9911796707
TMI Blog2012 (10) TMI 1245X X X X Extracts X X X X X X X X Extracts X X X X ..... al set aside the order passed by the CIT (Appeals) for the block assessment year01.04.1995 to 07.06.2001 2. A search was conducted in the residential premises of the respondent-assessee on 07.06.2001 under Section 132 of the Act. During the course of search, many incriminating documents evidencing the assessee doing business in the money lending were found and the documents are seized. By the said business, the assessee has earned substantial income, which was never disclosed since the assessee was never assessed to the tax and no declaration has been filed by the assessee. The seized documents revealed that the said money lending activity was carried by the assessee in his HUF capacity and as such the source of the said money lending ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowing the bad debts claimed and also disruption of the joint family and issued demand notice. Being aggrieved by the assessment order dated30.06.2003, the assessee preferred an appeal before the CIT(Appeals)-4, Bangalore (hereinafter referred to as First Appellate Authority). The First Appellate Authority after considering the matter in detail confirmed the order passed by the Assessing Authority, however set aside the assessment order insofar as levy of surcharge. Accordingly allowed the appeal in part by its order dated 31.03.2004. Being aggrieved by the order dated 31.03.2004 passed by the First Appellate Authority, the assessee preferred an appeal before the Income Tax Appellate Tribunal in IT(SS)A-103/BANG/2004. The Income Tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the joint family properties. The partition deed is not registered documents. In the absence of the same, HUF is responsible to pay the tax and undisclosed income has to be brought to tax since the HUF continued to be in existence. The Appellate Tribunal without taking into consideration all these documents set aside the order, which is contrary to law. 5. On the other hand, Sri. A. Shankar, learned counsel appearing for the respondent argued in support of the order passed by the Income Tax Appellate Tribunal and contended that there is no infirmity or irregularity in the order passed by the Appellate Tribunal. Since the HUF has been disrupted much prior to the survey, the question of paying income tax of the disrupted HUF does not aris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee on 07.06.2001 and seized incriminating documents regarding the assessee doing the money-lending business. A notice was issued calling upon the assessee tofile his returns. The assessee filed NIL income stating that he does not have the taxable income. He also contended that the HUF was doing the business in money-lending and not in his individual capaicty. Accordingly, a notice was issued to the HUF. Objections have been filed stating that the HUF is dissolved as per the family arrangement entered into on 01.06.2001. No income tax can be levied on disrupted HUF. The assessee has stated that he has suffered huge loss in the business of money lending and he could not recover any amount advanced. The Finance Corporation where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trary to law. No tax can be levied on a disrupted joint family. The said order was confirmed by the First Appellate Authority mechanically. Much prior to the search of the premises, the memorandum of family arrangement was entered into between the parties. The said memorandum of Family Arrangement need not be registered. The judgment reported in (1966)2 SCJ 209 in the case of THILAK BAHADDUR BHUJIL v/s DEBI SINGH BHUJIL ANDOTHERS, the Hon'ble Supreme Court held that the family arrangement can be arrived orally. Its terms may be recorded inwriting as a memorandum of what had been agreed upon between the parties. The memorandum need not be prepared for the purpose of being used as a document on which, future title of the properties be fou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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