RAM CHANDRA SINGH V. COMMISSIONER OF INCOME TAX and A

MA/159/2011

AI Insights

The case involves an appeal by Ram Chandra Singh against the order of the Income Tax Appellate Tribunal, Patna, which pertained to the Assessment Year 2005-06. The primary contention was regarding the treatment of Rs.16.79 lakhs received as advances for flats in a multistoried building, which the appellant claimed were receipts of the HUF and not individual income, thus not required to be reflected in his personal accounts. The Tribunal and lower authorities had rejected this explanation, leading to the appeal. The High Court found that the lower authorities had not adequately considered the materials and explanations provided by the appellant, particularly regarding the nature of the bank account and the timing of the receipts.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 760386 (HC-PATNA)
• Appeal Type: Others
• Pronouncement Date: 30-04-2012
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: HARSHWARDHAN PRASAD; ARCHANA SINHA
• Assessee Lawyers: D V PATHY; ABHI SARKAR
• Keywords: Assessment Year 2005-06; HUF land; Income Tax; Joint account; Unexplained income; Multistoried apartments
• Section: 46A(3); 41 Rule 11

Judgement Text

"IN THE HIGH COURT OF JUDICATURE AT PATNA Miscellaneous Appeal No.159 of 2011 ====================================================== Ram Chandra Singh, son of Late Ramnandan Singh, resident of 301, Awadhkunj Apartment, Yarpur, Kachchi Talab, P.O. GPO, Patna, P.S. Gardanibag, District Patna .... .... Appellant/s Versus 1. Commissioner Of Income Tax, Patna having its office at Central Revenue Building, Beerchand Patel Marg, Patna 2. Asstt. Commissioner of Income Tax, Circle-5, having its office at Loknayak Jaiprakash Bhavan, Dak Bungalow Road, Patna .... .... Respondent/s ====================================================== Appearance : For the Appellant/s : Mr. D.V.Pathy, Advocate Mr Abhi Sarkar, Advocate For the Respondent/s : Mr. Harshwardhan Prasad, Advocate Mrs Archana Sinha, Advocate ====================================================== CORAM: HONOURABLE MR. JUSTICE SHIVA KIRTI SINGH and HONOURABLE MR. JUSTICE VIKASH JAIN ORAL ORDER (Per: HONOURABLE MR. JUSTICE SHIVA KIRTI SINGH) 2 30-04-2012 Heard the parties in detail at the stage of hearing under Order 41 Rule 11 CPC. 2. This appeal is directed against order dated 4.10.2010 passed by learned Income Tax Appellate Tribunal, Patna Bench in ITA No.78/PAT/2009 relating to Assessment Year 2005-06. 3. Learned counsel for the appellant has argued at length and has taken us through the assessment order, the appellate order passed by the learned CIT (A) as well as the order under appeal for raising two substantial questions of law. According to him, the first question is that the authorities have failed to consider the relevant facts such as availability of HUF land on which Patna High Court MA No.159 of 2011 (2) dt.30-04-2012 2 / 4 2 multistoried apartments were constructed and that the advances against flats as claimed by the appellant had been deposited in a joint account belonging to the appellant and his father and hence, the Revenue ought to have accepted the explanation of the appellant that such advances amounting to Rs.16.79 lakhs were receipt of the HUF and, therefore, this money had rightly not been reflected in the accounts book of the appellant. The second question raised before us is that even if on facts the views of the authorities is accepted that the transactions in the joint bank account were that of the appellant in individual capacity only, they should have looked to all the relevant materials and should not have rejected his explanation that the amount of Rs.16.79 laks was a receipt by way of advances or part of consideration money through cheques against admitted sale of flats in a newly constructed multistoried building, in support of which as many as seven registered sale deeds have also been produced before learned CIT (A). Thus, according to learned counsel for the appellant the amount of Rs.16.79 lakhs should not have been treated as unexplained income of the appellant for the assessment year in question. 4. There is concurrent findings of facts in respect of the first question of law which involves the issue whether there existed an HUF and whether there is joint account of the HUF or not. We find no good reasons to interfere with the concurrent findings of fact on that issue. 5. So far as issues involved in the second question are concerned, no doubt, majority of documents and evidence appear to have been produced belatedly before the CIT (A) but the appellate order discloses that on account of merit in the Patna High Court MA No.159 of 2011 (2) dt.30-04-2012 3 / 4 3 submissions advanced on behalf of the appellant, notice was issued to the Assessing officer under Rule 46A (3) of the Income Tax Rules. Thereafter, the report of the Assessing Officer submitted after examination of sale deeds was taken into account. The learned CIT (A) not only noticed that as per report, since possession of the flats were given on 23.3.2005 i.e. in FY 2005-06 itself, therefore, the amounts received during FY 2004-05 could not be treated as advance, rather they were final sale consideration, rather he also expressed agreement with that view without making any critical appreciation of the report and without examining as to why the money received in the earlier financial year 2004-05 could not be treated as advance or part of consideration amount when the possession was given in Financial Year 2005-06. 6. The learned Tribunal has also noted the grounds and submissions in relation to the aforesaid question of law but in paragraph 13 the Tribunal has merely recorded its approval of he order passed by the leaned CIT (A) without making any independent analysis of the materials. 7. By way of illustration, learned counsel for the appellant showed to us from one of the sale deeds in favour of Vidya Devi that it mentions all the details of payments made towards the entire consideration amount of Rs.6.01 lakhs and as per details, major amounts were paid on various dates through demand drafts or cheques whose numbers were mentioned including the name of the Bank. We do not find any consideration of such relevant materials by the concerned authorities for examining the issues analytically in relation to the second question indicated above. 8. In our considered view, the appeal involves substantial Patna High Court MA No.159 of 2011 (2) dt.30-04-2012 4 / 4 4 question as indicated above as to whether materials produced by the appellant by way of explanation for the receipt of Rs.16.79 lakhs have received a fair and proper consideration by the authorities, particularly the CIT (A) and the Tribunal or not. On going through the materials indicated above and the order of the authorities, particularly the order under appeal, we find that the issues involved for deciding a substantial question of law have not been determined by taking into account relevant materials available on record as indicated above. The manner or approach towards relevant materials and their non- consideration clearly renders the findings unacceptable, being contrary to law. 9. In view of aforesaid discussion, the appeal is allowed in part. The relevant issues relating only to second question indicated above are remanded for fresh consideration and determination by the Assessing Officer. The findings of the A.O., the CIT (A) and the Tribunal on these issues are hereby set aside. 10. It goes without saying that the relevant issues as indicated above shall be decided by the Assessing Officer after giving opportunity of hearing to the appellant in accordance with law. sk (Shiva Kirti Singh, J) (Vikash Jain, J) "