9911796707
TMI Blog2022 (8) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... osed off per a common order. 2.1 The background facts of the cases (adopting the figures of Jharna Bhattacharya (JB) as the lead case, with the figures of Seema Bhattacharya (SB) being noted in brackets) in brief are that the JB, along with SB, purchased an immovable property (IP), being land at 62,667 sq. ft. (64,840 sq. ft.) at Bardadedo, Satna, during the year (on 30/01/2009) for Rs. 112.91 lacs, in view of which notice u/s. 148(1) was issued on 21/11/2012. In response, while JB relied on her earlier return declaring income from music classes and knitting/sewing work, on 31/03/2010 at Rs. 67,370, SB returned a capital gain of Rs. 14.09 lacs on the sale of these plots of land at Rs. 47.96 lacs on 10/4/2013, claiming exemption u/s. 54B, i.e., for investment of the sale proceeds in agricultural land, in full, resulting in a net income of Rs. 6,720. The income in both the cases was assessed at the returned income, vide identically worded (except for minor differences) orders u/s. 147 r/w s. 143(3) dated 03/7/2013. In both the cases, the AO regarded the capital gains as assessable in the hands of the assessee, though entitled to exemption u/s. 54F, i.e., for investment of the sale p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), who had since expired (in f.y. 1988-89). The assessee's claim of it being a HUF property was not accepted in view of it being wholly unsubstantiated. The capital gain was accordingly assessed, adopting stamp valuation on the date of transfer (u/s. 50C), as well as on 01/04/1981 (toward cost, u/s. 48). The claim for deduction u/s. 54F was found invalid as the assessee has purchased agricultural land. The claim u/s. 54B was again found ineligible as what has been sold by the assessee/s was not agricultural land, but 44 (45) residential plots. Furthermore, there was a difference between the amount of net consideration of Rs. 34.70 lacs (Rs. 32.88 lacs) and the fresh investment (stated to be out of sale proceeds of the sale of plots) of Rs. 50.92 lacs (Rs. 48.78 lacs), i.e., in excess by Rs. 16.22 lacs (Rs. 15.90 lacs), making for a shortfall at Rs. 32.12 lacs, which remain unexplained. The assessee's explanation of having received Rs. 32 lacs from one, Smt. Madhu Shrivastava, for sale of plots in whose favour though, registration could not be done (reason unspecified), which finally materialised only later (02/03/2015) at Rs. 28 lacs, resulting in the balance Rs. 4 lacs being retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee, also now claiming, i.e., before the CIT(A), that the land sold (capital asset) did not belong to her. How could these issues, on which the assessee is aggrieved by her assessment, then, be a part of the RAO, which only concerns the areas on which the assessment is found deficient or inconsistent, warranting a remedial action. The original assessments (13/07/2013) in both the cases (SB & JB), which were not appealed against, attaining finality, the capital gain on sale of residential plots was brought to assessment, even as deduction u/s. 54F was allowed, and which (i.e., the said deduction) is the subject matter of the revenue audit objection. We, therefore, find no substance in the argument raised by Shri Usrethe, which is, under circumstances, misconceived. If anything, it points to the need for construing the provision of clause 10(c) (of BI 03/2018) holistically and meaningfully, rather than in a parochial manner inasmuch as the issue/s raised are often intertwined and the principal object of the provision, i.e., clause 10(c), is to save appeals arising qua assessments made pursuant to the audit objection so that a ground-wise dissection is not consistent with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ily was living jointly, i.e., as a family. There is in fact no reference to any other property in the document, and also nothing to show that it was the only property held by the family. There is in fact no whisper of the Hindu Undivided Family (HUF) (or even family) in the said partition deed. There is again nothing to show that the income from the said property (or any other income) was being returned as family income, i.e., either of the larger family, or even the smaller families of the two sons, i.e., post partition. Even as observed during hearing, there is no order u/s. 171 of the Act, only whereupon the said partition could be given cognizance to under the Act. Reference in this context be profitably made to the decision in Kapurchand Shrimal vs CIT [1981] 131 ITR 451 (SC), whereby the Apex Court clarified that the AO is bound to hold an enquiry into the partition of the HUF, recording a finding thereon, i.e., on a claim of partition being made. There is nothing to show of any procedure in its respect having been followed, and at any stage; nay, of the property or income therefrom being returned as family property, either before or after the partition, which in that case wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the transfer, and which would itself bear out the owner of the property, as well as the status in which the assessees, where so, had executed the sale deed. As afore-stated, the property is, as we see it, the individual property of the two brothers, S1 & S2. This also explains as to why SB, the widow and legal heir of S1, executed the sale deed and, accordingly, returned the capital gain per her return, and also why, JB, despite notice u/s. 148(1) to her, did not. The assessee's claim in this respect is accordingly dismissed. 5.2 We, next, consider the merits of the claims for deduction u/ss. 54B & 54F. As regards the claim u/s.54-B, the same has been denied on the ground that the capital asset sold a residential plot/s and not agricultural land. The same is undisputed; the assessee having sold 19 (18) residential plots to various persons, the list of which forms part of the assessment order dated 03/07/2013. That is, an admitted fact, to the legal implicatons of which we shall revert later. As regards the claim u/s. 54-F, the same is again not admissible inasmuch as what has been purchased is not a residential plot, but agricultural land, and which also explains the claim for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... back to the file of the AO to compute the 'capital gain' and 'business income', where and to the extent assessable. We are conscious that this is not the case of either party before us. So, however, it is the correct legal position that is relevant, and not the view that the parties may take of their rights in the matter: CIT v. C. Parakh & Co. (India) Ltd. [1956] 29 ITR 661 (SC) (also see: Kedarnath Jute Mfg. Co. Ltd. v. CIT [1971] 82 ITR 363 (SC)). 5.4 We, next, consider the second addition made by the AO. Relief stands allowed by the ld. CIT(A) on the basis that (plots of) land sold belonged to the HUF of the husbands of the two assessees, and which has not, for the reasons aforesaid, found our favour. In other words, there has been no adjudication on the merits of the addition by the ld. CIT(A), to whom therefore the matter must ordinarily go back to for the purpose. So, however, for the reasons that follow, we only consider it proper that the matter is restored back to the file of the AO. There has been, firstly, no improvement in her case by the assessee/s before the first appellate authority, i.e., as against before the AO, before whom no case by proving identity, capacity ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
