Jaywant Narsing Patil V. The Income Tax Officer Ward No. 1 (1), Belgaum

ITA/100005/2014

AI Insights

The case involves appeals by Jaywant Narsing Patil against the common order of the Income Tax Appellate Tribunal, Panaji, which pertained to several assessment years. The dispute centered on the distribution of compensation received from the Belgaum Urban Development Authority (BUDA) for acquired lands, which was claimed to be shared among Patil and four other individuals under an agreement. The primary legal issue was whether the income received from the compensation was to be treated as the income of an AOP or solely of the assessee. The Tribunal and the High Court both found insufficient evidence to support the claim of AOP, leading to the dismissal of the appeals.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 794120 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 27-08-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: Y V RAVIRAJ
• Assessee Lawyers: C V ANGADI
• Keywords: Assessment years; Capital Gain; Compensation; Expenditure deduction; Income Declaration; Interest; Association of Persons (AOP)
• Section: 147; 260A

Judgement Text

"IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE 27TH DAY OF AUGUST, 2014 PRESENT THE HON’BLE MR.JUSTICE RAM MOHAN REDDY AND THE HON’BLE MR.JUSTICE B.MANOHAR I.T.A Nos. 100005-100008/2014 BETWEEN JAYWANT NARSING PATIL, AGE: 57 YEARS, OCC NOW NIL, R/O. LAXMI GALLI, MUTAGA, SAMBRA ROAD, BELGAUM. ... APPELLANT (BY SRI. C V ANGADI, ADVOCATE) AND THE INCOME TAX OFFICER WARD NO. 1 (1), KHIMJIBAI COMPLEX, OPP. CIVIL HOSPITAL, BELGAUM. ... RESPONDENT (BY SRI. Y V RAVIRAJ, ADVOCATE) THESE APPEALS ARE FILED U/SEC.260A OF THE INCOME- TAX ACT, 1961 AGAINST ORDER PASSED IN ITA.NO.106, 107, 108 AND 109/PNJ/2013 ON THE FILE OF THE INCOME TAX APPELLATE TRIBUNAL, PANAJI BENCH, PANAJI, THE APPEAL IS HEREBY ALLOWED. THESE APPEALS COMING ON FOR ADMISSION THIS DAY, RAM MOHAN REDDY.J., DELIVERED THE FOLLOWING: 2 JUDGMENT These appeals under Section 260 (A) of the Income Tax Act, 1961, for short ‘the Act’, are preferred by the Assessee, being aggrieved by the common order dated 30.10.2013 of the Income Tax Appellate Tribunal, Panaji Bench, Panaji, in ITA Nos.106, 107, 108, 109, 110, 111 and 112/PNJ/2013 relating to the assessment years 2003-2004, 2005-2006, 2006-2007 and 2008-2009, insofar as it relates to ITA Nos.106, 107, 108 and 109/PNJ/2013. 2. Facts briefly stated are the lands belonging to one Bhatkande family in particular Smt. Jyotibai Krishna Bhatkande and others when acquired by the Belgaum Urban Development Authority (BUDA), compensation was made over to the said family attracting capital gain and interest, from out of which the said family filed returns claiming expenditure made over to the assessee, under an agreement dated 09.07.2003 with the assessee, 3 whereunder it was agreed that 60% of the amount of compensation would be paid to the assessee, following which the assessee received ` 1,19,41,725/- on different dates between 11.01.2003 and 25.08.2007. The said amounts were admittedly received by the assessee by cheque through banking channel in the name of the assessee. From out of that amount, the assessee is said to have paid four other persons during the assessment year 2005-2006 and 2006-2007 in a sum of ` 2,17,240/- each. It is also asserted, that during the assessment years 2003-2004, 2005-2006, 2006-2007 and 2008-2009 certain payments were made to the said four persons. 3. The tax returns filed by four other persons, were finalised on 29.10.2010. However, assessee filed return of income on 08.05.2013 declaring income of ` 80,900/- though received 60% of the compensation on various dates. That return of income was after receipt of notice under Section 147 of the Act. The four other persons 4 along with the appellant filed common affidavit on 07.12.2009 stating that each of them did not get more than 20% of the compensation amount and that they worked jointly to ensure payment of compensation to the land losers. 4. Though assessee advanced a contention that the amount of ` 1,19,41,725/- was distributed amongst four other persons, having failed to produce documentary evidence, nevertheless, the Commissioner of Income Tax (A) relied upon the affidavits filed by the parties, and in the absence of documentary evidence, confirmed the order of the Assessing Officer, accepting 25% as expenditure and the return of income as an Association of Persons (AOP). The Income Tax Appellate Tribunal by the order impugned reversed the finding of the Commissioner of Income Tax (A) in ITA Nos.106 to 112/PNJ/2013 for the respective assessment years to hold that the income was that of the assessee and not of Association of Persons 5 (AOP) and accordingly allowed the Department’s appeal, in part, while confirming the order of the Assessing Officer allowing 25% as expenditure. 5. Although learned counsel for the appellant submits that there is enough and more material to establish expenditure incurred by the assessee which deduction the AOP is entitled to claim in the return filed, we are not impressed by that submission. The Income Tax Appellate Tribunal, on fact, recorded a finding that there is no material whatsoever to establish expenditure incurred by the Assessee as an AOP, hence we find no legal infirmity in the order impugned calling for interference. 6. We may also notice that the Assessing Officer allowed 25% of the income as expenditure in all the assessment orders for the assessment years 2003-2004, 2005-2006, 2006-2007 and 2008-2009 which was confirmed by the Income Tax Appellate Tribunal. In the circumstances, no 6 substantial question of law arise for decision making. Appeals devoid of merit are dismissed. SD/- JUDGE SD/- JUDGE jm/- "