TMI Blog2021 (12) TMI 807X X X X Extracts X X X X X X X X Extracts X X X X ..... so observed from the record that in AY 2006-07, AO accepted the RoI filed by the executors of Late Vrajlal C. Mehta under the PAN of Late Shri Vrajlal C. Mehta. But the assessment order was passed in the name of Shri Anoop V. Mehta as a legal heir of Late Vrajlal C. Mehta. Since the issue was already decided by the Co-ordinate bench and the Executors of the Estate also declared the income and paid the relevant taxes on the same amount which is the subject matter in this appeal. Therefore, we do not see any reason to interfere with the findings of ld. CIT(A). Therefore, we are inclined to dismiss the grounds raised by the Department. - ITA No. 1903/MUM/2020 - - - Dated:- 25-11-2021 - Shri S. Rifaur Rahman (Accountant Member) And Shri Pavan Kumar Gadale (Judicial Member) For the Revenue : Mr. S.N. Kabra, DR For the Assessee : Mr. Vijay Mehta, AR ORDER PER S. RIFAUR RAHMAN, A.M. The present appeal is filed by the Revenue against the order of the Commissioner of Income Tax (Appeals)-51, Mumbai [in short CIT(A) ] for the assessment year 2006-07 dated 04.11.2015 and arises out of assessment completed u/s 143(3) r.w.s. 147 of the Income Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n offered in AY 2006-07 and AY 2007-08. The assessee (Estate of Shri Vrajlal C. Mehta), subsequently revised the return on 26.3.2015 and offered the relevant income in these two years. The AO has accepted the income computed by the assessee but has proceeded to pass the order in the hands of Shri Anoop Mehta as L/H of Late Vrajlal Mehta making an addition of the same amount under section 69A of the Act and not in the hands of the Estate of Late Vrajlal Mehta. He also did not give any credit to taxes paid by the assessee on this amount in AY 2012-13 wherein this income was offered by the assessee earlier and taxes had been duly paid. 3. The assessee made following submissions before the CIT(A) and from the submissions of the assessee, ld. CIT(A) observed as follow: 5. Ground No. 1 of the appeal is against the legality of the re-assessment order wherein the appellant had stated that the order passed by the AO is not correct since the AO has not invoked proper jurisdiction over the Estate of Late Shri Vrajlal C Mehta and has passed the assessment order in the name of Shri Anoop V Mehta in his capacity as Legal Heir of Late Shri V C Mehta. It is claimed that the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xecutors to the Estate which had not devolved on the legal heirs. Outlining the various proceedings in this case and the fact that the Executors did not have any knowledge of the base note and that a copy of the note had only been made available on 16th March, 2015, the Executors elaborated that although the base note was unsigned and unsubstantiated, they were revising the returns of income for AY 2006-07 and AY 2007-08 to offer the income in the year in which it was reflected in the bank account rather than in AY 2012-13 where it had been actually offered. The Executors also requested that the income of AY 2012-13 needed to be modified accordingly and the SA tax paid in that year should be set off against the tax due on this amount. 5.3 In his order, the AO has noted that the assessee has filed his return of income on 5.2.2008 declaring nil income and that the assessee has also filed his revised return of income on 26.3.2015 pursuant to issue of a notice under section 148 of the Act. It is noted that both these returns of income noted by the AO have been filed in the capacity of the Estate of Late Vrajlal Mehta. At para 4 of his order, the AO also observes that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdance with the information in the base note. The assessee submits that the AO passed the assessment order wherein he accepted the income declared by the Estate in the return filed by it but despite the fact that entire compliance was made by the Executor and the return was filed in the name of the Estate and the assessment order u/s 143(3) rws 147 was passed in the name of Mr Anoop Mehta (the legal heir). 5.5 The assessee has claimed that the AO erred in making an erroneous observation that the legal heir claimed beneficial ownership of the HSBC bank account. It is claimed that the legal heir never claimed the beneficial ownership of the said account. The said account belonged to the appellant and hence, it has been offered in his return of income. It is further claimed that as per the will of Late V C Mehta, Mr Anoop Mehta was beneficiary of the residual estate of late Shri V C Mehta. Thus, by execution of the Will, Mr Anoop Mehta was the beneficiary of the money belonging to the residual estate and not direct beneficiary of the alleged HSBC Bank account. 5.6 The assessee has submitted that the orders passed by the AO for AY 2006- 07 and AY 2007-08 were similar and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,86,300/- 3. 