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TMI Blog2021 (7) TMI 625X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is not proper. We, therefore, set aside the order of CIT(A) in this case and accordingly, allow the appeal of the assessee. Assessments in the name of three persons - Three appellants names were not found in the agreement of sale-cum-GPA for the impugned property. Therefore, assessments made in these three appellants cases are void-ab-initio. In the result, these three appeals are allowed. - ITA No. 1123/H/2016, 1127/H/2016, 1122/H/2016, 1124/H/2016, 1125/H/2016 - - - Dated:- 13-7-2021 - Shri Satbeer Singh Godara, Judicial Member And Shri Laxmi Prasad Sahu, Accountant Member For the Assessee : Shri K.C. Devdas For the Revenue : Shri Rohit Mujumdar ORDER PER L.P. SAHU, A.M.: All these appeals filed by the assessees belong to a family are directed against CIT(A), Kurnool s separate orders, all dated 30/05/2016 for AY 20106-07 involving proceedings u/s 143(3) rws 147 of the Income- Tax Act, 1961; in short the Act . As identical issues are involved in appeals in ITA Nos. 1123 1127/Hyd/2016, the same were clubbed and heard together and, therefore, a common order is passed for the sake of convenience. 1.1 The grounds raised in ITA No. 1123/Hyd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e consideration of ₹ 2.00 crores, which was shared @20% by Vendors No.1 2 and 60% by Vendor No.3 (as per page No.2 of the Sale Deed), Hence, the capital gains attracted @20% on ₹ 2.00 crores, in respect of share of the assessee, for the purpose of calculation of capital gain tax: on account of the above sale consideration. 2.2 During the course of assessment proceedings, ARs of the assessee produced copy of Agreement of Sale-cum-GPA copy of partition deed among Sri Uma Maheshwar Reddy. (late) Sri K. Vishweswara Reddy and Sri K. Surendranath Reddy. They stated that the schedule property (as per page-2 of the sale deed) was held to be a part of the joint family property. as it was purchased by late K. Uma Maheshwar Reddy as a Karta of the Hindu Undivided Family. The Vendor No.1 Mr.KV Krishna Reddy is the son of late K. Uma Maheshwar Reddy, and Vendor Nos. 2 and 3 i.e. Sri K. Vishweswara Reddy and Sri K. Surendranath Reddy are the brothers of Sri Uma Maheshwar Reddy. All these three persons (Vendors No.1.2 3) are the owners of the schedule property, as per the sale deed. The schedule property was sold to Smt.V. Kamalamma. Hyderabad, Sri T. Ashok Kumar and Mr. Shant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Sri K. Nagarjuna Reddy (HUF). They stated that the Ld. AO issued a notice u/s.148 in the name of Sri K Nagarjuna Reddy, Individual. Hence, they submitted that the assessee, Sri K. Nagarjuna Reddy, in the capacity of Individual, has no income from any source. Therefore, a 'Nil' Return is submitted in response to the notice u/s.148 of the I.T. Act. 2.6. In view of the above, the AO observed that it is a clear fact that the schedule property was sold for an amount of ₹ 2.00 crores by the assessee, (late) K. Vishweswara Reddy, Sri K Surendranath Reddy, and Sri K.V. Krishna Reddy. The assessee and the ARs of the assessee have also accepted the same. The assessee has no PAN either in Individual or in HUF capacity and no Return of Income has been filed since a long time. It was noticed that all the above persons in the family are not filing returns and they have not paid capital gain taxes. Hence, all the persons and legal heirs are covered u/s.147 to detect the escapement of income in respect of their shares. Hence, reasons are recorded in the order-sheet vide Order-sheet entry dated 28.3.2013 and accordingly, a notice u/s.148 of the Act was issued. The undersign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. They are individual owners. This transaction is to be assessed in the hands of Individual only. But, the assessee argued that it belongs to HUF only. It is not established by the assessee that whether the property comes from Bigger HUF to HUF of late K. Uma Maheswar Reddy and from that of HUF to assessee-HUF. There is no order as such u/s.171 (1) of the Act, either in 1966 or in 2006. Hence, the assessee's contentions are not acceptable and this sale of schedule property under income from capital gains is to be taxed in the hands of Individual status of the assessee only. If he had no criminal intention to avoid taxes, he might have paid taxes in any of the statuses either in HUF or individual capacity. But, he has not done so. He has neither paid in HUF capacity nor paid in Individual capacity. 