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2021 (12) TMI 866 - AT - Income TaxRevision u/s 263 - Reopening of assessment u/s 147 - transaction of sale of land property - whether the impugned land was an ancestral land which was inherited by the assessee from his forefathers? - HELD THAT:- Tenancy right was converted into the ownership of the land by virtue of Gujarat Devasthan Inam Abolition Act 1969 and section 32 read with section 88E of Bombay Tenancy and Agricultural Act 1948 which was subsequently confirmed by the order of the Mamlatdar and Krishi Panch - as Shri Remnik bhai Patel who held the property for the 1st time as owner. Thus, it is transpired that there was a change in the character of right in the land as far as tenancy and ownership of the land. From the above fact it is inferred that the land bearing survey Nos. 182, 183 and 185 was acquired by Shri Ramnikbhai N Patel in his individual capacity for his 1/4th interest and not as the family property. As such land was not devolved to him as per section 6 of the Hindu Succession Act 1956 as Mitakshra coparcenary as the same was not the property of his ancestor as they were only the tenant of land and not the owner. Therefore, in our considered view any income arising from the sale of such land is taxable in his individual capacity as he was the owner of the said land. AO dropping the assessment proceeding under section 147 of the Act against the HUF is not prejudicial to the interest of the Revenue as the land in question is not the property of HUF. Hence, the HUF is not liable to capital gain on transfer of such land. Here, it is pertinent to note that in order to set aside the order of the AO u/s 263 it must proved that the order of the AO is erroneous as well as prejudicial to the interest of the Revenue. For sake of understanding if an order of the AO is erroneous but not prejudicial to the interest of the Revenue or vise-versa then power under section 263 of the Act cannot be invoked - we set aside the order of the learned Pr. CIT passed under section 263 of the Act. Hence ground of appeal of the assessee is allowed. Reopening of assessment u/s 147 - amount of capital gain as shown represents the income from other sources - As none of them had any right in the property in their individual capacity as such the property belongs to HUF of Ramnikbhai. So, the income declared by this them under the capital gain is the income from other sources. There is no dispute to the fact that they have shown the income on the sale of the property of which they were not the owners. The revenue is also admitting this fact. As also pertinent to note that we have already given a finding in the previous Paragraph of this order that such property was the personal property of Shri Ramnikbhai Patel and therefore any gain arising in consequence to sale of the property has to be taxed in the hands of Shri Ramnikbhai only. In the light of this fact, if any addition is made in the hands of the other parties either as capital gain or income from other sources, it would lead to the double addition. Under the provisions of law, there is no concept of making the addition to the total income of the assessee twice for the purpose of the tax until and unless such addition falls in the exception categories. Accordingly, we are of the view that all the assessee is not subject to tax on the income which they have offered to tax under the bona fides believe. We are of the opinion that there should not be any addition in the hands of the other assessee, treating the capital gain income under the head other sources. Before parting, it is also important to note that all the assessee have already declared and offered the capital gain taking the sale consideration as ₹70 Lacs which have not been disputed by any of the assessee before us. In other words the learned AR for all the assessee before us agreed not to dispute the income already shown in the income tax return. Accordingly, the status quo with respect to the income by the assessee in the income tax return shall be maintained. Hence the ground of appeal of all the assessee are allowed.
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