2012-13 2,43,20,246/- We would like to clarify that we will stand by our aforesaid disclosure of income we will not be seeking any reduction in the income offered at any stage. We further clarity that we have owned up the balances lying in the above referred bank account and paid the taxes thereon in various assessment years. We would not be claiming any refund of the amount of taxes already paid except for inter-se adjustment of the taxes paid amongst various assessment years. It is noted that a similar letter has also been filed by the assessee for AY 2007-08 during the course of proceedings before ITAT. 4. After analyzing the submissions, ld. CIT(A) held that the order passed by AO in the name of Mr. Anoop Mehta as legal heir is bad-in-law with the following observations: 5.8 The submission made by the assessee has been examined. The main submission made by the appellant is that the said ground is squarely covered by the judgement of the Hon'ble ITAT in the appellant's own case in AY 2007-2008 wherein the Hon'ble TAT has quashe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our view, orders passed by them are not sustainable in law for the reasons discussed above. Accordingly, we quash the orders passed by the tax authorities. 5.9 The contentions of the assessee and the order of the AO have been duly considered. I have gone through the details filed by the assessee as well record available. It is noted that the AO had issued notice u/s 148 in the name of Shri Anoop V. Mehta (Legal heir of late Vrajlal Chandulal Mehta). I have also observed that the return of income as well as all compliances during the course of Assessment Proceedings was made by or under the instructions of the Executors for and on behalf of the Estate of Shri Vrailal C. Mehta. The assessee has further made the AO aware of the entity which is required to be brought to tax with respect to the income under discussion. 5.10 I have also gone through the order of Hon'ble Tribunal for AY 2007-08 in the appellant's own case. The Hon'ble Tribunal has accepted the ground raised by the appellant and passed the order in the name of Estate of Shri Vrajlal C. Mehta. The Hon'ble Tribunal in AY 2007-2008 has quashed the orders passed by the Ld. A.O. as well as order p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Estate of Late Shri Vrajlal C. Mehta (the Estate), with help from professional attorneys, brought back the amounts in the account of the Estate. The Executors offered the said amount to tax while filing return of income of the Estate for AY 2012- 13 being the year when the remittance was received in India. 4. As an explanation for not including these amounts in his own return of income, Mr. Anoop Mehta filed letter dated 19.01.2012 contending that although he was the legal heir, the Estate had not yet devolved upon him and hence, the amount was taxable in the hands of the Estate and offered accordingly. 5. Subsequently on 31.03.2014, notice under Section 148 for AY 2007-08 was issued on Mr. Anoop Mehta in his capacity as legal heir of Late Shri Vrajlal C. Mehta by the Ld. Assessing Officer (Ld. A0). Mr. Anoop Mehta informed the executors of such notice and requested them to undertake appropriate action as they were in charge of the Estate. Since the executors had no information with regard to the movement of balances in the HSBC bank account, they did not reflect any additional income on this account in the Return of Income for AY 2007-08 filed on April 9th, 2014. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order us 143(3) r.w.s 147 of the Act was passed in the name of Mr. Anoop Mehta (the legal heir). 12. Further, the Ld. AO made an erroneous observation stating that the legal heir claimed the beneficial ownership of the HSBC Bank account and also got the balance remitted in India but could not obtain copy of the bank account. In relation to the same, it is submitted that the legal heir never claimed the beneficial ownership of the said account. 13. At this juncture, we would like to highlight that in the case of the appellant for AY 2007-08 wherein the facts of the case are similar to the case under consideration, the Hon ble Mumbai ITAT vide their order dated 29.08.2018 (ITA No. 4252 /Mum/2017) observed that the AO did not assume correct jurisdiction and that the AO had assessed the wrong person. The ITAT held that it was the Estate of Late Vrajlal Mehta who was liable to be assessed in respect of the HSBC income and not Mr. Anoop Mehta in his capacity as legal heir. The relevant portion of the Hon ble ITAT Order in AY 2007-2008 is reproduced hereunder for your ready reference: 46. In view of the foregoing discussions, we find merit in the content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quashed, the return of income as well as revised returns of income filed by the Estate shall remain intact. Hence, there will be no change in the income and the tax paid thereon (along with the credits claim) of the appellant as filed in the return pursuant to the notice issued under section 148 of the Act. 18. Accordingly, it is evident from the above, that the taxes on the income offered have already been paid by the appellant fully in AY 2012-13 and have been offered as income later by way of revised returns in AYs 2007-08 and 2012-13 and return u/s. 148 in AY 2006-07 in their correct proportions whereby the respective credit of taxes has been claimed. Therefore, there is no loss to the revenue with respect to the income sought to be taxed. 19. In view of the above submissions, it is humbly requested that the order passed by the Ld. CIT(A) may kindly be upheld 8. Considered the rival submission and perused the material on record. We noticed that during the search operation information relating to the HSBC bank account was brought to the notice of Mr. Anoop Mehta, who is one of the legal heir of Late Vrajlal C. Mehta. Mr. Anoop acknowledges the information br ..... X X X X Extracts X X X X X X X X Extracts X X X X
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