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TMI Blog2021 (12) TMI 866X X X X Extracts X X X X X X X X Extracts X X X X ..... issue is arising from single transaction of sale of land property. For the purpose of adjudication, we are taking the facts of the case of Ramnikbhai N Patel (HUF) bearing ITA No. 1338/AHD/2016. 3. The fact goes like this. There were three chunks of land bearing survey nos. 182, 183 & 185 admeasuring 56050 Sq. Meters which were sold by Shri Ramnikbhai N. Patel to the extent of his interest of 1/4th for consideration of Rs. 3.5 crores vide sale deed dated 29th October 2005. In the sale deed, the son, wife, daughter and daughter in-law of Shri Shri Ramnikbhai N. Patel were confirming party as part of third part of the sale deed. Accordingly, all the 5 members of the family of Shri Ramnikbhai N Patel divided sales consideration among themselves in equal proportion of Rs. 70 lakh each and declared long term capital gain of Rs. Nil after claiming indexed cost of acquisition at Rs. 48,74,974/- each and deduction under section 54EC of the Act for Rs. 21,30,000/- each. The returns filed by Shri Ramnikbhai N Patel, his son Shri Chirag R. Patel and daughter Shefali R. Patel were processed and accepted under section 143(1) of the Act. On the contrary, the returns of his wife Smt. Niruben R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 70 lacs in the hands of all the members as income from other sources. 3.4 Simultaneously, based on above letter from ld. CIT (A)-XVI Ahmadabad to CIT-V, Ahmadabad recorded reason to believe that sale consideration of Rs. 3.5 crores on transfer of land is taxable in the hand of Ramnikbhai N Patel HUF. Thus, the notice under section 148 of the Act dated 22-03-2013 was issued in the name of Ramnikbhai N Patel (HUF) for escapement of capital gain on sale of property for Rs. 3.5 crores. During the proceedings under section 147 of the Act, it was submitted that there was no HUF in existence in the name of 'Ramnikbhai N Patel HUF' or assessed any time under the Act. Further it was also contended that the notice under section 148 was without jurisdiction on the reasoning that there was no material on record with AO to form reason to believe for the escapement of income. Thus, the AO in view of the submission of the assessee dropped the proceeding of assessment/reassessment under section 147 of the Act vide order dated 17th February 2014. 3.5 Thereafter, the learned Pr. CIT issued notice under section 263 of the Act alleging that the order of the AO dropping the proceeding under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said Act and section 32 read with section 88E of Bombay Tenancy and Agricultural Land Act 1948 all the tenant of Inam agricultural land became the deemed owner of such the lands. Therefore, after enactment of the Gujarat Devasthan Inam Abolition Act 1969 Shri Ramnikbhai Patel and other heir of Nathalal Patel whose names were recorded as tenant as per entry No. 1290 applied for occupancy right which was granted by the order of Mamlatdar dated 29th March 1989 w.e.f. 15th November 1969. Thus, the land was acquired by Shri Ramnikbhai Patel in his individual capacity and not as property of HUF. Thus, the proceeds from the transfer of such land is taxable as individual property of the Shri Ramnikbhai Patel. Therefore, the finding of the AO that there is no HUF in the case on hand is correct. Further, the AO also dropped the proceeding for the reason that the reason to believe was not proper. Hence, in such circumstances, the order of the learned Pr. CIT setting aside the order of the AO is not sustainable. 4. On the contrary, the learned DR before us vehemently supported the stand of the authorities below by reiterating the findings contained in the respective orders which we have alr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally; (b) Such tenant is not a permanent tenant but cultivates the land leased personally; and 5.4 However, the Inam land of trust and public religious worship places were exempted from the provision of The Bombay Tenancy and Agricultural Land Act 1948 vide section 88B of the said Act which reads as under: [1] [(1) Nothing in foregoing provisions except sections 3, 4B, 8, 9, 9A, 9B, 9C, 10, 10A, 11, 13 and 27 and the provisions of Chapters VI and VIII in so far as the provisions of the said Chapters are applicable to any of the matters referred to in the sections mentioned above shall apply, (a) to lands held or leased by a local authority, or University established by law in the [2] [Bombay area of the State of Maharashtra]; and (b) to lands which are the property of a trust for an educational purpose, [3] [a hospital, Panjarapole, Gaushala] or an institution for public religious worship; 5.5 Admittedly the lands in question were of the religious trust namely Shah Alam Roza Trust. Therefore the provisions of section 32 of the said Act were not applicable on land held by Shri Nathalal as tenant. In other words, on the day of 1st April 1957 Shri Nathabhai was still a tenan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s an ancestral land which was inherited by the assessee from his forefathers. On perusal of the above discussion, we find that there was the tenancy right held by the forefather of the assessee including Shri Nathabhai Patel. The same tenancy right was transferred on the demise of Nathabhai Patel to his legal heirs in their equal proportion i.e. 1/4th to each as discussed above. Thus what was received by Shri Ramnikbhai Patel was the tenancy right that too to the extent of his share of 1/4th which can also be deemed as partition. However, on a later date by virtue of the Gujarat Devasthan Inam Abolition Act 1969 and section 32 read with section 88E of Bombay Tenancy and Agricultural Act 1948 the assessee became the owner of the property which can be evident from the order of the Mamlatdar and Kirshi Panch (supra) where it was held as under: It is hereby resolved that in the above referred agricultural lands bearing Survey Nos.182, 183 and 185 the party tenant is entitled to become owner on the basis of the recognized permanent farmer from date 15/11/69 and it is also resolved that for that they should pay an amount of Rs. 528/- as purchase price in one installment within one year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofar as it is prejudicial to the interests of the revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the revenue. If one of them is absent - if the order of the ITO is erroneous but is not prejudicial to the revenue or if it is not erroneous but is prejudicial to the revenue - recourse cannot be had to section 263(1). 5.12 Thus, in view of the above discussion and following the judgment of the Hon'ble Supreme Court (supra) we set aside the order of the learned Pr. CIT passed under section 263 of the Act. Hence ground of appeal of the assessee is allowed. Coming to the appeal of the Ramnik Bhai Patel in ITA No. 2120/Ahd/2016 6. The assessee has raised the following grounds of appeal: 1. The learned A.O. has erred in reopening the assessment u/s.147. The reopening may be declared bad in law and consequential order passed by the A.O be quashed. 