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TMI Blog2017 (4) TMI 809X X X X Extracts X X X X X X X X Extracts X X X X ..... . Even on merits,the matter had to be adjudicated in favour of the assessee. The AO has gone only by the sale deed and has conveniently forgot the affidavit of the ex-husband of the assessee as well as the divorce decree.Tax liability has to determined by substance of a transaction and not by forum.DS had admitted that he was the sole owner of the part of flat F.1 and sale proceeds were received by him for selling the same.The AO/FAA had made no inquiry with DS. The assessee has discharged the burden cast upon her.It was the turn of the revenue authorities to make further inquiries in that regard. We find that they decided the issue without going to the substance and the surrounding circumstances. We are opinion that order of the FAA can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s divided into two areas by mutual consent consisting of 1497 sq.ft. (belonging to the assessee) and 978 sq.ft. (belonging to DS),that the assessee continued to stay in the portion consisting of 1497 sq.ft., that the Flat No.GF-2 was purchased by DS vide sale agreement,dated 05.07.2007,for a consideration of ₹ 1.40 crores, that the assessee had no right,title or interest in the Flat No.F- 2,that later on property consisting of F-2 and a part of Flat F-1(comprising area of 978 sq.ft. was sold for ₹ 4.05 crores),vide agreement,dated 22.2.2010. The AO further observed that the assessee and her husband were joint transferors in the said sale deed, that the receipt of ₹ 4.05 crores issued to the buyers was also jointly signed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment order, the FAA held that from the purchase agreement it was clear that Flat No.F-2 was purchased by DS, that Flat No.2 and 978 Sq.ft. area of Flat-F-1 had been sold by the husband of the assessee, that AO had wrongly taxed the capital gain arising out of sale of Flate F-2 in the hands of the assessee, even on protective basis, that same would rightly be taxable in the hands of DS.With regard to 978 sq.ft. area of Flat F-1, he held that the assessee and her husband were joint owners of the Flat, that nowhere in the sale deed it was mentioned that DS was the owner of the 978 sqft. area in absolute terms, that no documentary evidence was produced evidencing that DS was exclusive owner of the property in dispute. He further held that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deed for selling part of F.1,that DS in his affidavit stated that the assessee had not received any thing on account of sale of flat F.1,that the AO made protective assessment in case of the assessee,that no substantive assessment was made in case of DS,that during the appellate proceedings the FAA partly allowed the appeal of the assessee,that he did not deal with the jurisdictional issue i.e.nullity of protective assessment in absence of substantive assessment. He held that matter was decided on merits and the additional ground raised by the assessee about protective /substantive assessment was infructuous. In our opinion,jurisdictional issues have to be adjudicated first.An order without jurisdiction in no order.Therefore,whenever a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may have been received either by A or by B or by both together, it would be open to the relevant income-tax authorities to determine the said question by taking appropriate proceedings both against A and B. In the matter of Sunil kumar(139ITR880)the Hon ble Bombay High court has held as under: The I.T. Act, 1961, has not made any specific provision about protective assessment or precautionary assessments. In a taxation proceeding, a question might arise as to whether an income said to have been earned by B is really earned by him or it is an income of A. The I.T. Dept. has to make an assessment within the prescribed period of limitation and, hence, it would not delay long the making of an assessment on B, simply because the enqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome.In absence of a substantive order the AO was not justified in passing a protective order.Considering the above,we hold that the protective assessment passed by the AO was invalid and without the sanction of the law.So,reversing the order of the FAA,we decide first two grounds in favour of the assessee. 6. Even on merits,the matter had to be adjudicated in favour of the assessee.The AO has gone only by the sale deed and has conveniently forgot the affidavit of the ex-husband of the assessee as well as the divorce decree.Tax liability has to determined by substance of a transaction and not by forum.DS had admitted that he was the sole owner of the part of flat F.1 and sale proceeds were received by him for selling the same.The AO/FAA ..... X X X X Extracts X X X X X X X X Extracts X X X X
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