LD DR THE CIT(A) HAVING OBSERVED I N THE EARLIER PART OF PARAGRAPH 4.2.1 TO THE EFFECT THAT AS PER INCOME-T AX ACT, THE INCOME OF OTHER PERSON CANNOT BE CLUBBED IN THE HANDS OF THE APPELL ANT (EXCEPT FOR THE MINOR SON OR DAUGHTER) SHOULD NOT HAVE GIVEN A FINDING FOR C LUBBING OF THE INCOME OF OTHER CO-OWNERS IN THE HANDS OF THE ASSESSEE, SMT. PADMAB EN SHANTILAL VALAND BECAUSE LAW DOES NOT PERMIT SUCH AN ACTION. IT WAS FURTHER SUBMITTED THAT THE ORDER OF THE CIT(A) IN THIS RESPECT IS THEREFORE AG AINST THE STATUTE BECAUSE INCOME-TAX CAN BE CHARGED ONLY BY MAKING AN ASSESSM ENT OF THE PERSON TO WHOM THE INCOME BELONGS AND NOT BY TAXING THE INCOM E BELONGING TO ONE PERSON, IN THE HANDS OF ANOTHER PERSON. HAVING SAID SO, THE LEARNED DEPARTMENTAL REPRESENTATIVE WANTED TO REFER TO OBSERVATIONS OF T HE ASSESSING OFFICER ON PAGES 5 & 7 WHEREIN HE HAS OBSERVED THAT THERE IS NO EVID ENCE THAT THE TDS CERTIFICATE WAS IN THE NAME OF CO-OWNERS AND ALSO THAT THE COMP ENSATION WAS GRANTED IN THE NAME OF CO-OWNERS. IT WAS THEREFORE, SUBMITTED THA T THE ORDER OF THE CIT(A) MAY BE REVERSED WITH RESPECT TO ISSUES RAISED IN THE GR OUNDS TAKEN BY THE REVENUE. 2. THE LD AR ON THE OTHER HAND FIRST OF ALL OBJECTE D TO THE LD DRS REFERENCE TO OBSERVATIONS ON PAGES 5 & 7 OF THE ASSESSING OFFICE RS ORDER (SUPRA) BY SUBMITTING THAT THE ISSUE CONSIDERED BY THE ASSESSI NG OFFICER IS NOT SUBJECT MATTER OF PRESENT APPEALS AND THEREFORE, THE QUESTION AS T O WHETHER THE TDS CERTIFICATE ITA NOS 91 TO 103/AHD/2010 3 WAS IN THE NAME OF CO-OWNERS OR NOT OR AS TO WHETHE R COMPENSATION WAS GRANTED TO THE CO-OWNERS IS NOT FOR THE CONSIDERATION OF TH E TRIBUNAL. 3.1 HAVING SAID AS ABOVE, THE LD AR FURTHER SUBMITT ED THAT SO FAR AS THE TAXABILITY OF INTEREST IN THE HANDS OF ANY OF THE C O-OWNERS INDIVIDUALLY OR IN THE HANDS OF ONE PERSON IN CONCERNED, THE HONBLE SUPRE ME COURT IN THE LATEST CASE OF CIT VS GANSHYAM HUF 315 ITR 1 (SC) HAS LAID DOWN THE PROPOSITION THAT INTEREST GRANTED ON ENHANCED COMPENSATION IS INTERE ST GRANTED U/S 28 OF THE LAND ACQUISITION ACT AND, THEREFORE, THE SAME IS PA RT OF ENHANCED COMPENSATION WHEREAS INTEREST GRANTED FOR DELAY IN PAYMENT OF CO MPENSATION (U/S 34 OF THE LAND ACQUISITION ACT) IS THE INTEREST U/S 34 OF THE LAND ACQUISITION ACT. IN VIEW OF THIS PROPOSITION OF LAW LAID DOWN BY THE HONBLE SU PREME COURT, THE LD.AR FURTHER SUBMITTED THAT SO FAR AS THE PRESENT CASES