2. The Learned A.O has erred in treating Rs. 70 Lacs as income from other sources. The Learned A.O ought to have appreciated that amount has been received from a relative and so even if it is rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um either under the provisions of section 143(1) or under section 147 of the Act i.e. the entire amount of sale consideration of Rs. 3.50 crores has to be brought to tax in the hands of the assessee. Thus the question arises, whether we can improve the case of the revenue in the appeal before us. The answer stands in negative. It is also for the twin reasons being the Revenue is not aggrieved in the appeal before us and amount of dispute before us is only for Rs. 70 lakh. 7.3 The appeal was filed by the assessee for the limited consideration that the impugned amount of sale consideration of Rs.70 Lacs represents the sale consideration of the property chargeable to tax under the head capital gain and not under the head other sources as alleged by the Revenue. The issue involved in the dispute before us has already been answered in the preceding paragraph. In other words, there was no dispute raised before us qua the sale consideration whether it is Rs. 3.50 crores or Rs. 70 Lacs. Accordingly, we are of the view that we cannot improve the case filed by the assessee before us. In holding so we draw support and guidance from the judgment of Hon'ble Supreme Court MCorp Global (P) Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cultural Lands Act, 1950, the assessee was declared as a protected tenant and ownership rights to the extent of 60 per cent of share in the land by virtue of the above enactment without payment of any consideration and in respect of the remaining 40 per cent share in the land, the ownership rights were conferred upon him by virtue of the A.P. (Telangana) Abolition of Inams Act, 1955 without payment of any consideration and the amount of Rs. 1,272 paid to the RDO in 1983 in terms of section 7(3) was to register the assessee as an occupant of the Inamland as a protected tenant. Therefore, there was no cost of acquisition of the land in dispute and the question of capital gains did not arise for the purpose of income-tax. The revenue authority had wrongly determined the capital gains on the sale of land in dispute without any basis, because there was no cost of acquisition of land in dispute. Hence, no interference was called for in the well-reasoned order passed by the Commissioner (Appeals). 7.6 In the light of the above order of the tribunal, we note that there was no cost incurred by the assessee in the acquisition of the impugned land in dispute. Thus, where no cost was incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of prejudice to the other side will be a relevant factor so the case calls for a more cautious approach but in the latter case no such consideration may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard. The Court has to exercise the discretion on the facts of each case keeping in mind that in construing the expression 'sufficient cause', the principle of advancing substantial justice is of prime importance." (p. 799) 4. The Calcutta High Court in CIT v. Orissa Concrete & Allied Industries Ltd. [2003] 264 ITR 186 held as under : ". . .what is really indicated in the various decisions cited and in section 5 of the Limitation Act itself, is that a litigant would be required to explain why the appeal and/or application could not be filed within the period prescribed by limitation and explain the delay for such period for the purpose of linking up the circumstances which had caused the delay during the period of limitation and thereafter." (p. 192) 5. Recently, the Allahabad High Court in Ganga Sahai Ram Swarup v. ITAT [2004] 271 ITR 512 has taken the view that liberal view ought to have been taken by the authority as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, commonsense and pragmatic manner. (4) When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. (5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 10.5 From the above judgment of the Hon'ble Apex Court, we note that the substantial justice deserves to be preferred rather than deciding the matter on the basis of technical defect. 10.6 We also note that there is no allegation from the Revenue that the appeal was not f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eased to condone delay for 20 years approximately by holding that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. 11.2 The delay in the instant case is just of 377 number of days which cannot be considered to be inordinate or excessive in comparison to the delay of 7330 days approximately. 11.3 In view of the above we are of the opinion that when there is sufficient cause for not filing the appeal within the period of limitation, the delay has to be condoned irrespective of the duration/period of the delay. In this case, the non-filing of an affidavit by the Revenue for opposing the condonation of delay itself is sufficient for condoning the delay of 377 number of days. Thus, we condone the delay of 377 days in filing the appeal and proceed to hear the appeal on merit for the adjudication. 12. Before we take up the issue raised by the different assessee in the appeal, it is pertinent to note the history of the facts involved therein. The sale consideration of the property, as narrated above, of Rs.3.50 crores was divided in equal ratio among the following persons: 1. Shri Ramnikbhai Patel 2. Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing his family members to sub-let the same at a much higher rents. In these circumstances, these findings of fact cannot be interfered with in the present appeals. It has been held by this Court in ITO v Ch. Atchaiah[1996] 218 ITR 239/84 Taxman 630, that the Assessing Authority has a right to tax the "rightperson". Once it is found that the income in fact belongs to the appellant he was the rightperson for taxing the said income, it was permissible for the IncomeTax Authorities to tax the said income at the hands of the assessee. 5. At the same time, we also find that the IncomeTax Authorities have read the same income at the hands of the wife, son and daughter-in-law of the assessee as well who, as per the department itself, "wrong person". There would be double taxation on the same income at the hands of two persons. In these circumstances, it will always be open to the wife, son and daughter-in-law of the assessee to seek redressal of the taxation of income at their hands in appropriate proceedings. 12.4 In view of the above, we are of the opinion that there should not be any addition in the hands of the other assessee, treating the capital gain income under the head other so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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