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TMI Blog2014 (10) TMI 1073X X X X Extracts X X X X X X X X Extracts X X X X ..... dings. 2. That in any case and in any view of the matter, action of Ld. CIT(A) in not quashing the impugned assessment order framed by Ld. AO in the status of assessee as 'HUF' which is contrary to law and facts, unjustified and void ab initio. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in disallowing the deduction of Rs.1,81,15,551/- u/s 54B of the Act and that too without appreciating the facts and circumstances of the case and by recording incorrect facts and findings. 4. gard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not allowing the deduction U/S 54F fully as claimed by the assessee on both the residential houses and has further erred in sustaining the action of Ld. AO in allowing the deduction for only one investment i.e. 18,91,250/- that too without any basis. 5. That in any case and any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in denying/reducing the deduction u/s 54B and 54F on the second house property and framing the impugned assessment order is contrary to law and facts, void a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he deduction uls 54B and framing the impugned assessment order is contrary to law and facts, void ab initio, beyond jurisdiction, and without giving adequate opportunity of hearing, by recording incorrect facts and findings and the same is not sustainable on various legal and factual grounds. 6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in charging the interest U/S 234A and 234B of the Income Tax Act, 1961. 7. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds prejudice to each other. 4. The facts of the case are not in dispute by both the parties, therefore, need not repeated here for the sake of convenience. 5. Ld. Cousnel of the assessee has filed the synopsis in support of his claim, which is reproduced as under:- "The issue in the present appeal is regarding the Assessment Order passed by Ld. A.O. as HUF, which he was duty bound to pass it as individual and assessee HUF was not owning the land in question and thus there was no question of bringing to tax any capital gain in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he details of agricultural land and the year and the manner of acquisition which would show that the impugned land was acquired in 1994, through court decree from father Sh. Ram Kishan Coudhary and the father Sh. Ram Kishan Chaudhary also obtained the same either through court decree or purchased, obtained the same by way of gift from father and Will of the brother. PB 1-2, 3-6, 7-8 are the mutations of the properties owned by Mr. Ran Singh -grandfather of the appellant and details of which are on slip prior to PB 1. PB 131-132 is the submissions before Ld. CIT (A) submitting that there are several judicial decisions holding that property acquired by the assessee in the circumstances constitute individual property. PB 120-122, 123 is submission to Ld. CIT (A) on these lines. PB 141-142 are the submissions to Ld. CIT (A) on this issue PB 148-149 is the counter comments from Ld. A.O. mentioning that since assessee showed this property as HUF property, therefore it has to be taxed in the hands of HUF meaning thereby Ld. A.O. accepts the factual position as to the manner of acquisition of the subject property and that being so, the capital gain tax liability can be raised in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (SC) Read at Page 74 last 7 lines of Para 1 *81 ITR 303 (Del.) Read at Page 304. *SDS Mongia vs CBDT 211 CTR 357 (Del) *128 ITR 486 (Guj.) *107 ITR 63 (Guj.) * S.R. Koshti 276 ITR 165 (Guj) As per law there can be no agreement between assessee and A.O., any reasoning adopted by Ld. A.O. that addition was based upon assessee agreement has to be excluded from the order. After excluding it, if there is no basis at all to sustain any of the addition made by A.O., the same has to be deleted. Srikant G. Shah vs ITO, (2007) 108 ITD 577 (Mum.) 1) Pullangode Rubber Produce Co. Ltd. vs State of Kerala and Anr. 91 ITR 18 (SC) It was held by the Hon'ble Supreme Court that even if the assessee filed its returns on the basis of some entries in his accounts, it was still open to the assessee to show that the entries in the accounts were incorrect. It was held vide Para 2 that an admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It was further held that it was open to the person who made the admission to show that it was incorrect. 2) S. Arjan Singh vs CWT 175 ITR 91 (Del) In this case it ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 - 72) Business expenditure- allowability- claim made at the time of assessment- claim not made in original return nor made by way of valid revised return but made in the course of assessment - AO was obliged to give due relief to assessee or entertain its claims its claims if admissible as per law even though the assessee had not filed revised return- Legitimate claim of assessee should not be rejected on technical grounds-Chicago Pneumatic India Ltd. vs. Dy. CIT (2007) 15 SOT 252 (Mumbai) followed. CIT vs. RAMCO INTERNATIONAL (2009) 221 CTR (P&H) 491 : (2009) 180 TAXMAN 584 : (Refer PB 89 - 290) Deduction under s. 80-IB-Allowability-Claim not made in return- Assessee having duly furnished the documents and submitted Form No. 10CCB during assessment proceedings, claim for