9911796707
TMI Blog2014 (2) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal of revenue are as stated below:- "On the facts and circumstances of the case the ld CIT(A) has erred in deleting (i) Addition made by the A.O. for Assessment Year 1991-92 and 1994-95 to 2000-01 on account of rent received by Smt Adarsh Kaur Gill (ii) Addition on account of notional income for self occupancy for Assessment Year 1994-95 to 1997-98. In respect to admission of PB filed by Smt Adarsh Kaur and her daughter Nurid Kaur Gill, writ petition No. (C)496/2009) was filed by Smt Surjeet Kaur Gill and Shri GurmeetSingh Gill before the Hon'ble High Court of Delhi, which was disposed of 04/02/2009 directing the Tribunal to first dispose of the objection in respect of admission of PB filed on behalf of Smt Adarsh Kaur and Nuriel Kaur Gill. The Tribunal vide order dated 23rd December 2009 admitted the PB on record citing that there was no additional evidence and as a matter of fact were all records and orders which were already in public domain and in the records of the department. The ground of appeal raised by the intervener appellant in ITA No. 3124/Del/2004 legal heirs Mrs. Surjit Kaur Gill and and Gurnir Singh Gill are (i) That the order of Ld CIT(A)-XVII is wron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modify any of the grounds raised or to withdraw or file any additional ground prior to or during the hearing." 4. The ground of appeal of Smt Surjeet Kaur Gill and Shri Gurmeet Singh Gill are as below:- "1. That the order of the Learned Commissioner of Income-Tax (A),-XVII is wrong illegal and against the facts of the case. 2. That the Learned commissioner of Income-tax (Appeals) has erred in reversing the finding of the Assessing Officer and determining Income from 3-South End Road, New Delhi at Rs. 1,500/- per month. 3. That all observations, findings including the finding that the 3 South End Road is let out of Rs. 1,500/- per month, the tenancy continues after the demise of Smt. Abnash etc. or perverse, not based on genuine facts and evidences, based on erroneous facts, mis-presentation, based on surmises and conjectures. 4. That all the adverse findings contrary to the pleading of the Estate Abnash Kaur are wrong preserve invalid, opposed to the evidence etc. 5. That the appellant craves leave to add, to amend or to alter or to substitute or to withdraw any of the grounds of appeal on or before the date of disposal of the appeal." 5. The substantive question and common ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In between on 6th February 1973, Mrs Abinash Kaur drew up a registered will in which the brother of Abinash Kaur, Mr. Ajit Singh was named as the administrator and the executor of the will and named six beneficiaries. Ms. Abinash Kaur died on 10-06-1976 leaving behind six beneficiaries under her registered will dated 06.02.1973, bequeathing 1/6th to each of her six beneficiaries in the property to the following:- (i) Sh. Ajit Singh,(ii) Mrs. Adarsh Kaur Gill, (iii) Ms. Nurian Kaur Gill, (iv) Mrs. Surjeet Kaur Gill, (v) Sh. Gurmeet Singh Gill, (vi) Sh. Kamal Kishore Bindal. The chart given below will show the legal heirs and their relation with Late Smt. Abnash Kaur, to the estate as per the registered Will:- 11. From the records, it is understood that from the inception itself, Income Tax Authorities of Smt. Abnash Kaur did not accept the lease agreement between Smt. Abnash Kaur and Smt. Adarsh Kaur; and when assessing Smt. Abnash Kaur, the ITO used to compute the actual rented income received by Smt. Adarsh Kaur instead of her lease agreed rent of Rs. 500/- (later Rs. 1500/-) from Smt. Adarsh Kaur which she received. The dispute in respect to the ALV travelled to the ITAT and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat on 28.02.1985 Shri Ajit Singh made a declaration u/s 281A of the Income Tax Act, 1961 (herein after „the Act') before the Income Tax Department and stated that Adarsh Kaur is enjoying all the benefits of the estate with a benamidar fake lease deed purportedly entered into by her and Abnash Kaur. Thereafter, we find that in November, 1990, Shri Ajit Singh made another benamidar declaration u/s 281A and also moved a petition u/s 264 of the Act before the Revenue Authorities declaring therein, that the alleged lease between Late Abnash Kaur and Smt. Adarsh kaur was sham transaction and endorsing as correct the revenue's consistent stand regarding the lease deed as a fake one. The administrator/ executor of the will Shri Ajit Singh filed a Suit (Suit No. 2167/1993) in the year 1993 before the Hon'ble High court of Delhi on 16.09.1993, for partition of the estate of Abnash Kaur and for mesne profit to the legal heirs and for declaration that there was no lease deed between Abnash Kaur and Adarsh Kaur. While the said suit of 1993 was pending, the two legal heirs i.e. Ajit Singh and Kamal Kishore Bindal passed away in October 2000 and December 1995 respectively. 