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Shri. Deen Dayal Kothari Versus The Income Tax Officer, Business Ward VIII (3) , Chennai

2017 (3) TMI 259 - ITAT CHENNAI

Reopening of assessment - assessment completed in the status of individual though return originally filed in the status of HUF - Held that:- Once AO reached a opinion that assessment was to be done only in the status of ‘individual’ and not in the status of ‘HUF’, he was bound to issue a notice to the assessee in his individual status. An ‘individual’ and an ‘HUF’ are different persons under the Income Tax Act, and notice to one cannot be deemed as notice to the other. Section 2(31) clearly brin .....

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d by the assessee before ld. Assessing Officer, it being a pure question of low with all relevant facts on record, it is of the opinion that Tribunal can consider it, though raised first time before it. Therefore have no hesitation to set aside the assessment done on assessee on impugned assessment year. - Decided in favour of assessee - I.T.A. No. 1667/Mds/2016 - Dated:- 3-3-2017 - SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER For The Appellant : Shri.D. Anand, Advocate For The Respondent : Shri. R .....

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essment year in a status of HUF disclosing income of C1,82,089/-. Ld. Assessing Officer was having information regarding purchase of 2.89 acres of land by the assessee alongwith four other persons, from one Smt. K. Sathya on 21.05.2007. In the return of income filed by the assessee in the HUF status the investment in the above property was not disclosed. Hence notice u/s.148 of the Income Tax Act, 1961 (in short the Act ) was issued to the assessee. Thereupon assessee requested the ld. Assessing .....

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nd Area Sales Price Amount 1 S.No.146/4A, Nemili Village, Sriperumpudur 2.89 acres C60,04,000/- (Cheque No.5,04,000/- + Cash C55,00,000/-) 2 S.No.146/4B, Nemili Village, Sriperumpudur 4.03 acres C83,72,325/- (Cheque No.7,02,800/- + Cash C76,69,525/-) 4. Thereafter on 04.02.2013, assessee appeared before ld. Assessing Officer and a sworn statement was recorded. In such sworn statement he admitted that the purchase was made in his individual status though PA No. of HUF was given for registration o .....

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assessee and Smt. K. Sathya before him. Ld. Assessing Officer also referred to an assessment done on one Shri. Dilli Raja, who was the mediator for the purchase of the above property. Shri. Dilli Raja it seems had admitted that cash of C55,00,000/- pertaining to the first of the two properties was held by him in the safe custody and later transferred to the seller and her daughters. Though the assessee argued before ld. Assessing Officer that receipt of C55,00,000/- alone was acknowledged by Sm .....

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h share of assessee) C12,00,800 But offered by assessee in his return (C12,60,040 X 1/5) C2,52,000 Balance 9,48,800 Add Stamp duty (100808 X 1/5) 20,162 Total amount not disclosed by Assessee 9,68,962/- Actual purchase price 83,72,325 (1/5th share of assessee) C16,74,465 But offered by assessee in his return (C17,57,080 X 1/5) C3,51,416 Balance 13,23,049 Add Stamp duty (140568 X 1/5) 28,114 Total amount not disclosed by Assessee 13,51,163 Total amount not disclosed by the assessee C9,68,962/- + .....

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t one was also sold by Smt. K. Satya for a sum of C83,72,325/- though actual amount shown in the registered deed was only C17,57,080/-. Ld. Commissioner of Income Tax (Appeals) noted that Shri. K.Dilli Raja who was the mediator had admitted payment of on-money. As per the ld. Commissioner of Income Tax (Appeals), Ld. Assessing Officer had successfully discharged his burden of proof by issuing summons to Smt. K. Sathya who had accepted receipt of on-money. He confirmed the additions made by the l .....

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ng being done u/s.143(3) r.w.s. 147 of the Act, as per ld. Authorised Representative notice issue of notice u/s.148 of the Act was mandatory. As per the ld. Authorised Representative even the notice u/s.143(2) of the Act was issued to the assessee only in HUF status. Thus, according to him assessment in the HUF status of the assessee was bad in law. Ld. Authorised Representative placed reliance on the third member decision of the Delhi Bench of the Tribunal in the case of Suraj Mal, HUF vs. ITO .....

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ed u/s.143(3) r.w.s.147 of the Act is very relevant and these are reproduced hereunder:- The assessee filed his return of income for the A.Y.200S- 09 in HUF status on 21.08.2008 declaring a total income of Rs..1,82,089/- The same was processed u/s 143(1). Information was received from the Incometax Officer, Ward I(1), Kanchipuram vide letter dt 04.02.2011 about the purchase of a land located at Survey No.146/4A, Nemili A Village, Sriperumpudur measuring to 2.89 acres by the assessee alongwith 4 .....

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ter stating that the return already filed may be treated as the return filed in response to the notice u/s.148 . The properties purchased by the assessee as per ld. Assessing Officer, was not disclosed in the return filed by the assessee in HUF status. It was only when assessee was examined by the ld. Assessing Officer on 04.02.2013, the ld. Assessing Officer recognized that properties were acquired by the assessee in his individual status and not in the HUF status. Relevant para of the assessme .....

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s disclosed the above purchase of property for an amount of C6,03,400/- (C2,52,000/- and C3,51,416/-) being 1/5th share. Hence, the assessment is being completed in assessee s individual status. What transpires from the above is that return though originally filed in the status of HUF, the assessment was finally completed in the status of individual. Both the notice u/s.148 of the Act which was issued on 07.07.2011 and notice u/s.143(2) of the Act which was issued on 10.10.2012 were much prior t .....

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UF(supra). In the said case, the original return was filed in the status of individual but final assessment was completed in the status of HUF. What was held by the Bench at para 16 of the order is very relevant, and this is reproduced hereunder:- 16. In the case of AAC vs. Late B. Appaiah Naidu 1974 CTR (SC) 147: (1972) 84 ITR 259(SC), their Lordships held as under : "Now coming to the second question as noticed earlier, the assessment was made in respect of the income of Appaiah Naidu on .....

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