TMI Blog2022 (3) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... s and admitted by the AO that the property was ancestral property. AO and the CIT appeal has been silent as to how many heirs of first degree how the land was divided among legal years in absence of any will, agreement and decree to decide the status of the person in the case of the appellant. The question of status granted by CIT appeal to Sh Baldev Singh (Individual) was whether incorrect and capital gains need to be taxed under the status of Baldev Singh HUF remain undecided on merits as Sh Baldev Singh had withdrawal its appeal to buy peace of mind and avoid litigation and accordingly, the appeal of the assessee was dismissed by Hon ble ITAT, Amritsar vide order dated 20-|0-2016 as dismissed withdrawn cann t be said to have attained finality. Thus, the learning said appeal was factually wrong in observing so, and in our view such reopening of the assessment on the same material facts amounts to change of opinion by the AO where in the first instance he has reopened the assessment of the appellant in the status of HUF and in the second instance in the status of individual by the change of opinion which is not permitted in the eyes of law. Thus we hold that in the present c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssets. It was only inherited property. Thus there was no justification in treating the property belonging to Individual. As such the assessment order is bad in law and is liable to be cancelled. As such, the order of the worthy CIT(A) therein confirming the order of the AO is bad in law and is liable to be cancelled. 6. That there was no capital gain which was subject to tax. As such the assessment made on total income of ₹ 3580540/- is liable to be cancelled. 7. That all the evidences were produced before the authorities below and all these facts are duly incorporated in the shape of affidavit which were summarily rejected by the authorities below. The authorities below did not appreciate that the assessee was clearly entitled for the deduction u/s 54F. It may be submitted that the worthy CIT(A) did not appreciate that the photostat copy of the house was duly filed on which the amount of ₹ 15,53,946/- was spent and in support of this copy of valuation report of the approved valuer and affidavit were duly filed. All these facts have been ignored by the authorities below while not allowing the deduction as claimed u/s 54F. The AO before rejecting the claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since the income on account of long term capital gain for A Y 2009-10 had exceeded the maximum amount which is chargeable to tax, the assessee was liable to file his return of income for AY 2009-10 u/s 139(1) of the Act but as per office record the assessee had not filed his return of income for A Y 2009-10. Accordingly, the CIT(A) observed that the AO rightly had prima facie reason to believe that long term capital gain of ₹ 34,36, 175/- on sale of agriculture land had escaped assessment. He has stated that at the time of reopening the assessment u/s 147 of the Act, the AO is required to have prima facie belief of income escaping assessment on the basis of material before him which was there before the AO in the present case. Therefore, the AO was justified in reopening of assessment: u/s 147 of the Act which is upheld. 6. The Ld. Counsel submitted that this case was reopened by the department vide notice u/s 148 dated 21/03/2014 in the HUF status (APB, Pg. 79); that the reasons was recorded in the status of HUF but the assessment u/s 147/144 was completed in the status of Individual on an income of ₹ 35, 80,540/- by the AO on 27/02/2015. Since the assessment was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded for initiating proceedings u/s 147. It has further been found that notice u/s 148 and other notices issued u/s 143(2) 142(1) were also issued to the appellant by presuming his status as HUF with PAN ABTPS3245H. Therefore once a notice u/s 148 other sections were issued by treating the assessee as HUF then the AO could not have framed the assessment by treating the same income in the hands of Individual with PAN DEYPS5701H. Accordingly by placing reliance on the decision of Hon ble Punjab Haryana High Court in the case of CIT vs. Rohtas Singh the impugned assessment order passed by the AO u/s 144/147 dated 27/02/2015 in the status of Sh. Kewal Singh (Ind) is invalid. [Refer Page No.87] Now again under the similar circumstances, the ITO Ward 4(3) Amritsar has assessed the same amount of Long Term Capital Gain of ₹ 38,80,540/- in the hands of Shri Kewal Singh (Ind) vide order u/s 147 r.w.s. 143(3) dated 16/12/2016. At the time of assessment apart from above narrated facts it was again submitted that this very property belongs to HUF and claiming exemption u/s 54F. As the case of Sh. Baldev Singh S/o Sh. Sardool Singh for the AY 2009- 10 has been dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further argued that the AO can t be allowed to changes you on the similar facts and circumstances of the case, once the proceedings have been cancelled by the landed CIT appeal. 