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TMI Blog2017 (6) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant's case. 2.1 The learned CIT[A] to have taken into account the position under Hindu Law that the property can be in the name of any one of the members of the family and therefore, the income is liable for assessment in the hands of the family of which the appellant is a member and the addition made requires to be deleted. 2.2 The learned CIT[A] ought to have appreciated that the decisions of the Hon'ble Supreme Court in the cases of BIHARILAL JAISWAL reported in 217 ITR 746 [SC] and RANGILA RAM reported in 254 ITR 230 [SC] have no application to the facts of the appellant's case as the benefit of the license was not transferred to any person in violation of the state excise laws and therefore, the ratio of the aforesaid judgements have no application to the facts of the appellant's case and consequently, the income of the HUF that has been assessed in the hands of the appellant requires to be vacated. 3. The learned CIT[A] is not justified in sustaining the GP addition of Rs. 3,89,729/- under the facts and in the circumstances of the appellant's case. 4. The learned CIT [A] is not justified in upholding the addition of Rs. 66,960 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noticed that the income from liquor business standing in the name of M/s. Pisale Wines admitted in the hand of HUF should have been shown as individual income of the assessee. Accordingly, in view of the decision of Hon'ble Supreme Court in the case of Biharilal Jaiswal Vs. CIT 217 ITR 746 (SC) as well as in the case of CIT Vs. Rangila Ram & Others 254 ITR 230 (SC), the Assessing Officer held that the income arising from the liquor trading offered in the hands of HUF requires to be clubbed in the hand of individual and accordingly assessed. The assessee challenged the action of the Assessing Officer before the CIT (Appeals) but could not succeed. 5. Before the Tribunal, the learned Authorized Representative of the assessee has reiterated its contention as raised before the authorities below. The submissions of the assessee has been reproduced by the Assessing Officer in para 5.1 as under : 5.1 2 In the afore said notice your Honour has called upon me to show cause as to why the income belonging to my Hindu Undivided Family of which I am the delacto karttha or representing member of the family in the shape at proprietor of the business carried on under the name and style of M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lrer 8- Co., though not cited by your Honour. it is submitted that they were in connection with the transfer oi the license under Excise Law. The Excise Law prohibits any transfer without the consent oi the Government and the Transferring such incense to a firm constituted to carry on the business is In violation oi the provisions of the Excise Law and such a firm so formed is not entitled to the benefits oi registration under the income-tax Act as the firm then would be one termed In violation oi the law end it is Illegal. The illegal firm could not be granted the registration. in our case. there has been a transfer from one member oi the joint family of Sri PG Govindeswanry. my husband to my name and as between me and my sons. Who are the other co-paceners oi the joint family. This business of the family was not divided and It continued to be the business of our joint family and i am accountable under Law and intact the HOP is the beneficial owner and I am. only a nominee intact under the tenets of the Hindu Lew. it is the property of the family and not my own. it is submitted that there was no partition allotting the said business to me exclusively to consider that the license h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material on record, it is noted that the assessee was allocated these licenses by the Excise Department by virtue of the law of succession on demise of her husband. The other family members of the assessee gave the consent for transfers of the licenses from the name of the deceased husband to the name of the assessee. It is also undisputed fact that during his lifetime Shri P. V. Govindaswamy was assessed to tax in two statuses i.e. individual being proprietor as well as HUF being Karta of HUF. Thus on the death of the husband of assessee, the assessee acquired these licenses as a successor and legal heir of Sri P.V. Govindaswamy. The status of P.V. Govindaswamy was not disputed being Karta of HUF then there is no impediment in succession of the assessee as a Karta of HUF. The authorities below are relied upon the decisions of Hon'ble Supreme Court in the case of Biharilal Jaiswal Vs. CIT (supra) as well as CIT Vs. Rangila Ram & Others (supra) wherein the Hon'ble Supreme Court has held that a license issued in the name of individual cannot be transferred to a partnership firm and therefore the income from business of liquor has to be assessed in the hand of the individual w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not camouflaged to contravene the law. Therefore the appellate authority as well as the Tribunal were justified in holding that the aforesaid judgments of the Apex Court has no application to the facts of this case. It is a case of genuine partnership carrying on business in liquor after obtaining licence in the name of one of the partners, treating the said licence as partnership asset. No transfer is involved." 8. Similarly in the case on hand when no transfer of license by the holder of the licensee is involved then the decisions of Hon'ble Supreme Court as relied upon by the authorities below are not applicable in the case of the assessee. In view of the above discussion, the orders of the authorities below qua this issue are set aside and the claim of the assessee is allowed to the extent that the income offered in the hand of the HUF cannot be assessed in the hand of the individual-assessee. 9. Ground No.3 is regarding Gross Profit (GP) addition. The Assessing Officer noted that the assessee has declared very low GP in comparison to the GP worked out at 17.11% on the data made available by M/s. Karnatka State Beverages Corporation Limited (KSBCL). The assessee challe ..... 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