Shri. Indrajeet Ghorpade, Bangalore V. Assistant Commissioner of Income-Tax, 4(3)(1), Bangalore

MA 105/BANG/2023

AI Insights

The case involves Shri Indrajeet Ghorpade, who filed a miscellaneous petition seeking rectification of the Tribunal's earlier order concerning the assessment year 2016-17. The primary issues were the incorrect adjudication of a deduction under section 54F of the Income-tax Act, 1961, and the incorrect assessment of the assessee's status as an 'individual' instead of 'HUF' (Hindu Undivided Family) for the income derived from ancestral property. The Tribunal acknowledged the errors in its previous order and corrected them by deleting the relevant paragraphs and clarifying the assessee's status and the responsibilities regarding the computation of income for co-owners.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129959 (ITAT-BANGALORE)
• Duration Of Justice: 28 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-05-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Next Hearing Date: 18-05-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 27-04-2023
• Other Referred Cases: ITO v/s. Ch. Achaiah (218 ITR 239), CIT v/s. K. Govinda Reddy and others (ITA No.1160 & 1161/Bang/2013 dated 7.6.17), K. Muniswamy Reddy and others v/s. ACIT (ITA No. 1158/Bang/2013 dated 7.6.2017)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order
• Section: 54F; 254(2)

Judgement Text

MP No.105/Bang/2023 Shri Indrajeet Ghorpade, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “C’’ BENCH: BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER M.P. No.105/Bang/2023 (Arising out of ITA No.61/Bang/2023) Assessment Year: 2016-17 Shri Indrajeet Ghorpade No.314, 7 th B Main 4 th Block Koramangala Bangalore 560 034 PAN NO : ADDPG7761N Vs. ACIT Circle-4(3)(1) Bangalore APPELLANT RESPONDENT Appellant by : Shri G, Guruswamy, A.R. Respondent by : Shri B.R. Ramesh, D.R. Date of Hearing : 19.05.2023 Date of Pronouncement : 26.05.2023 O R D E R PER BEENA PILLAI, JUDICIAL MEMBER: This MA filed by the assessee seeking rectification order of the Tribunal in ITA No.61/Bang/2023 dated 27.3.23. The ld. AR submitted that the Tribunal wrongly adjudicated the issue relating to section 54F of the Income-tax Act,1961 ['the Act' for short] as an additional ground though the assessee has not raised this additional ground before this Tribunal and that additional ground was raised by assessee before ld. CIT(A) and was granted deduction u/s 54F of the Act. MP No.105/Bang/2023 Shri Indrajeet Ghorpade, Bangalore Page 2 of 7 2. We have heard the rival submissions and perused the materials available on record. In our opinion, there crept an error in the order of the Tribunal while adjudicating the ground relating to section 54F of the Act, since there is no such ground before this Tribunal for adjudicating this issue. 2.1 Since there is no such ground before us to adjudicate the issue relating to deduction u/s 54F of the Act as the ld. CIT(A) has already allowed the deduction u/s 54F of the Act, accordingly, the relevant para No.3 to 3.5 of the impugned order stands deleted. (Accordingly, the relevant para nos.3 to 3.4 of the order stands deleted.) 3. Next issue in this miscellaneous appeal is with regard to findings of the Tribunal that the assessee is to be assessed in the status of “individual” only. 3.1 In this regard, the ld. A.R. submitted that, the property situated in Sy. No. 109, Doddagubi Village, Bidarahalli Hobli, Bangalore East Taluk was purchased by the ancestor of the assesses namely Bujangarao Yeshwantharao Ghorpade and Dattajirao Bujangarao Ghorpade vide registered Sale Deed dtd: 1203-1956, as per the recitals mentioned on para 2 page 4 of the aforesaid Sale Deed. The land so purchased in the year 1956 was in the possession and enjoyment of the ancestors of the assessee named above. Thereafter on demise of the original owners, the property devolved upon the legal heirs of Dattajirao Bujangarao Ghorpade father of the assessee and upon demise of Dattaji Rao B. Ghorpade, the ancestral land collectively belonged to the wife, sons and daughter of Late. Dattajirao Bujangarao Ghorpade. Therefore, the property so inherited from the ancestors was sold by the assessee and his family members through a registered Sale Deed MP No.105/Bang/2023 Shri Indrajeet Ghorpade, Bangalore Page 3 of 7 dtd: 10-02-2016. The Property so sold was inherited and ancestral property. The assessee had not acquired the said property by his self- earned funds and therefore the Capital gains if any, on sale of the inherited property are liable to be assessed in the Status of ‘HUF’ and not in the status of ‘Individual’. 3.1 The Ld. A.R. relied on the decision of the Hon'ble Supreme Court in the case of ITO v/s. Ch. Achaiah reported in (218) ITR 239', wherein it was held that, the income should be taxed in the right hands only. The Ld. A.R. argued that the income arising out of the sale of property vide Sale Deed10-02-2016 relating to sale of ancestral property ought to have been assessed in the status of “HUF” and not in the “Individual” Status as a result of which the assessment made by the AO in the status of “Individual” was not in accordance with the judgment of the Hon'ble Apex Court (supra) and therefore this Tribunal was not justified to hold that the income to be taxed in the status of Individual only. This Tribunal followed the decision of the Hon'ble Supreme Court in the above case in ITA No. 100/Bang/2016 dtd: 22-11-2017 in the case of Vijay v/s ITO. In view of the above judicial decision the order of the ITAT needs modification against the directions issued that the income should be taxed in the status of Individual only. Further the Ld. A.R. placed reliance on the decision of the Hon'ble Karnataka High Court in the case of CIT v/s. K. Govinda Reddy and others (ITA No.1160 & 1161/Bang/2013 dated 7.6.17, wherein the Hon'ble High Court in para 16 held that, the contention of the revenue that the property was not a joint family property and it is individual property of Krishna Reddy is untenable. The relevant para is reproduced as under: MP No.105/Bang/2023 Shri Indrajeet Ghorpade, Bangalore Page 4 of 7 "16. The conduct of Krishna Reddy in getting his sons name mutated in the revenue records jointly and contributing the land in favour of the firm and would show that the property was joint family property, besides the memorandum of partition of the year 1999 which came into existence much before search would vouch safe that the family is a joint family and that the landed property belongs to the joint family. In the context of the said facts and the documentary material, the contention of the revenue that the property was not a joint family property and it is individual property of Krishna Reddy is untenable. 