Shri Vishwanath D. Karad, Pune v. Dy. CIT,CCI (1),, Pune

ITA 1037/PUN/2009 | 2006-2007
Pronouncement Date: 18-03-2011 | Result: Allowed

Appeal Details

RSA Number 103724514 RSA 2009
Assessee PAN MARCH2011S
Bench Pune
Appeal Number ITA 1037/PUN/2009
Duration Of Justice 1 year(s) 6 month(s) 16 day(s)
Appellant Shri Vishwanath D. Karad, Pune
Respondent Dy. CIT,CCI (1),, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 18-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 18-03-2011
Date Of Final Hearing 17-01-2011
Next Hearing Date 17-01-2011
Assessment Year 2006-2007
Appeal Filed On 01-09-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I.C. SUDHIR JM AND SHRI D. KARUNAKARA RAO AM ITA NO. 1037/PN/2009 : A.Y. 2006-07 SHRI VISHWAATH D. KARAD PLOT NO. 18 & 19 RAJPATH HOUSING SOCIETY RAMKRISHNA PARAMHANS NAGAR OPP. VANAZ FACTORY PAUD ROAD PUNE 411 038. APPELLANT VS. DY. CIT CIR. 1(1) PUNE RESPONDENT APPLICANT BY : SHRI S.K. TYAGI RESPONDENT BY : SHRI ABHAY DAMLE O R D E R PER D. KARUNAKARA RAO A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF HE CIT(A)-I PUNE DATED 23-6-2009 ON THE FOLLOWING GROUNDS: 1. THE LEARNED (LD) CIT(A) ERRED IN NOT ACCEPTING T HE RECEIPT OF RS.2 80 120 AS AGRICULTURAL INCOME BY THE APPELLAN T FROM HIS HUF AND CONSEQUENTLY TREATING THE SAME AS INCOME FROM UNDISCLOSED SOURCES. 1.1 THE LD CIT(A) ERRED IN TREATING THE AGRICULTUR AL INCOME OF THE HUF OF KARAD FAMILY AS NIL IN THE FACE OF THE OBSERVAT IONS OF THE ASSESSING OFFICER (AD) ON PAGE 7 OF THE ASSESSMENT ORDER THAT THE JOINT KARAD FARMER FAMILY HAS HUGE LAND HOLDING AND MAY HAVE SUBSTANTIAL AGRICULTURAL INCOME ALSO. 1.2 THE LD CIT(A) ERRED IN NOT ACCEPTING THE EXIST ENCE OF JOINT KARAD FARMER FAMILY WITHOUT EXAMINING THE FACTUAL DETAIL S IN RESPECT THEREOF. 1.3 THE LD CIT(A) ERRED IN NOT ACCEPTING THE EXIST ENCE OF JOINT KARAD FARMER FAMILY IN THE FACE OF THE FACT THAT ALL THE MEMBERS OF THE KARAD FAMILY ARE STAYING JOINTLY IN PUNE AND RAMESW AR AND ALL THE AGRICULTURAL LAND TO THE EXTENT OF 200 ACRES APPRO XIMATELY IS BEING CULTIVATED JOINTLY BY THE MEMBERS OF THE HUF . 1.4 THE LD CIT(A) FAILED TO TAKE INTO CONSIDERATIO N THE FACT THAT THE AGRICULTURAL INCOME OF THE JOINT KARAD FARMER FAMIL Y WAS RS.31 LAKHS APPROXIMATELY DURING THE FY RELEVANT TO THE CURREN T A Y 2006-07 PARTICULARLY IN VIEW OF THE SOLID DOCUMENTARY EVID ENCE PRODUCED IN THE FORM OF CERTIFICATES FROM TWO TALATHIS REGARDIN G QUANTUM OF AGRICULTURAL INCOME OF THE JOINT KARAD FARMER FAMIL Y. ITA 1037/PN/2009 VISHWANATH KARAD A.Y. 2006-07 2 2. THE LD CIT(A) ERRED IN CONFIRMING THE ADDITION O F RS.90 000 ON ACCOUNT OF LOW WITHDRAWALS BY THE APPELLANT FOR HOU SEHOLD EXPENSES . 2.1 THE LD CIT(A) ERRED IN NOT TAKING INTO CONSIDE RATION THE FACT THAT THE MAJOR PART OF THE HOUSEHOLD EXPENSES OF THE MEMBERS OF THE HUF OF KARAD FAMILY STAYING WITH THE APPELLANT IS MET FROM THE AGRICULTURAL INCOME OF THE JOINT KARAD FARMER FAMIL Y. 2.2 THE LD CIT(A) ERRED IN CONFIRMING THE ESTIMATE OF THE HOUSEHOLD EXPENSES OF THE APPELLANT AT RS.3 50 000 WITHOUT A NY BASIS AS AGAINST THE AMOUNT OF RS.2 60 000 SHOWN BY THE APPE LLANT. 3. THE LD CIT(A) ERRED IN CONFIRMING THE ADDITION O F RSA 49 562 TO THE TOTAL INCOME OF THE APPELLANT BY WAY OF INVESTMENT IN JEWELLERY . 3.1 THE LD CIT(A) GROSSLY ERRED IN CONFIRMING THE A FORESAID ADDITION IN THE HANDS OF THE APPELLANT AS FIRST OF ALL THE JEW ELLERY IN QUESTION HAS BEEN CLAIMED BY MRS.USHA V.KARAD TO BE BELONGIN G TO HER AND SECONDLY THE AFORESAID JEWELLERY HAS BEEN PURCHASE D OVER A LARGE NUMBER OF YEARS STARTING FROM THE MARRIAGE OF THE APPELLANT WITH MRS.USHA V.KARAD IN THE YEAR 1970 . 3.2 THE LD CIT(A) ERRED IN CONFIRMING THE AFORESAI D ADDITION PURELY ON THE BASIS OF A STATEMENT OF MRS.USHA V.KARAD THAT S OME PORTION OF THE JEWELLERY PURCHASED AFTER HER MARRIAGE HAD BEEN PAID OUT OF THE SAVINGS OF HER HUSBAND . 3.3 3 THE LD CIT(A) ERRED IN NOT GIVING ANY CREDIT OF THE AGRICULTURAL INCOME OF THE HUF OF THE APPELLANT THOUGH THE AO H AS ACCEPTED THE FACT THAT THE KARAD FARMER FAMILY HAS HUGE LAND HOLDING AND MAY HAVE SUBSTANTIAL AGRICULTURAL INCOME ALSO. 3.4 THE LD CIT(A) ERRED IN NOT APPLYING AND ACCEPT ING THE NORMS LAID DOWN BY INSTRUCTION NO.L916 DATED 11.5.1994 ISSUE D BY THE CBDT ACCORDING TO WHICH THE MEMBERS OF THE KARAD FAMILY COULD POSSESS WITHOUT OFFERING ANY EXPLANATION 8.2 KG. OF GOLD J EWELLERY AS AGAINST THE GOLD JEWELLERY OF 5.5 KG. FOUND DURING THE SEARCH OPERATION. 4. ALL THE AFORESAID GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO ONE ANOTHER. 5. THE APPELLANT CRAVES LEAVE TO ADD ALTER AMEND MODIFY OR DELETE ANY OR ALL THE AFORESAID GROUNDS OF APPEAL. 2. THE MAIN ISSUE INVOLVED IN THIS APPEAL RELATES T O HUF AGRICULTURAL INCOME APART FROM ADDITION ON ACCOUNT OF LOW WITHDRAWALS AND ESTIMATION OF HOUSEHOLD EXPENSES. AT THE OUTSET OF HEARING THE ISSUE WITH RESPECT TO AGRICULTURAL INC OME CAME UP FOR CONSIDERATION BEFORE CO-ORDINATE BENCH OF THIS TRIB UNAL IN ASSESSEES OWN CASE AND THE TRIBUNAL VIDE ITS ORDER DATED 16 TH DECEMBER 2010 IN ITA NO. 1406 TO 1411/PN/2008 FOR A .Y. 2000-01 ITA 1037/PN/2009 VISHWANATH KARAD A.Y. 2006-07 3 TO 2005-06 HAS REMITTED THE MATTER BACK TO THE FILE OF THE A.O. FOR DECIDING IT AFRESH AS PER FACT AND LAW IN THE LIGHT OF DISCUSSIONS MADE THEREIN BY OBSERVING AS UNDER: 3. THE ASSESSEE IS A MANAGING TRUSTEE OF MAHARASHT RA ACADEMY OF ENGINEERING AND EDUCATIONAL RESEARCH (MA EER) PUNE. THERE WAS A SEARCH U/S 132 OF THE ACT IN THE CASE OF TRUSTEES OF MAEER ON 20-7-2005. THE ASSESSING OFFI CER MADE AN ADDITION WITH REGARD TO AGRICULTURAL INCOME FROM HUF TO THE EXTENT OF RS.1 89 000/- TREATING THE SAME AS INCOME FROM UNDISCLOSED SOURCES IN A.Y. 2000-01. SIMILAR A DDITIONS WERE MADE IN OTHER YEARS WHICH WERE ALSO CONFIRMED BY THE CIT(A). THE STAND OF THE ASSESSEE IS THAT THE MEMBE RS OF JOINT KARAD FARMER FAMILY CONSISTED SHRI TULSHIRAM KARAD SHRI VISHWANATH KARAD AND SHRI KASHIRAM KARAD THEIR WIV ES AND CHILDREN ETC. THE ASSESSEE CLAIMED THAT THE AGRICU LTURAL INCOME BELONGED TO THE AFORESAID JOINT FAMILY. THE ASSESSING OFFICER HAS DISPUTED THE AGRICULTURAL INCOME WHILE THE CIT(A) HAS DISPUTED THE FACT WHETHER THE AGRICULTURAL INCO ME BELONGS TO HUF OR NOT. ACCORDING TO CIT(A) THERE WAS NO PRO OF OF HUFS HOLDING THE AGRICULTURAL LAND. SO THE MOOT I SSUE IS WHETHER ALL AGRICULTURAL HOLDINGS BELONG TO HUF OR IN THE INDIVIDUAL CAPACITY AS CO-OWNER. THE ASSESSEE RAIS ED THREEFOLD ARGUMENTS. FIRSTLY CERTAIN AGRICULTURAL L AND WAS INHERITED BY LATE SHRI DADARAO KARAD THE FATHER OF THE ASSESSEE WHICH WAS INHERITED BY WAY OF SUCCESSION U NDER THE RELEVANT PROVISIONS OF HINDU SUCCESSION ACT READ WI TH RELEVANT PROVISIONS FOR MUTATION UNDER THE LAND REVENUE ACT APPLICABLE TO LAND IN QUESTION. SECONDLY IT WAS CLAIMED THAT SUBSEQUENTLY THE CO-PARCENERS HAVE PURCHASED THE LAND IN CO-PARC ENER CAPACITY IN THE LIFE TIME OF FATHER OF THE ASSESSEE AS WELL AS SUBSEQUENT TO THE DEATH OUT OF INCOME FROM JOINT HO LDING OF LAND AS DISCUSSED ABOVE. 4. AS DISCUSSED ABOVE THE ASSESSING OFFICER HAS NO T DISPUTED THE FACT OF AGRICULTURAL HOLDING BUT HE HA S DISPUTED THE INCOME OUT OF ABOVE AGRICULTURAL HOLDING. HOWEV ER IN APPELLATE PROCEEDINGS THE CIT(A) RAISED AN ISSUE WH ETHER THE INCOME IS FROM HUF HOLDINGS OR OTHERWISE. THE PRO CEEDINGS BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A) ARE CO-TERMINUS. SO THE CIT(A) HAS OPTIONS TO ENLARGE T HE INVESTIGATION OF EXISTING ISSUE WITH REGARDS TO GEN UINENESS OF HUF INCOME AS CLAIMED BY THE ASSESSEE. THE LOWER AUTHORITIES HAVE NOT PROPERLY ADJUDICATED THE ISSUE IN ITS PROPER PERSPECTIVE. THE REVENUE AUTHORITIES ARE SU PPOSED TO SEE THE LAND HOLDINGS MINUTELY. THEY ARE SUPPOSED T O ASCERTAIN WHETHER THE ANCESTRAL LAND WAS HELD BY TH E FATHER OF THE ASSESSEE AS THE KARTA OF HUF AND AFTER HIS DEAT H THE SAME HAS BEEN MUTATED IN THE NAME OF CO-PARCNERS AS PER THE RELEVANT PROVISIONS OF LAND REVENUE ACT APPLICABLE TO THE AREA. THE SECOND CATEGORY OF LAND AS CLAIMED BY TH E ASSESSEE IS THAT DURING THE LIFE TIME OF THE FATHER OF THE ASSESSEE CERTAIN LANDS WERE PURCHASED OUT OF HUF FU NDS SO THE SAME HAS TO BE TREATED AS HUF PROPERTY IRRESPEC TIVE OF FACT THAT SAME WAS PURCHASED IN THE NAME OF CERTAIN /CO- PARCENER. SO IN CASE THE FUNDS FOR PURCHASING THE LAND ARE FROM INCOME OF HUF AGRICULTURAL HOLDING IT WILL BE HUF PROPERTY OTHERWISE NOT. CONSEQUENTLY THE INCOME THEREFROM WI LL HAVE TO ITA 1037/PN/2009 VISHWANATH KARAD A.Y. 2006-07 4 BE DECIDED AS HUF INCOME OR OTHERWISE WHICH WAS AT THE DISPOSAL OF THE ASSESSEE AT THE RELEVANT POINT OF T IME CLAIMED TO BE IN CAPACITY OF CO-PARCENER. THIS ISSUE NEEDS DEEP PROBE INTO THE MATTER BY THE REVENUE. AS DISCUSSED ABOVE THIS EXERCISE HAS NOT BEEN DONE BY THE REVENUE AUTHORITI ES NOR THE ASSESSEE HAS GIVEN REASONABLE EXPLANATION WITH REGA RDS TO LAND HOLDINGS IN QUESTION. THIS ISSUE HAS TO BE DEA LT WITH AS PER THE FACTS AND CIRCUMSTANCES OF THE CASE. THE AS SESSEE HAS ALSO CLAIMED THAT CERTAIN LANDS HAVE BEEN PURCH ASED SUBSEQUENT TO THE DEATH OF FATHER OF THE ASSESSEE A S CO- PARCENER. THESE HOLDINGS HAVE TO BE ANALYZED WITH S AME ANGLE I.E. WHETHER SUCH LAND HAS BEEN PURCHASED OUT OF INCOME FROM HUF HOLDINGS OR NOT. SO IN THE INTERES T OF JUSTICE WE RESTORE THIS ISSUE TO ASSESSING OFFICER WITH A D IRECTION TO DECIDE THE SAME S PER FACT AND LAW AND IN THE LIGHT OF THE DISCUSSIONS AFTER PROVIDING DUE OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE 3. FACTS OF THE PRESENT CASE ARE IN PARI MATERIA WI TH THOSE IN ITA NO. 1406 TO 1411/PN/2008 CITED SUPRA WE REMIT THE ISSUE INVOLVED IN THE PRESENT APPEAL TO THE FILE OF THE A.O FOR DE CIDING IT AFRESH AS PER FACT AND LAW AFTER PROVIDING ADEQUATE OPPORTUNI TY OF HEARING TO THE ASSESSEE. FURTHER THE ISSUES WITH RESPECT OF LOW WITHDRAWALS AND ESTIMATION OF HOUSEHOLD EXPENSES ARE LINKED WIT H THE ISSUE OF AGRICULTURAL INCOME. SINCE WE ARE REMITTING THE IS SUE WITH RESPECT TO AGRICULTURAL INCOME THE OTHER CONNECTED ISSUES REGA RDING WITHDRAWALS AND ESTIMATION OF HOUSEHOLD EXPENSES AR E ALSO RESTORED TO THE FILE OF THE A.O FOR DECIDING AFRESH IN ACCOR DANCE WITH LAW AND FACTS AFTER PROVIDING DUE OPPORTUNITY OF HEARING T O THE ASSESSEE. 4. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 18 TH MARCH 2011 SD/- SD/- ( I.C. SUDHIR ) JUDICIAL MEMBER (D. KARUNAKARA RAO ) ACCOUNTANT MEMBER PUNE DATED THE 18 TH MARCH 2011 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT-I PUNE ITA 1037/PN/2009 VISHWANATH KARAD A.Y. 2006-07 5 4. CIT(A)-I PUNE 5. D.R. ITAT B PUNE BENCH BY ORDER ASSISTANT REGISTRAR I.T.A.T PUNE