TMI Blog2014 (10) TMI 1073X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment proceedings itself, assessee came to know about the correct legal position that the subject property belongs to the individual and not to HUF and made detailed submissions supported by evidences to establish that the impugned land was the property of 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. As decided in Khimji Teju Kaya reported [ 1977 (11) TMI 26 - BOMBAY HIGH COURT] 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 hearing has also filed the copy of income tax return of Sh. Sunny Choudhary, who is brother of the assessee and other co sharers which shows that the same was filed in the capacity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 confirming the action of Ld. AO in framing the impugned assessment in violation of principles of natural justice in as much as passing the impugned order by recording incorrect facts and findings and without providing adequate opportunity of hearing. 7. 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. 8. 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 are without prejudice to each other. 3. The grounds raised in ITA No. 2566/Del/2012 read as under:- 1. 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. Aa in framing the impugned assessment order in the status of assessee as 'HUF instead of 'Individual' and that too by disregarding the submissions of as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the hands of the appellant-HUF on the basis that appellant HUF was the owner of the land in question, whereas the fact of the matter is that appellant HUF was not the owner of land in question and therefore, there could not be capital gain in the hands of the appellant HUF and capital gain cannot be assessed in the hands of the appellant HUF, merely on the basis that the appellant HUF filed its return (PB 112-114) by treating itself as the owner of land, more so when appellant HUF made detailed submissions with evidences during assessment proceedings itself showing that it was not the owner of the agricultural land and that the land in question was owned by the individual. Mr. Ramneek Choudhary along with other co-sharer sold the agricultural land in the year under assessment, which were interalia acquired by him through a court-decree from his father in F.Y. 19941995. Though the said land as per the provisions of Hindu Succession Act was individual property, but Mr. Ramneek Choudhary filed his income tax return for the first time for A.Y. 2007-08 i.e. the impugned year in the status of HUF showing wrongly the capital gain on sale of this land in the hands of HUF. During th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 are the submissions before Ld. CIT (A) PB 176 is the submissions before Ld. CIT (A) regarding the case of the Supreme Court in the case of Goetze India P. Ltd. It has been held in the case of CIT v. Khimji Teju Kaya 115 ITR 168 (Bom.) that self acquired property of the father bequeathed 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. PB 114-120 is the copy of the above decision 115 ITR 168 (Bom.) It has been held in the following decisions that properties received through gift or Will would constitute individual properties, are as follows:- a) S. Parthasarathy vs. CIT (1970) 76 ITR 688(SC) b) A.V.N. Jagga Row vs. CIT (1987) 166 ITR 862 (AP) c) C.W.T. vs. Narayan Dass Sadani (1967) 65 ITR 137 (Cal.) d) A. Seetharanaiah vs. W.T.O. (1983) 3 ITD (Hyd.) 495 e) Ajit G. Saraff Vs. CIT (1993) 201 ITR 388 (Kar) f) CIT vs. Sambhu Ram Soni (1982) 138 ITR 373 (Del.) g) CIT vs. Sambhu Ram (2003) 133 Taxman 15 (Del.) Thus, the land in question when belonged to Individual, its capital gain could not be b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount is lower than the returned amount it may be accepted if the lower amount is correct as per law. It was also held that an admission is an important piece of evidence, but it is not conclusive and it is open to the assessee to show that it is incorrect. 3) Federal Bank Ltd. vs State of Kerala 124 CTR 355 (Ker) Assessment made on the basis merely of an admission in return when that admission has been resiled from as made by mistake and there is nothing to indicate that the amount shown is the capital value in accordance with the Act is not valid in law- Admission made by assessee is relevant but not conclusive. CIT vs Bharat General Reinsurance Co. Ltd. 81 ITR 303(Del) Income Tax authorities - Jurisdiction of ITO Merely because an assessee has returned a particular income for a particular year, ITO does not get jurisdiction to assess the same in that year wherein fact the income does not properly belong to that assessment year. CIT vs Lucknow Public Educational Society 318 ITR 223 (ALL) AY 2001-02. The assessee was an educational institution registered under s.12A. It filed return claiming