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TMI Blog2016 (10) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... nder what circumstances and under what right or contract the assessee has come into possession of the property in question. It is pertinent to note here that the karta of the assessee HUF namely Mr. Amol C. Shah is also the director of the payer company M/s. Carlton Coats Pvt. Ltd. along with another director Mr. Milind C. Shah. The entire stress of the assessee has been on the copy of memorandum of understanding vide which the company has agreed to pay ₹ 50 lakhs to Mr. Amol C. Shah (HUF) wherein it has been mentioned that the said Mr. Amol C. Shah (HUF) claims share right title and interest on certain portions of the said property. It has also been mentioned that the assessee HUF is in the possession of the property in question since the original purchase of the property by M/s. Carlton Coats Pvt. Ltd. There is nothing mentioned in the copy of the agreement that what was the nature of possession in the property in question of the assessee HUF and how or under what rights the assessee HUF come into the possession of the property. We have perused the copies of the income tax returns and have found that the assessee had shown certain income from the activity of stacking/cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of its rights in property at Apti. 4. observing that eventhough the Hon'ble tribunal in the case of Carlton Coats Pvt. Ltd. (ITA No. 5432/MUM/2015 dated 18.3.2016 'C' Bench) had observed that the Apti property was under occupation of the Appellant, nowhere the Hon'ble Tribunal had given any finding that any right/title was vested with the Appellant with respect to the property, the sale of which had given rise to long term capital gains in the hands of the appellant. Your Appellant craves leave to add, alter, modify or delete all or any of the grounds of appeal. 3. The brief facts of the case are that the return of income for the year under consideration was filed by the assessee on 28.07.2009 declaring total income of ₹ 42,000/-. The assessment was completed under section 143(3) on 23.12.2011 making an addition of ₹ 50,00,000/- on account of income from other sources. According to the assessee, the amount represented compensation for vacating tenancy rights on the property at Apti Khalapur from M/s. Carlton Coats Pvt. Ltd. The entire amount was invested in capital gain bonds and deduction u/s.54EC was claimed out of capital gains. The Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. On the contrary, our passing any order on merits would amount to setting at naught the order by the tribunal in the case of the payer-company, so that our order is consistent therewith. We decide accordingly. 4. In the set aside proceedings, the AO again observed that there was no tenancy rights by the assessee HUF and hence the nature of receipts was not capital gains but was the income from other sources. He, therefore, held that when there was no capital gains, there was no justification in allowing exemption under section 54EC of the Act. He further observed that the amount received by the assessee HUF was without any consideration. He also observed that there was no double taxation as the amount received in the hands of the company M/s. Carlton Coats Pvt. Ltd. was taxed in the hands of the company and the amount of ₹ 50 lakhs received by the assessee was just an income received without any consideration and has to be considered as income from other sources. He therefore treated the nature of receipts of the assessee as income from other sources and denied the claim of deduction under section 54EC of the Act to the assessee. Being aggrieved by the above order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO took cognizance of the same in the following words- A perusal of I.T. Returns of the assessee-HUF for assessment years 2008-09, 2007-08 and 2006-07 also shows that the assessee HUF has not any business from the premises owned by the said company where Shri Amol C Shah is director and other directors are his family members. In the returns, the assessee HUF has merely disclosed income from Other Sources . In response to notice u/s 142(1), during the course of assessment proceedings, the assessee has stated that the Income shown under the head Income from Other Sources is the income the assessee has earned from staking and stocking of paper rolls and paper packing labour work from the Industrial Units within the nearby locations of Khalapur. In the light of the above, the AO came to the conclusion that the appellant was not able to prove with any documents that it held ownership/right/title in the property sold. Even during the set aside assessment proceedings, the AO has taken note of the above findings of the AO made in the original assessment order. It is pertinent to note here that the above findings of the AO was already before the Hon'ble Tribunal. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n g i s t h e Memorandum of Understanding entered between appellant and M/s. Carlton Coats Pvt. Ltd. on 2.72007. It is important to note that Karta of HUF is also Director in the M/s.Carlton Coats Pvt. Ltd. Therefore, this MOU is entered between Group concern only and it has to be categorized as a self-serving document. (iv) There is no details when and how appellant acquired the rights in the property. There is not a single legal agreement which can prove that at one stage of time appellant had acquired any legal right in the property. Once appellant has not acquired any legal right in the property how it can sell or surrender this nonexistent right to any person. The two documents on which appellant has relied are notice issued by Chief Judicial Magistrate Alibaugh, Raighad and summons issued by Alibaug Court. As stated in the assessment order, these notices and summons have been issued to Shri Amol C. Shah in his individual capacity and not in HUF capacity. Shri Amol C Shah is a Director in the company named M/s. Carlton Coats Pvt. Ltd and the notices were actually addressed to him in his capacity as a Director of the company which is apart from the fact that they were dresse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 54EC of the IT. Act. 13. I find no change in the facts of the case in the present appellate proceedings vis-a-vis that before my predecessor Ld.CIT(A) notwithstanding an opportunity given by the Hon'ble Tribunal to the appellate to submit before the AG-any proof or evidence in support of its claim of occupancy and/ or occupancy rights in the property, rent receipts, etc. vis- -vis the impugned sum received. It is clear that since the appellate did not have any evidence to support its claim, it has given the shape of already submitted evidences in the first round of assessment as additional evidences during the current round of assessment proceedings. In fact during the present appellate proceedings, the AR of the appellant has admitted before the undersigned that he does not have any further evidence to support his claim. 14. Looking to the overall facts and circumstances, in my considered opinion, the observations of the Ld. CIT(A) in para no. 12 (i)-(vii) still holds true. Therefore, taking a consistent stand it is held that ₹ 50,00,000/- is definitely a receipt from M/s Carlton Coats Pvt. Ltd. in the hands of the appellant. However, the appellant has fai led ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e nature of the rights of the assessee in the property in question. He simply has stated that the same was occupancy rights. However, there is no evidence on the file as to under what circumstances and under what right or contract the assessee has come into possession of the property in question. It is pertinent to note here that the karta of the assessee HUF namely Mr. Amol C. Shah is also the director of the payer company M/s. Carlton Coats Pvt. Ltd. along with another director Mr. Milind C. Shah. The entire stress of the assessee has been on the copy of memorandum of understanding vide which the company has agreed to pay ₹ 50 lakhs to Mr. Amol C. Shah (HUF) wherein it has been mentioned that the said Mr. Amol C. Shah (HUF) claims share right title and interest on certain portions of the said property. It has also been mentioned that the assessee HUF is in the possession of the property in question since the original purchase of the property by M/s. Carlton Coats Pvt. Ltd. However, there is nothing mentioned in the copy of the agreement that what was the nature of possession in the property in question of the assessee HUF and how or under what rights the assessee HUF come i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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