9. We have observed that on the similar facts and circumstances, earlier the notice u/s 148 dated 21/03/2014 was issued in the case of Shri Kewal Singh (HUF). [APB, Pg. 79] with the reasons recorded were similar in verbalism except personas evident from reasons in the case of Shri Kewal Singh [HUF] and individual (APB, Pg. 80 and APB, Pg. 56 respectively) of the paper-book for the same amount of Long Term Capital Gain amounting to ₹ 34,36,175/- from sale of inherited agricultural land. 10. The assessment in the case of Shri Kewal Singh (Individual) was completed on 27/02/2015 and addition of ₹ 35,80,540/- was made under the head Long Term Capital Gain. (APB, Pg.71 to 78) where reason were recorded in the case of Shri Kewal Singh (HUF) . The assessee went in appeal before Ld. CIT(A) against the said order of ITO, Ward 4(2) Amritsar dated 27/02/2015,who vide his order dated 29/03/2016 in Appeal No.30/2014-15 has allowed the appeal of the assessee by observing as under (APB, Pg. 81 to 88 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplanation to the section which defines partition as under: Explanation .- In this section,- 'partition' means- where the property admits of a physical division, a physical division of the property, but a physical division of the income without a physical division of the property producing the income shall not be deemed to be a partition; or where the property does not admit of a physical division, then such division as the property admits of, but a mere severance of status shall not be deemed to be a partition. where the property does not admit of a physical division, then such division as the property admits of, but a mere severance of status shall not be deemed to be a partition. 38 . The Apex Court was of the opinion that sub-section (6) of Section 171 thus, for the first time, imposed a kind of joint and several liability on the members of Hindu Undivided family and thus personal liability as distinguished from the liability of a joint family property received on partition. 38A . Under the Hindu law, members of a joint family may agree to partition of the joint family property by private settlement, agreement, arbitration or through court's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition for the purposes of assessment it is not permissible to ignore the special meaning assigned to partition under the explanation, even if the partition is effected through a decree of the court. Ordinarily decree of a civil court in a partition suit is good evidence in proof of partition but under section 171 a legal fiction has been introduced according to which a preliminary decree of partition is not enough. Instead there should be actual physical division of the property pursuant to final decree, by metes and bounds. The legislature has assigned special meaning to the expression partition under the aforesaid Explanation with a view to safeguard the interest of the revenue. Any assessee claiming partition of HUF must prove the disruption of the status of HUF in accordance with the provisions of Section 171 having special regard to the Explanation . The assessee must prove that a partition effected by agreement or through court's decree, was followed by actual physical division of the property. In the absence of such proof partition is not sufficient to disrupt the status Hindu Undivided Family for the purpose of assessment of tax. 39 . A reading of sub-section 171 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of CIT vs. Rohtas Singh (APB, pg.87). 15. The Ld. AR contended that once the proceedings have been cancelled by CIT(A), there was no justification on the part of the AO to restart the proceedings without ascertaining the station of the appellant assessee by enquiries and bringing material on record. Thus, the department failed to apply its mind and have blow hot cold in the same breath. 16. From the above, it is evident that the subject land property was ancestral property and therefore the capital gains is required to be assessed in the hands of Shri Kewal Singh HUF as observed by Leonard CIT appeal in the earlier proceedings where case was reopened in the hands of HUF whereas assessment was completed in the hands of individual and so it was held invalid. The facts that share of long-term capital gain in the case of Shri Beldev Singh one of the brother of the assessee was assessed and confirmed in individual status cannot be a basis for again reopening the case of the appellant in individual status on the same facts. The finding of the learned CIT appeal, ignoring the affidavit filed by the assessee proving that the property belongs to HUF with the support ..... X X X X Extracts X X X X X X X X Extracts X X X X
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