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TMI Blog1987 (12) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... 25-10-1973. Thereafter, on 12-7-1974 there was a partial partition as a result of which the assessee received a sum of Rs. 5,000 and separated from the HUF. According to the provisions of section 64(2) (c) as amended by the Taxation Laws (Amendment) Act, 1975, it is quite clear that where a converted property has been the subject-matter of partition amongst the members of the family, the income derived from such converted property as is received by the spouse or minor child from assets transferred indirectly by the individual to the spouse or minor child and the provisions of section 64(1) shall apply. Accordingly, income from the converted house property has to be assessed in the assessee's hands. The assessee's representative's contention that the provisions of section 64(2) are not applicable to the assessee as he is no longer member of the HUF has no merit and cannot be accepted. Similar inclusion of property income was made in the assessee's income for assessment year 1976-77 also. Therefore, income form house property which was taken in assessment year 1976-77 at Rs. 4,043 is included in the assessee's total income." 4. Consequent to the addition in respect of the income fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment records or connected records of the assessee under any other Act before making the assessment. In this view of the matter, I agree with the ITO that he had jurisdiction to reopen the assessment under section 147(a)'." As regards the addition/inclusion of property income, the learned CIT (A)'s findings are as under : "The plain reading of section 64(2)(a) & (2)(b) clearly indicates that the any conversion of individual's own property to the HUF has to be ignored and the income has to be taxed in the hands of the individual who impressed it with the character of HUF property. Here, the assessee was a member of the HUF after 31st December, 1969, at the time of impressing the property with the HUF character which was on 25-10-1973, individual was a member of the HUF, as such section 64(2) will have full impact in the present case. Thus, the ITO's action is taxable in the hands of the assessee under section 64(2)(c) by the same is taxable in view of the section 64(2)(a) and (2)(b). In this view of the matter, the appeals are dismissed." From the above findings, it is unequivocally clear that, the assessee had firm liability and obligation to show the property income of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Individual) and not in the hands of the HUF. Since.the HUF had returned the income from house property in its return, the ITO was left with no option but to assess it protectively. Similarly, property income shown by the HUF in A. Ys. 1977-78 to 1979-80 has been assessed by the ITO protectively. It is also clear from the material brought on record that the income from the house property was purposefully offered to be assessed in the hands of the HUF so as to evade full tax liability in his hands. In fact, the assessee was successful in his design to evade tax, when the original assessment for A. Ys. 1977-78 and 1978-79 were completed without addition of property income. This was possible, because the assessee omitted to furnish all the facts about the property income which were relevant for assessment of his income for these assessment years. Had there been no provision in the Income-tax Act, 1961 to reopen the assessment in such circumstances the loss to the Government would have been irretrievable. The facts and circumstances not only call for levy and recovery of tax which was rightly due to the Govt., but also to levy penalty under section 271(1)(c) so that the assessee is det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that an identical order be passed in the case of the present assessee as well and the imposition of penalties upheld. 10. These arguments of the D. R. were resisted vehemently by the learned counsel appearing on behalf of the assessee. According to him there was no doubt that the facts as brought out by the ITO in both these cases did appear to be identical, but he sought an opportunity to bring certain other relevant facts on record with a view to contend that the penalties in question were not imposable. According to him his endeavour would be to convince the Tribunal to depart from its earlier view taken in the case of Hasmukhlal C. Shah, as according to him, those appeals were argued without bringing relevant material on record and which he would be doing in the course of his arguments. 11. Faced with this situation, we proceed to hear the learned counsel of the assessee in support of his case. 12. It was first of all urged that the HUF originally consisted of the assessee, his wife and his major son. It was on 25th October, 1973 that the assessee, threw his self-occupied residential property into the hotchpotch of his HUF. It was further submitted that vide partition deed d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to him, the facts which had been stated by him were not so done in the appeals pertaining to the connected case of Hasmukhlal C. Shah. The learned counsel also referred extensively to his paper book in the course of his arguments and in support of the same. 14. The learned D. R., on the other hand, strongly supported the orders of the lower authorities. According to him, the decision of the Tribunal in the case of Hasmukhlal C. Shah, squarely applied. He went on to submit that since the facts were identical in these appeals there was no good ground to give a different decision in the assessee's case. He accordingly canvassed for the confirmation of the order of the CIT (A). 15. We have considered the rival contentions and perused the material on record. At the outset we may mention that the material placed before us in these appeals by means of a detailed paper book was missing in the connected case of Hasmukhlal C. Shah. This would be clear from a comparison of the documents filed in both the appeals as follows : In the case of Hasmukhlal C. Shah : (1) Order u/s. 271(1)(c) for A.Y. 1977-78 (2) Order u/s. 271(1)(c) for A.Y. 1978-79 (3) Order u/s. 271(1)(c) for A.Y. 1979-8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rowing it into the common stock of the family or been transferred by the individual, directly or indirectly, to the family otherwise than for adequate consideration (the property so converted or transferred being hereinafter referred to as the converted property), then notwithstanding anything contained in any other provision of this Act or in any other law for the time being in force, for the purpose of computation of the total income of the individual under this Act for any assessment year commencing on or after the 1st day of April, 1971, - (a) the individual shall be deemed to have transferred the converted property, through the family, to the members of the family for being held by them jointly; (b) the income derived from the converted property or any part thereof shall be deemed to arise to the individual and not to the family; (c) where the converted property has been the subject matter of a partition (whether partial or total) amongst the members of the family, the income derived from such converted property as is received by the spouse or minor child on partition shall be deemed to arise to the spouse or minor child from assets transferred indirectly by the individual ..... 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