15. These appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Late Smt. Abnash Kaur. It further noticed from the details furnished along with the letter dated 21.05.2001 that the property was let out to various parties during the period for last ten year. No return of income, however, for any of these last ten years were filed in the name of Estate of Late Smt. Abnash Kaur with the department. If is further noticed that there was certain contradictions in the submissions made by the legal heirs/ occupiers/ administrators/ executors etc to the Appellate Authorities including ITAT as also to the other Courts. On such matter is still pending before the Hon'ble Delhi High court. Details of such facts are narrated in the letter dated 21.05.2001. In view of the above mentioned facts and since no return of income of the Estate of Late Smt. Abnash Kaur is filed, I have reason to believe that income chargeable to tax have escaped the assessments. Since the status of all four legal heirs/ occupies/ administrators/ executors etc. is not known to this office in the absence of complete details, notices u/s 148 of the Act are being issued from Assessment Year 1991-92 to 2000-01 in the cases of the four existing legal heirs/ administrators/ executors/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even though the said agreement was dated 08.04.1993, since no application on Form No. 34A before registration was not submitted to the IT Department and no application in Form No. 37-I to the appropriate authority was submitted, Revenue launched statutory proceedings u/s 276AB of the Act vide notice dated 26.12.2001. The Assessing Officer noted that the original agreement between Mr. K. K. Bindal and Smt. Adarsh Kaur of 08.04.1993 was not produced before him and also points out that the executor of the Will of Estate of smt. Abnash Kaur has filed an FIR before Tuglak Road Police Station in this regard. 19. In the aforesaid circumstances the Assessing Officer was of the view that the entire demand of the estate being covered under TRO notice being issued to all legal heirs in 1987, the said transaction if executed genuinely shall be held void and voidable u/s 281 of IT Act. And the Assessing Officer held that since the estate has not been distributed it is chargeable to tax u/s 168 of the Act; and since earlier original lease deed of 1958 has not been produced either in the course of assessment proceedings in 1959-60 before the then Assessing Officer nor in the year 2002 before hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf occupied by any of the heirs as legal heirs but is actually in possession of one of the legal heirs on account of the tenancy rights, hence the Assessing Officer was also not justified to assessee any notional income on account of self occupancy. 22. Aggrieved by the said order of the ld CIT(A) the revenue is before us. 23. Before the ld CIT(A) appellants raised identical grounds for all the Assessment Year except Assessment Year 1994-95 to 1997-98 where one additional ground was raised. The common ground was whether the rental income from House No. 3, South End Road, New Delhi is assessable in the hands of the Estate of late Smt. Abnash Kuaur and whether any notional income on account of self occupancy of the said house is also assessable in the hands of the estate. 24. The Counsel appearing for the Revenue submitted that the AO had rightly issued notices for re-opening in this case with the approval of the Add. CIT, to reopen the assessment for a period of 10 years, because it was observed that the escaping income is above Rs.50,000/-, that there happened reduction of tax on account of rent from sub-letting of property assessed in the hands of Smt. Adarsh Kaur as individual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar that she is assessed on Rs. 55,000/- under the head „other sources'. There could not be double taxation of the same Income in the hands of the assessee herein under the head income from house property." 27. For the assessment years 1966-67 and 67-68 for which the income-tax Officer had taken a net ALV @ Rs. 5,000/- per month. In appeal, the Appellant Asstt. Commissioner relied on the decision of the Tribunal for the Assessment Year 1964- 65 and determined the ALV at Rs. 18,000/- instead of Rs. 60,000/- taken by the Income-tax Officer. Department's appeal before the Tribunal was dismissed. 