ARE CONC ERNED THE INTEREST UNDER DISPUTE HAS BEEN ALLOWED ON ENHANCED PART OF COMPEN SATION AND THEREFORE FALLS WITHIN THE INTEREST ALLOWABLE U/S 28 OF THE LAND AC QUISITION ACT WHICH IN TURN, AS HAS BEEN HELD BY THE HONBLE SUPREME COURT IN THE C ASE OF GANSHYAM HUF (SUPRA), FORMS PART OF ENHANCED COMPENSATION. IT W AS, THEREFORE, SUBMITTED THAT THE ASSESSEES LAND BEING AGRICULTURAL LAND AND SIT UATED OUTSIDE 8 KILOMETERS FROM THE LIMIT OF BHARUCH MUNICIPALITY, THE ENHANCE D COMPENSATION ON ACQUISITION OF AGRICULTURAL LAND ITSELF WAS NOT TAXABLE MEANING THEREBY THAT THE INTEREST WHICH IS SUBJECT MATTER OF APPEALS BEFORE THE TRIBUNAL WA S EXEMPT FROM TAX AND PLEADED THAT THE ORDER OF THE CIT(A) MAY BE QUASHED . 4. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND THE FACTS AND CIRCUMSTANCES OF THE CASE I AM OF THE OPINION THAT SO FAR AS THE OBSERVATION OF THE CIT(A) IN THE LATER PART OF PARAGRAPH 4.2.1, WHICH ARE OBJECTED T O BY THE LD.DR ARE CONCERNED, ARE NOT SUSTAINABLE IN LAW AS WELL AS ON FACTS. SO FAR AS RELIANCE OF THE LD.DR ON THE OBSERVATIONS OF THE ASSESSING OFFICER ON PAGES 5 & 7 OF THE ASSESSMENT ORDER ARE CONCERNED, THE REVENUE HAVING BEEN NOT RAISED A NY GROUND WITH RESPECT TO THESE ISSUES, THE REFERENCE OF THE LD.DR IS OF NO U SE. ITA NOS 91 TO 103/AHD/2010 4 5. COMING TO THE SUBMISSION OF THE LD.AR, I, AFTER HAVING GONE THROUGH THE ORDER OF THE CIT(A) CONSIDER IT JUSTIFIED AND IN TH E INTEREST OF BOTH THE PARTIES THAT THE ISSUE RELATING TO TAXABILITY OF INTEREST REQUIR ES RE-CONSIDERATION AT THE HANDS OF THE CIT(A) ESPECIALLY IN THE LIGHT OF LATEST DECISI ON OF THE HONBLE SUPREME COURT (SUPRA). CONSEQUENTLY, THE ISSUE RELATING TO TAXAB ILITY OF THE INTEREST IN ALL THESE CASES, IS RESTORED BACK TO THE CIT(A) WITH THE DIRE CTIONS THAT HE SHALL DECIDE THIS ISSUE AFRESH IN ACCORDANCE WITH LAW KEEPING IN VIEW THE AFORESAID DECISION OF THE SUPREME COURT. BOTH THE PARTIES, SHALL, HOWEVER, B E GIVEN A PROPER OPPORTUNITY OF BEING HEARD. 5. THE CONSOLIDATED ORDER OF THE CIT(A) IS, THEREFO RE, SET ASIDE AND REVENUES APPEALS ARE ALLOWED, FOR STATISTICAL PURPOSES. 6. ORDER PRONOUNCED ON THIS 10 TH DAY OF FEBRUARY, 2010. SD/- (I.S. VERMA) JUDICIAL MEMBER AHMEDABAD, DT : 10 TH FEBRUARY, 2010 PK/- COPY TO: 1. THE ASSESSEE 2. THE REVENUE 3. THE CIT(A)-VI, BARODA 4. THE CIT-III, BARODA BY ORDER 5. THE DR, SMC BENCH (TRUE COPY) DEPUTY REGISTRAR, ITAT, AHMEDABAD