2.10. In view of the above facts and circumstances of the case, the AO held that the assessee's contentions are not acceptable as he is in the habit of avoiding capital gain taxes in any of the statuses Hence, his share of capital gain is calculated @ 20% of the sale consideration of ₹ 2 crores, which comes to ₹ 40,00,000/- as capital gains in the hands of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that the parties constitute HUF is brought out in this statutory order of 21/5/2005 and at paragraph (e) the fact that the parties having constituted HUF is clearly brought out. It has also been stated that K. Umamaheshwar Reddy died on 11/1/1993. Again at paragraph (i), page 12/23 it has been clearly stated that the parties constituted HUF and the property was purchased with joint family funds. 9. Copies of agreement of sale-cum-GPA and copy of partition deed were produced before the Assessing Officer which has been brought out at para 2 of the assessment order. 10.The Department received information from the Sub-Registrar's Office that the three Assessees sold an immovable property (supra) on 2/2/2006 and this triggered the re-assessment proceedings. The respective appellant HUFs were agriculturists and they did not have any taxable income and were not on the rolls of the Income Tax Department. 1l1. Notices U/s. 148 were issued without any PAN or the status in which notices were issued was mentioned. Accordingly, the entire capital gains on sale of the immovable property were assessed in the individual status of the three HUFs and the entire sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the property in the hands of K. Thirumaleshwar Reddy, K. Bheem Reddy and K. Nagarjunreddy the CIT(A) held that at the most this can be held as a protective addition which has been challenged by the three individual coparceners on the ground that they were not parties to the sale deed. 18. Therefore, the appellant submits the fact that the three entities constitute a HUF is borne out by the record of the deed of partition of 1966 and the order of the Special Officer and competent authority, Urban Land Ceiling Act, Hyderabad dated 21/5/2005 which finds a place at pages 18 to 28 of the paper book filed in the case of K. Surendranath Reddy on 20/02/2017 and the recital in the agreement of sale-cum-GPA (supra). 19. Therefore, the appellant submits that the status of the assessees is HUF on the basis of facts and evidence placed before the Assessing Officer and CIT (A) and therefore concludes to say that the entire assessment in the status as Individual is totally contrary to the facts and evidence on record and hence the assessments U/s 148 in the hands of three individual entities is not sustainable. 5.1 The ld. AR of the assessee relied on the following case law: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, allow the appeal of the assessee. 7.3 Since the facts and grounds raised in ITA No. 1127/Hyd/2016 are materially identical to that of ITA No. 1123/Hyd/2016, the decision taken in ITA No. 1123/Hyd/2016 shall apply mutatis mutandis to ITA No. 1127/Hyd/2016. Therefore, following the decision in ITA No. 1123/Hyd/2016, we allow the appeal in ITA No. 1127/Hyd/2016. 8. Now coming to the appeals in ITA Nos. 1122/Hyd/2016 in the case of K. Nagarjuna Reddy, 1124/Hyd/2016 in the case of K. Bheemi Reddy 1125/Hyd/2016 in the case of K. Thirumaleswara Reddy, at the time of hearing, the ld. AR submitted that the assessees in these appeals are not parties in the agreement of sale-cum-GPA, whereas, the AO has framed the assessments in the name of the above three persons on the same property. He, therefore, contended that these assessments are null and void. 9. In this regard, the ld. DR could not controvert the submission made by the ld. AR. 10. Considering the facts and submissions of the ld. AR of the assessee, we observe that these three appellants names were not found in the agreement of sale-cum-GPA for the impugned property. Therefore, assessments made in these three appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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