deduction under s. 80IB by way of an application was admissible-There was no requirement for filing any revised return-No substantial question of law arises- Goetze (India) Ltd. vs. CIT (2006) 204 CTR (SC) 182 : (2006) 284 ITR 323 (SC) distinguished. ACWT vs. KU. RAGINI SANGHI (2009) 120 TTJ (Ind) 1116 : (2010) 123 ITD 384 : (2009) 17 DTR 276 (Refer PB 291 - 295) As per s. 5(1)(vi) one house or part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 331 (Kar.), it was held that assessee can always show the bona fide mistake in the return filed. (PB 164-168) Adverse observations of Ld. A.O. are met as under:- A.O. has mentioned at Page-3 of the Assessment Order that it was the HUF, which declared income from capital gain in its return and has not disputed for quite some time and that assessee has declared the interest received as HUF income. In reply it is submitted that there can be no estoppels against law and if assessee can show that there can be no capital gain in its hands as the property in question was not owned by it, liability cannot be fastened merely for the reason that it was shown in the return as per the decisions mentioned above. Adverse observations of Ld. CIT(A) are met as under:- 1. Ld. CIT(A) has mentioned in Para 2.07 that since HUF has not revised its return, benefit of a fresh claim cannot be given. In reply it is submitted that the issue is not about any fresh claim, but the issue is whether an HUF which does not own the property in question can be saddled with tax liability as capital gain on that very property merely for the reason that it itself has shown that said capital gain in it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee. 8. With regard to ground no. 4 relating to deduction u/s 54-F fully as claimed by the assessee is concerned, Ld. Counsel of the assessee fairly conceded that this issue is covered in favor of the Revenue by the decision of the Punjab and Haryana High Court in the case of Pawan Arya vs. CIT in IT Appeal No. 613 of 2010 vide order dated 13th December, 2010 reported in (2011) 237 CTR (P&H) 210 wherein the Hon'ble Court has adjudicated the matter as under:- "2. The assessee claimed exemption on capital gains on sale of flat on the ground of acquisition of two houses. The AO set off the capital gain against one of the houses but held the claim not to be admissible against second house. However, the CIT(A) upheld the claim of the assessee relying upon decision of Bangalore Bench of the Tribunal in D. Anand Basappa vs. ITO (2005) 92 TTJ (Bang) 597 : (2004) 91 ITD 53 (Bang). The said view has been reversed by the Tribunal as follows : "6. We have carefully considered the rival submissions in the light of the material placed before us. The facts in the present case are clear. The assessee is claiming exemption in respect of two independent residential houses situated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premises as one unit in the sale deed is not the ground to hold that the assessee had no intention to purchase two flats as one unit. From these observations of Hon'ble High Court, it is clear that while rendering the decision they have kept in mind that the purchase of two flats in the same building which were united for living of the assessee by making necessary modifications made the residential unit as one and, thus, that case could not be applied to the facts of the case of the assessee........." 3. We have heard learned counsel for the appellant. 4. As regards claim for exemption against acquisition of two houses under s. 54 of the Act, the same is not admissible in plain language of statute. In the judgment of Karnataka High Court in CIT vs. D. Ananda Basappa (2009) 223 CTR (Kar) 186 : (2009) 309 ITR 329 (Kar), referred to in the impugned order, exemption against purchase of two flats was allowed having regard to the finding that both the flats could be treated to be one house as both had been combined to make one residential unit. The said judgment, thus, proceeds on a different fact situation. 5. Learned counsel for the appellant wanted to raise certain other points ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the "individual" and not the property of HUF and capital gain tax liability can not be raised in its hands.Following pleadings and evidences would establish that the land in question was the property of individual and not the property of HUF and thus, any capital gain arising on the transfer of such land would not be the income of the HUF. We find that the Hon'ble Bombay High Court in the fcase of CIT vs. Khimji Teju Kaya reported in 115 ITR 168 (Bom) held that self acquired property of the father bequeated to Son by Will would constitute individual property and even if income from such property was shown in the return as HUF income, the income from that property is to be assessed in individual capacity. We also find that Ld. Counsel of the assessee at the time of heraing has also filed the copy of income tax return of Sh. Sunny Choudhary, who is brother of the assesee and other co sharers which shows that the same was filed in the capacity of 'ïndividual'. In view of above discussions, we find that both the assessees come under the individual capacity instead of HUF category. Accordingly, we cancel the orders of the authorities below on this issue in respect of both the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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