TMI Blog2004 (4) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... to Mr. Kaushik Chheda was valid transfer since the property all along actually belonged to Mr. Kaushik Chheda." 3. Brief facts of this case are that the assessee filed its return of income for the assessment year on 12-11-1992 declaring income at Rs. 12,350. This case was selected for scrutiny. The Assessing Officer issued notices under sections 143(2) and 142(1). The assessee was asked to produce the books of account. The assessee failed to produce the same before the Assessing Officer. During the course of assessment proceedings, the Assessing Officer found that the land acquired by the assessee has not been reflected in the balance sheet for the assessment years 1990-91 to 1993-94. On being enquired about the discrepancy by the Assessing Officer, the assessee contended that the said land has been acquired by the brother of the assessee, Shri Nemchand V. Chheda, through his proprietary concern, Jain Sugar Company for a consideration of Rs. 6,14,900. This had been disclosed by him in his wealth tax returns filed year after year. On 15-4-1993, i.e., relevant to the assessment year 1994-95, Shri Nemchand V. Chheda had executed a deed of assignment in favour of the assessee. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessment year 1993-94, the Assessing Officer framed the assessment under section 143(3), wherein, after enclosing therewith the assessment order for the assessment year 1992-93, he made the addition of Rs. 16,17,710 being profit from construction. The Assessing Officer in the assessment order has mentioned that he has discussed the reasons for making the addition in the assessment order for the assessment year 1992-93 and which is part of the assessment order for the assessment year 1993-94. 6. Against the addition of Rs. 16,17,710 made by the Assessing Officer, the assessee preferred an appeal before the ld. CIT(A) and the CIT(A) in his order for the assessment year 1993-94 held that M/s. Jain Sugar Co. was not a proprietary concern of Shri Nemchand, the brother of the assessee during the relevant period. The ld. CIT(A) also held that it is not a case of signing on application made to CIDCO by the assessee, by mistake, as the representative of the assessee made the CIT(A)-XXVII to believe. The ld. CIT(A) in the assessment year 1993-94 took the view that documents filed along with the return by the assessee for the assessment year 1994-95, prove beyond doubt that M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 1992-93. These wealth-tax returns are appearing at pages 39 to 46 of the paper book. The ld. counsel for the assessee submitted that the brother of the assessee. Sh. Nemchand Chheda filed the wealth-tax returns on 21-10-1991, wherein, he has declared capital balance with Jain Sugar Co. amounting to Rs. 6,14,900. The land in question which is the subject-matter of dispute is duly reflected by Shri Nemchand Chheda in his wealth-tax returns in his proprietorship concern namely, Jain Sugar Co. Similar is the position for the assessment year 1992-93 and wealth-tax returns for this year was filed on 17-11-1992, wherein also, the assessee has duly reflected the capital balance with Jain Sugar Co. The ld. counsel for the assessee submitted that it is pertinent to note that only assets owned by Jain Sugar Co. is the land in question, which belongs to the brother of the assessee and not the assessee which is evident from the Wealth Tax Return filed by brother of the assessee. 9. Explaining the concept of Benami vs. Real owner, the Counsel of the assessee submitted that the income from house property is chargeable to tax in the hands of the owner of the property. In the case of benami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the meaning of section 2( 47 ) of the Income-tax Act, 1961. The transaction of assignment even attract tax under the head Capital gain within the meaning of section 45 of the Income-tax Act, 1961 payable by Shri Nemchand V. Chheda. Accordingly, the assignor Shri Nemchand Chheda himself offered capital gains, arising on transfer of capital asset in terms of the assignment deed referred to above (as executed between the Nemchand V. Chheda as assignor and Kaushik V. Chheda as assignee) for taxation in the return filed by him voluntarily for the assessment year 1994-95. In the said return, working of capital gain arising on transfer of plot of land from Shri Nemchand Chheda to the assessee was given in the following manner : Shri Nemchand Chheda Taking of long-term capital gain/loss for the year ended as on 31st March, 1994 Rs. Rs. I. On sale of Jewellery Sales price of 227.200 gms. 74,976 Less : Cost as on 1-4-1981 37,942 Indexed cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uing his arguments, the counsel of the assessee submitted that without prejudice to the above, the issue stands fully covered by the decision of the Apex Court in the case of CIT v. Podar Cement (P.) Ltd. 226 ITR 625 1 , wherein meaning of the term "ownership" in the context of house property was defined by the court in the following manner : "We are conscious of the settled position that under the common law, owner means a person who has got valid title legally conveyed to him after complying with the requirements of law such as the Transfer of Property Act, Registration Act, etc. But in the context of section 22 of the Income-tax Act, having regard to the ground realities and further having regard to the object of the Income-tax Act, namely, to tax the income we are of the view owner is a person who is entitled to receive income from the property in his own right." 15. The counsel of the assessee submitted that the ld. CIT(A) in his order for the assessment year 1992-93, after appreciating the conspicuous facts of the case came to the conclusion that vide agreement dated 19-4-1993, the land in question was assigned to the assessee. The ld. CIT(A) also stated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment and consideration of said grounds is necessary for the cause of substantial judice. Regarding admissibility of the additional grounds, reliance is also placed on the following decisions : ( a )The Hon ble Supreme Court in the case of National Thermal Power Corpn. v. CIT [1998] 229 ITR 383, ( b ) CIT v. D.S. Screen (P.) Ltd. [2001] 248 ITR 633 (Bom.). 19. Having heard both the sides, we have carefully gone through the orders of authorities below. Rival submissions were also considered. It appears that plot in question was purchased by brother of the assessee in his proprietary concern namely "Jain Sugar Co." Investment in the plot was made by brother of the assessee and duly reflected by him in his Wealth-tax return for assessment years 1992-93 and 1993-94. In this context, it is pertinent to note that return of wealth for assessment year 1991-92 was filed by brother of the assessee on 21-10-1991 wherein brother of the assessee duly reflected the capital balance with Jain Sugar Co. and for the assessment year 1992-93, brother of the assessee filed the return of income on 17-11-1992 wherein also the capital balance with Jain Sugar Co. has been duly reflected. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same in the assessment years 1992-93 and 1993-94. From the perusal of order of ld. CIT(A) for the assessment year 1993-94, we found that ld. CIT(A) has declined to follow the order of ld. CIT(A) for the assessment year 1992-93 on doubts and suspicion, ignoring the factual aspect that assessee, for the assessment years under appeal, was not the real owner and he became real owner only on 18-4-1993 when the Deed of Assignment by his brother was executed in favour of the assessee. We, therefore, hold that profit, if any, is rightly assessable in case of assessee in the assessment year 1994-95, on Project Completion basis as declared by the assessee in the return of income for the assessment year 1994-95. We, therefore, delete the addition of Rs. 16,73,710 made by the Assessing Officer for the assessment year 1993-94. 22. Regarding the additional grounds of appeal, we are of the view that these need no adjudication in view of our decision on various grounds originally raised by assessee in his appeal pertaining to assessment year 1993-94. The additional grounds raised, therefore, rendered infructuous and the same are dismissed. 23. In the result, for statistical purposes, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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