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M.N. Navale Versus Dy. CWT, Central Circle-2 (2) , Pune and Vica-Versa and M.N. Navale (Bigger HUF) Versus Addl. CWT, Central, Range-2, Pune

2016 (2) TMI 487 - ITAT PUNE

Inclusion of assets in to the the net wealth of the assessee (Individual) - whether assets are belonging to bigger HUF - Commissioner of Wealth Tax (Appeals) further directed the Assessing Officer that in case the Bigger HUF is not able to show the source of funds for acquiring the aforesaid properties, the same should be included in the net wealth of the assessee. - Held that:- There is no infirmity in the order of Commissioner of Wealth Tax (Appeals) in directing the Assessing Officer to make .....

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06/PN/2014 (for assessment year 2006-07) and 07/PN/2014 (for assessment year 2007-08) have been filed by the assessee (Individual) against the order of Commissioner of Wealth Tax (Appeals)-Central, Pune dated 11-03-2014 common for the assessment years 2006-07 and 2007-08. In WTA Nos. 08 to 11/PN/2014 the assessee (Bigger HUF) has filed appeals assailing the order of Commissioner of Wealth Tax (Appeals)-Central, Pune dated 11-03-2014 common for the assessment years 2001-02, 2002-03, 2003-04 and .....

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lued at ₹ 12,05,000/-. b) Residential Bungalow at Navsahyadri Soc. Karve Nagar, Pune - Valued at ₹ 52,76,510/-. c) Farm House at NDA Road, Pune - Valued at ₹ 63,30,000/-. d) Flat at Meera Co-op. Hsg. Society Oshiwara, Jogeshwari (W) Mumbai - Valued at ₹ 25,51,510/-. e) Flat at 392/6, Sion Dvn; Sion (E), Mumbai - 22. Flat 7, 8 and 9 - Valued at ₹ 1,08,30,000/-. f) Cash in hand ₹ 1,25,57,588/-. The Assessing Officer rejected the contentions of the assessee and q .....

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Income Tax decided on 30-03-2012 wherein the existence of the M.N. Navele (Bigger HUF) was accepted by the Tribunal. The Commissioner of Wealth Tax (Appeals) in the light of order of the Tribunal directed the Assessing Officer to exclude the value of the impugned properties from the net wealth of the assessee to the extent of source of funds available with the Bigger HUF for acquiring such properties. The Commissioner of Wealth Tax (Appeals) further directed the Assessing Officer that in case th .....

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established by the HUF is without any merit. All the properties which are subject matter of lis were incorporated in the partition decree awarded by the Civil Court, Pandharpur. As per the partition decree the aforesaid assets are owned by the HUF. The Co-ordinate Bench of the Tribunal in ITA No. 149/PN/2010 (supra) has held that the partition decree is sacrosanct and it cannot be challenged. The Tribunal further held that the partition decree is binding on the Income Tax Authorities to the exte .....

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hat these assets admittedly belongs to HUF, the value of assets over and above agricultural income estimated by the Assessing Officer can only be assessed as undisclosed investment by the HUF and thus should be assessed only in the hands of HUF. The said assets cannot be assessed in the hands of the assessee individual merely because the HUF s claim is found to be inadequate. 3.1 The ld. AR further submitted that the Commissioner of Wealth Tax (Appeals) has not given any reason as to why the ass .....

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submitted that the impugned order is well reasoned and justified. The Commissioner of Wealth Tax (Appeals) has remitted the issue back to the file of Assessing Officer to exclude the value of the properties in dispute from the net wealth of the assessee in the impugned assessment years, subject to the condition that if the properties are not represented by the source of funds in the HUF, they should be assessed in the hands of the assessee. There is no error in giving such directions by the Com .....

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d that all the assets mentioned above are incorporated in the list of assets in the partition decree awarded by the Civil Court, Pandharpur. However, the said partition decree has not been placed before us by either of the sides. The Commissioner of Wealth Tax (Appeals) has remitted the file back to Assessing Officer with the following observations: 16.4 I have given careful consideration to all the relevant facts and the submissions made on behalf of the appellant. Upon perusal of the appellate .....

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longed to M.N. Navale, Bigger HUF. This ascertainment is to be done on the basis of the order in the case of the Hon. Tribunal in the case of M.N. Navale, Bigger HUF. Accordingly, this ground of appeal is disposed of with a direction to the Ld. AO to exclude the value of the impugned properties from the net wealth of the appellant for the year in case the above-mentioned quantification exercise establishes the sources for acquisition of the properties concerned in the hands of the Bigger HUF. On .....

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vale (Bigger HUF) to the extent of matching sources of funds available and the remaining assets, if any in the net wealth of the assessee. The impugned order is reasoned and justified and thus calls for no interference. 6. In the result, WTA Nos. 06 & 07/PN/2014 are dismissed being devoid of merit. WTA Nos. 08 & 11/PN/2014 [M.N. Navale (Bigger HUF)] 7. The only ground raised by the assessee in the appeals is : 1) On the facts and in the circumstances of case the CIT(A) has erred in holdi .....

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t of the available funds only be considered as wealth of appellant and the balance of the net asset/wealth to be excluded from appellant's net wealth. 8. The facts in brief are : The assessee filed the original returns of wealth as well as revised returns of wealth in response to notice u/s. 17 of the Act dated 20-03-20018. Assessment Year Date of Filing of Original Wealth Tax Return Net Wealth Declared Date of filing revised return Net Wealth Declared 2001-02 19.12.2005 1,40,19,900/- 12.11. .....

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tion by furnishing the partition decree awarded by Civil Court, Pandharpur. Shri M.N. Navale also submitted that the HUF owns substantial agricultural lands. 9. The Assessing Officer rejected the contentions of the assessee and raised doubts over the existence of HUF. However, he made assessment in the hands of the assessee (HUF) on protective basis. The assessee carried the matter in appeals before the Commissioner of Wealth Tax (Appeals). The Commissioner of Wealth Tax (Appeals) after placing .....

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e included in the net wealth of M.N. Navale (Individual). The ld. AR submitted that the submissions made by him in respect of WTA Nos. 06 & 07/PN/2014 squarely apply in the present set of appeals as well. The ld. AR pointed out that the Department has accepted the wealth tax returns of the assessee for the assessment year 2004-05, 2005-06 and 2006-07 wherein the impugned assets have been included in the net wealth of the assessee. 10. On the other hand, the ld. DR submitted that search was c .....

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esent set of appeals is the directions given by the Commissioner of Wealth Tax (Appeals) to Assessing Officer to complete the assessment after ascertaining the source of funds for acquiring assets by the HUF. If the source of funds are established and match the assets the assessment should be made on substantive basis in the hands of the HUF otherwise the assets should be included in the net wealth of the assessee. 12. We observe that the Commissioner of Wealth Tax (Appeals) has remanded the fil .....

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