28. For the assessment years 1968-69 to 1970-71 the Income Tax Officer had taken the annual value of the said property at Rs. 60,000/- on the basis of the rent of Rs. 5,000/- per mensem received from the Embassy by the sister of the Smt Abnash Kaur. In appeal, the Appellate Assistant Commissioner determined the ALV at Rs. 18,000/- according to the rent received by the assessee from her sister. The revenue came up in appeal to the Tribunal. The Tribunal following the orders for the earlier years, upheld the order of the Appellate Asstt. Commissioner adopting the annual letting value of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he question as to the correct value of the property is essentially a question of fact. No question of law arises out of it" 31. As noted before, Shri Ajit Singh (brother) who was the executor of the Will, did not move for probate after the death of Smt. Abnash Kaur in 1976. However, we find him giving a declaration u/s 281A in 1985 and alleged about the fake lease deed and then in 1990 also he repeated the allegation and moved an application u/s 264 before the IT Authorities. Thereafter he filed a suit (Suit No. 2167/1993) before the Hon'ble Court of Delhi for partition, rendition of account, declaration that the lease deed between Smt. Abnash Kaur and Smt. Adarsh Kaur is not existing etc. The Hon'ble Single Judge dismissed the interim objection of the Smt. Adarsh Kaur that the reliefs prayed for in the Suit were barred by limitation by an order dated 7.4.2008, and aggrieved by the said rejection of interim objections Smt. Adarsh Kaur preferred an appeal before the Division Bench of the Hon'ble High Court vide, FAO(OS) No. 290/2008 and the same was disposed of by an order dated 27.1.2009. The reliefs sought in the Suit, are as reproduced below: "(A) Pass a preliminary decree of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Abnsh Kaur. (G) Pass a decree of declaration to the effect that defendants Nos. 1 and 2 have dis-entitled themselves, from getting any share in the estate left by Smt. Abnash Kaur and that the plaintiff and defendants No.3, 4 and 5 are the only beneficiaries under the Will of Smt. Abnash Kaur and are entitled to get the entire estate left by Smt. Abansh Kaur divided and partitioned in four equal shares; (H) Pass a decree for permanent injunction against Defendant No.1 restraining her permanently from transferring, alienating, letting out or parting with the possession of the property, 3, South End Road, New Delhi, or any part thereof and from making any additions and alterations in the same in any manner whatsoever. (I) Any relief which this Hon'ble Court may deem fit and proper in the circumstances of the case may also be granted to the plaintiff and other beneficiaries under the Will of Smt. Abnash Kaur." 32. The Hon'ble Division Bench of High Court High Court while partly allowing the said Appeal, stated as follows: "35. The upshot of the aforesaid discussion would be hold that the suit in respect of reliefs (b) to (F) would be time barred. Relief (g) has to go as it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estate left by Smt. Abnash Kaur would again be time barred, keeping in view the provisions of Article 58 of the Limitation Act, which prescribes three years period for seeking such a declaration." 36. We also take note of the fact that an Appeal has been filed before the Hon'ble Supreme Court, vide, SLP (Civil) 6344/2009 against the aforesaid order dated 27.1.2009 passes by the Hon'ble High Court in FAO(OS) No. 290/2008, and Hon'ble Supreme Court was pleased to issue notice of the Appeal and directed listing of the same for final disposal. So we should keep in mind the Hon'ble Division Bench order in respect to the lease deed between Smt. Abnash Kaur and Smt. Adarsh Kaur made in 1961, reproduced in Para 34 above. 37. Coming back to the issue before us; that on 31.5.2001, AO issued notices to reopen the assessment for a period of 10 years, seeking approval of the Addl. CIT, only for the AY 1991-92 to 1996-97, with the reason that the escaping income is above Rs.50,000/-. The ld CIT(A) has held that the re-opening of the assessment as valid and there has been no challenge in this respect before us. 38. This reopening of assessment in the hands of the legal heirs to the Estate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kaur and as per the terms of the agreement Smt. Adarsh Kaur Gill has been subletting the property and enjoying the rent in her individual capacity and the same has been disclosed in her Return and accepted by the department and this has never been controverted by the Assessing Officer. Late Smt. Abnash