under s.10(23C). Later, it filed a revised return claiming exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be included in the net wealth of the assessee and wealth-tax shall not be payable by an assessee. Both the assessees are enjoying benefit of 50 per cent each i.e. in equal portion of the residential property and as such the same would not be subject-matter of wealth-tax. Even the Departmental Representative did not dispute the findings of the CIT (A) to that extent that the assessees are entitled to deduction and exemption under s. 5 (1)(vi). The contention of the Departmental Representative was only that since no deduction was claimed by way of revised return, the assessees would not be entitled to deduction at the assessment stage. The assessees did not claim any deduction. The claim of the assessees was with regard to exemption under s. 5(1)(vi) which provision clearly provides that once house or a part of house belonging to an individual shall not be included in the net wealth of the assessee and the assessee shall not be liable to pay wealth- tax thereon. It is a statutory provision contained under the Act and as such the law as it is should have been applied by the AO for granting exemption to the assessees. There is no need for the assessees to seek exemption as per law Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT(A) has approached the question wrongly. 2. Ld. CIT(A) has mentioned in Para 2.08 that assessee individual has thrown its property into the common hotchpot of the HUF. In reply it is submitted that if that is the case then in that case also the income is to be taxed in the hands of the individual and not in the hands of HUF as is clear from section 64(2). 6. Ld. Counsel of the assessee also filed a Paper Book containing pages 1 to 181 having the photocopies of deeds of the properties in question and also assessment records etc. 7. Ld. DR on the contrary relied upon the orders of the authorities below. Ld. DR reiterated the conclusion drawn by the Ld. CIT(A), which is reproduced as under:- In so far as Ramneek Chaudhary is concerned, it is noted that he was a stranger to the proceedings which were going on before the AO of HUF . If at all, the HUF felt that there was wrong statement made in the return, he was entitled to revise it by virtue of section 139(5) of the Act which allows revision on account of wrong statement qua the status. The assessee was also having an option to file the return in individual status (may be by filing belated return u/s. 139 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cations; one is in Dilshad Colony, Delhi and the other is in Faridabad. The assessee in the Special Bench case had also purchased two residential houses against sale consideration of residential flat at Gulistan situated at Bhulabai Desai Road, Mumbai. One residential property was at Varun Apartments at Varsova and the other property was at Erlyn Apartments, Bandra and it was held by the Special Bench in the aforementioned case i.e. ITO vs. Ms. Sushila M. Jhaveri (supra) that the assessee is entitled to get exemption only in respect of one house of her choice. Therefore, the decision of Special Bench is fully applicable to the present case and the assessee can avail exemption under s. 54 in respect of one residential house only. The factual aspect has not been disputed by learned Authorised Representative. The only dispute before us is legal proposition that whether the assessee is entitled to get exemption in respect of two independent residential houses purchased out of sale consideration of another residential house. Therefore, the issue is decided in favour of the Department and it is held that the assessee is entitled to get exemption under s. 54 in respect of one property o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neither been pleaded in the memo of appeal nor raised before the Tribunal. The same could not be allowed merely on the basis of oral submissions. 6. No substantial question of law arises. 7. The appeal is dismissed. 8.1 Respectfully following the precedent as above, we decide this issue against the assessee. 9. With regard to issue relating to framing the impugned assessment order in the status of assessee as HUF instead of Individual and that too by disregarding the submissions of the assessee and by recording incorrect facts and findings. We find that 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 hands of the appellant-HUF. We also find that A.O. computed the long term capital gain in the hands of the appellant-HUF on the basis that appellant HUF was the owner of the land in question, whereas the fact of the matter is that appellant HUF was not the owner of land in question and therefore, there could not be capital gain in the hands of the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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