3.2 The Ld. A.R. for the assessee further placed reliance on the decision of the ITAT in ITA No. 1158/Bang/2013 dated 7.6.2017 in the case of K. Muniswamy Reddy and others v/s. ACIT, wherein the ITAT in para 7.1 and 7.2 held that, the income should be assessed in the Status of HUF by relying on following observations: "7.1 On appeal before the CIT(A), the CIT(A) had rejected the claim that the property belongs to HUF on the ground that it was purchased in the name of the appellant and his wife Smt. K.Radha after partition deed. 7.2 In our considered opinion, the CIT(A) was not justified in rejecting the same merely on the ground that this property does not find a place in the partition deed. It is always possible that property can be acquired out of nucleus of the funds of the HUF in which event, property always belongs to HUF. Therefore, income arising out of the property should be assessed only in the hands of the HUF. Thus, the appeals filed by the assessee viz. ITA Nos.1158 & 1159/Bang/2013 are allowed. K.Govinda Reddy (Indl.): (ITA Nos.1160 & 1161/Bang/2013 Assessment years: 2003 & 2004-05)" 3.3 The ld. A.R. submitted that the Land sold was purchased by the ancestors in the year 1956 and upon the death of ancestors, the property was inherited by all the family members and therefore the property sold belonged to the HUF of the petitioner and hence the income if any arising out of the Sale of Property is required to be assessed in the status of HUF and not in the status of “Individual”. MP No.105/Bang/2023 Shri Indrajeet Ghorpade, Bangalore Page 5 of 7 4. The ld. D.R. relied on the order of the Tribunal. 5. We have heard the rival submissions and perused the materials available on record. Admittedly, the assessee filed return of income for the assessment year under consideration disclosing status as “individual” only. Now the ld. A.R. wanted the status mentioned and assessed as “individual” to be assessed as “HUF” which cannot be entertained in terms of proceedings u/s 254(2) of the Act. Accordingly, we dismiss this ground having no merit. 6. Next grievance of the assessee in this petition is with regard to findings of the Tribunal in para 5.1 of the order wherein inter-alia as follows: “The assessee is directed to furnish all relevant details like computation of income filed by the assessee and also the Co-owners for the year under consideration, if any.” 6.1 The contention of the ld. A.R. is that the matter was already examined by the AO after considering the Sale Deed dtd: 10- 02-2016 which was produced by the assessee before the AO. Therefore, the issue as regards assessability of share of Sale Consideration in the hands of the assessee needs no remanding of the case back to the AO with a direction to go by the Sale Deed dtd: 10-02-2016 which was already examined by the AO and hence a clear direction to the AO is necessary to adopt the 1/3 rd Share of Sale consideration of the petitioner amounting to Rs. 5,50,90,998/- paid by the Purchasers. The ld. A.R. submitted that the burden of furnishing details of computation of income filed the Co-owners cannot be placed on the assessee as is not competent to obtain the details of other co-owners as all the owners are residing in different parts of India. The AO if require under the law can initiate the proceedings against the co-owner separately and therefore the direction issued by the Tribunal MP No.105/Bang/2023 Shri Indrajeet Ghorpade, Bangalore Page 6 of 7 relating to filing of details of income in the case of Co-owners was uncalled for as the same was out of context of the proceedings. 7. The ld. D.R. strongly relied on the order of the Tribunal. 8. We have heard the rival submissions and perused the materials available on record. The Tribunal in its impugned order directed the assessee to furnish the relevant details like computation of income filed by the assessee and also the co-owners for the year under consideration, if any. In our opinion, the computation of income of the assessee is already on record of the AO which need not be produced and also with regard to computation of income of the co-owners, it is not the duty of the assessee to produce before AO. Hence, we will delete the following portion of para 5.1 of the impugned order. “The assessee is directed to furnish all relevant details like computation of income filed by the assessee and also the co-owners for the year under consideration, if any”. 9. Finally, para nos.4.1, 5.1 & 6 of the said order are to be read as follows: “Para 4.1: Now we will adjudicate ground No.6” “Para 5.1: In the interest of justice, based on the above facts, we remand this issue back to the ld. AO with the direction to go by the sale deed dated 10.2.2016 and to bring only the capital gain arising from the share of assessee for taxation in accordance with law.” “Para 6: Accordingly, the main ground no. 6 raised by the assessee stands allowed for statistical purposes only.” No change in the final result of the appeal, which will remain as it is. MP No.105/Bang/2023 Shri Indrajeet Ghorpade, Bangalore Page 7 of 7 10. In the result, the miscellaneous petition filed by the assessee is partly allowed. Order pronounced in the open court on 26 th May, 2023 Sd/- (Chandra Poojari) Accountant Member Sd/- (Beena Pillai) Judicial Member Bangalore, Dated 26 th May, 2023. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(Judicial) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore.