Chandresh J.Thakkar, Ahmedabad vs Department Of Income Tax

(BEFORE SHRI PRAMOD KUMAR, A.M. AND SHRI S.S. GODARA, J.M.)

ITA No.1857/Ahd/2011 A.Y. 2007-08

ITO, Gandhinagar vs. Shri Chandresh J. Thakkar

Plot No.14, 4th Floor, Udhyog Bhavan, Sector-11,

Gandhinagar

(PAN: AAVPT 2717M)

(Appellant) (Respondent)

Assessee/Appellant by : Shri P.L. Kureel, Sr. D.R.

Revenue/Respondent by : Shri S.N. Divetia, A.R.

Date of hearing : 23.04.2015

Date of pronouncement : 30.04.2015

PER S.S. GODARA, JUDICIAL MEMBER:

This Revenue's appeal for A.Y. 2007-08 arises from order of the CIT(A),

Gandhinagar dated 11.4.2011 passed in case no.CIT(A)/GNR/186/2009-10 deleting

addition of Rs.29,78,506/- made on account of long term capital gains in assessment

order dated 17.12.2009, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in

short 'the Act') 2

2. The assessee is an individual. He filed his return on 6.7.2012 admitting total

income of Rs.4,25,678/- .The same was summarily processed.

3. The Assessing Officer took up scrutiny. He received an AIR information quoting

the assessee's PAN to have entered into sale transaction of a chunk of immovable

property. He sought to assess the consequential capital gains in his hands. The assessee

pleaded that his late father had purchased the said land on 13.12.1999 in his name from

his own funds. Thereafter he had converted the said property in the name of

eponymous HUF after the death of his father on 4.5.2004 as per his last wish. A plea was

taken that in fact HUF had sold the property on 7.10.2006 and received the sale price in

question. The assessee further submitted that the HUF had already included the land in

question in its return for A.Y.2005-06, sold it on 7.10.2006 and reinvested the sale

proceeds in purchasing a plot. The quoting of the individual PAN was claimed as a

technical mistake. The Assessing Officer did not agree to the above explanation. He

observed that the property in questiion had been purchased in the assessee-individual's

name, his late father had paid the consideration money from his savings account, there

was no evidence on record to prove his last wish of converting the property in the HUF's

name, the assessee had not utilized the HUF PAN in executing the sale deed and the

impugned capital asset was purchased/sold in individual capacity to hold that capital

gains of Rs.30,16,505/- had to be assessed in the assessee's hands only. The assessee's

plea of technical mistake in wrongly quoting his PAN number stood declined.

4. The assessee preferred an appeal. He challenged the Assessing Officer's action

adding the impugned capital gains in his hands. He claimed credit of the capital gains

declared in the HUF's return. The CIT(A) referred this additional plea for Assessing

Officer's comments who reiterated the assessment order. Thereafter, the assessee 3

appears to have filed sum additional details showing ownership of the HUF over the

property in question in assessment year 2005-06 as per his father's last wishes. The

CIT(A) sought a remand report. The Assessing Officer submitted the same on 5.4.2011.

Thereafter, the CIT(A) in the order under challenge observes that the assessee's father

had paid the consideration money at the time of purchasing the property in question in

the assessee's name. He quotes admitted factual position that the assessee's funds has

not been utilized in purchase of the property. He finds that the assessee's father was in

the habit of purchasing similar properties in his children's names during his life time.

The CIT(A) takes account of facts on record that the HUF had already shown the land

sold in its ownership for the return filed in A.Y.2005-06, i.e., well before the sale deed. It

was also found to have claimed exemption with regard to the capital gains arising from

the transfer in question. The lower appellate authority further takes into account the

family circumstances in view of the assessee's plea that his father had expressed a last

wish to convert the property in HUF's name. The relevant provisions under the Benami

Transactions (Prohibition) Act, 1988 are held not to apply in case of a property held by

an HUF in the name of its coparcener. In view of all these overwhelming evidence, the

lower appellate order holds that the Assessing Officer had wrongly assessed the

impugned capital gains in the assessee's hand instead of his HUF. The assessee has

succeeded in the lower appellate proceedings. Therefore, the Revenue is in appeal.

5. We have heard both sides and perused the case file. Relevant facts stand

narrated hereinabove. The Revenue seeks restoration of the impugned capital gain

addition in the assessee's hands instead of its HUF. It is an admitted factual position that

the assessee's father had purchased the asset in question in his name. It has come on

record through documentary evidence that assessee's fund were nowhere utilized in the 4

said purchase. The assessee appears to have converted this said land into HUF's estate.

The HUF declared the very property in its name in A.Y.2005-06 return. The assessee

sold its property on 7.10.2006 along with the other co-shares. He quoted his individual

PAN number. Since the Revenue record demonstrated his name in the title column,

there was no entry in the sale deed clarifying the HUF to be its owner for obvious

reasons. The fact also remains that the HUF in the present case has declared the

impugned capital gains in its hands. The Revenue has not controverted all these facts.

Therefore, we observe that mere quoting of individual PAN number or assessee

individual names in the sale deed cannot form the sole reasons to assess impugned

capital gains in the assessee's hands instead of his HUF. We affirm the CIT(A) findings

and reject the Revenue's ground.

6. The Revenue's appeal is dismissed.

Order pronounced in the court on this day the 30 April, 2015 in Ahmedabad.

Sd/- Sd/- (PRAMOD KUMAR) (S.S. GODARA) Accountant Member Judicial Member Ahmedabad; Dated : April, 2015 Prabhat Kumar Kesarwani Copy of the order forwarded to: 1. The Appellant 2. The Respondent 3. Concerned CIT 4. CIT(A) 5. D.R., ITAT, Ahmedabad 6. Guard File

By order,

Dy./Asstt. Registrar

ITAT, Ahmedabad