Kaur in her Will has categorically made mention of the lease agreement dated 18- 11-1958 between her and Smt. Adarsh Kaur Gill relting to property no. 3, South End Road, New Delhi. She has also mentioned the increase the lease rent through a subsequent agreement and she has also categorically stated that the property 3, South End Road is in physical possession of Smt. Adarsh Kaur Gill. She has admitted in her Will that Smt. Adarsh Kaur Gill is her tenant from whom a rent of Rs. 1500/- p.m. was being received. She is also mentioning about the charge of Smt. Adarsh Kaur Gill, the lessee of the house under agreement dated 18-11-1958 vide clause No. 13 created at 50% of the amount spent by her in the renovation of the said house No. 3, South End Road, New Delhi as and when she vacates the premises. The declaration made by late Smt. Abansh Kaur in her Will relating to the agreement dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am transaction merely on the statement of Sh. Ajit Singh who only witnessed the document. The averments made in the statement of Sh. Ajit that there was a codicil to the Will cannot be considered because no such document has been produced before me. 41. With respect to the contention that the alleged lease deed was violative of sec. 17(1)(D) of the Indian Registration Act as it is neither properly stamped nor registered and would be void, the Appellate Authority rightly held that:- "b) Further the Assessing Officer has held that the alleged lease deed was violative of Sec. 17(1)(D) of the Indian Registration Act as it is neither properly stamped nor registered and would be void ineffective and cannot be read as evidence even u/s 269UA(F) of the IT Act, 1961. This conclusion of the Assessing Officer is highly premature because he has not seen the original document and the provisions of Sec. 269UA(F) were not on the statue as the same were inserted only w.e.f. 01.11.1986 by the Finance Act, 1986. It is true that the original lease deed was not produced before the Assessing Officer nor before me but it does not establish that the document was not in existence because the existence o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch has been decided by the Hon'ble Division Bench of the jurisdictional High Court, that it has been hit by limitation and we cannot go into the merits of it. (Para 34 & 35 Supra) 44. However, we would like to address few contentions of the Revenue and ld Counsel for the executor of the Will. The Ld Counsel and Sr. DR has strenuously argued that in view of the fraudulent nature of the transactions involved, therefore, it is incumbent upon this Tribunal to review the factual matrix regarding the Lease Deed in question. In order to buttress the said argument, reliance has also been placed on various pronouncements of the Apex Court. While we are accepting that we are bound by the said pronouncements of the Apex Court, and in fact, there can be no difficulty to accept the proposition that fraud hits at the root of the matter, and hence, even settled matters can be questioned and unsettled, however, in the instant case, we would like to point out that these issues have been settled and resolved by High Court in a series of litigation between the very same parties. Therefore, challenge on the ground of fraud, must necessarily be addressed before the very same forum. It would not at all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the exchequer, whatsoever, and is merely an academic exercise sans any benefit. It is well settled that this sort of adjudication for academic purposes only, cannot be permitted, rather, we are not willing to be persuaded to indulge in such purely academic exercise when judicial institutions at every level, including this Tribunal is seriously burdened with huge backlog of cases. We are in agreement with the finding of the ld CIT(A) that had the rental income been separately assessed in the hand of the estate then the tax payable would be lower than what has been paid by Smt. Adarsh kaur Gill because she has other income also, than the rental income. Therefore, ld CIT(A) has found that there is no reduction of tax on account of rent from sub-letting of property assessed in the hand of Smt. Adarsh Kaur Gill as an individual. 46. Before parting with the case, we would also like to mention that the dispute has a long and chequered history spanning over half a century. Despite courts having tried to resolve the controversy many times, the basic dispute between the parties is coming under challenge again and again, albeit under new and in genuine grounds. Under such circumstances, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
