BHOPAL SINGH SHEKHAWAT S/O SHRI CHATRAPAL SINGH SHEKHAWAT vs. INCOME TAX OFFICER

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ITA/52/2019HC RajasthanRJHC02035735201916 September 2019Author: S. RAVINDRA BHAT,PRAKASH GUPTA2 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that no question of law arose from the concurrent findings of the lower appellate authorities. Regarding the addition under Section 68 (₹16,56,000/-) for cash received but not reported, the assessee had the primary onus to prove the genuineness and creditworthiness of the borrowed amounts from existing parties. The materials on record indicated that the assessee failed to produce sufficient materials to convince the revenue authorities on at least two of the three required ingredients. As for the HUF-owned property, the Tribunal noted that the family settlement pertained to ancestral property of the assessee's father. Upon division, the share falling to the assessee became his individual property, consistent with the Supreme Court's judgment in Commissioner of Wealth Tax Vs. Chander Sen. Therefore, the inferences drawn by the lower appellate authorities were not illegal. No interference was called for, and the appeal was dismissed.

What were the facts?

The assessee, Bhopal Singh Shekhawat, filed an appeal before the Rajasthan High Court against an order passed by the Income Tax Appellate Tribunal (ITAT). The assessment year in question is 2008-09, with reassessment proceedings initiated under Section 148/149 of the Income Tax Act, 1961. The Assessing Officer made additions to the assessee's income, which were partially relieved by the CIT(A) and ITAT. The appeal challenges findings related to long-term capital gains of ₹5,33,720/- and an unexplained credit of ₹16,56,000/- under Section 68. The assessee contended that properties were HUF properties and no PAN was required at the time, and that the credit under Section 68 was supported by affidavits and additional evidence.

What were the issues?

1. Whether the Tribunal erred in law by confirming the addition of ₹5,33,720/- as long-term capital gain to the assessee's income, considering the property transactions were related to HUF properties and a family settlement? - Assessee's contention: The properties were HUF properties, and at the relevant time, there was no requirement to report them for income tax purposes or obtain a PAN. The property in question fell to the assessee's share through a family settlement on 01/05/2001, and he held it on behalf of the HUF as Karta. - Revenue's contention: Not recorded. 2. Whether the Tribunal erred in law by confirming the addition of ₹16,56,000/- as an unexplained credit under Section 68 of the Income Tax Act, 1961? - Assessee's contention: Relevant documents, including three affidavits, were produced before the Assessing Officer, and additional evidence was adduced at the appellate stage. The inferences drawn by lower appellate authorities were incorrect. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 68,Section 148,Section 149,Section 260A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No.52/2019 Bhopal Singh Shekhawat S/o Shri Chatrapal Singh Shekhawat, Aged About 69 Years, R/o 6, Bhartendu Nagar, Khatipura, Jaipur ----Appellant Versus Income Tax Officer, Ward-1(4), New Central Revenue Building, Statue Circle , Jaipur ----Respondent For Appellant(s) : Mr. Gunjan Pathak For Respondent(s) : HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE PRAKASH GUPTA

Judgment 16/09/2019

1.

Two questions of law urged in this appeal are with respect to firstly the long term capital gain, added the assessee and brought to enhanced tax, to the extent of 5,33,720/- and ₹ secondly an explained credit brought to tax under Section 68 of the Income Tax Act, 1961 to the tune of 16,56,000/-. ₹

2.

The assessee’s income for the assessment year 2008- 09 in the present case was re-assessed under Section 148/149 of the Act. After considering the Return, the assessing officer brought the amount to various taxes. In appeals, the CIT(A) and ITAT yielded some relief; the additions with respect to two plots, made by the assessing officer, were remanded for verification. The assessee urges under Section 260A that the findings whereby amounts were brought to tax in his hands, in respect to property transactions are erroneous.

3.

It is argued that the properties were HUF Properties and at the relevant time there was no requirement of reporting them for income tax purposes. Learned counsel also highlighted in 2008 that there was no legal requirement to obtain a PAN registration. Counsel highlighted that the property in question fell

(2 of 2) [ITA-52/2019] to the share of the assessee through a family settlement on 01/05/2001, he held on behalf of HUF as a karta. As far as the second issue with regard to the addition made under Section 68 is concerned, learned counsel submitted that the relevant documents with regard to the credits obtained from four parties – in the form of three affidavits were produced before the assessing officer, who chose not to believe them. It was further submitted that additional evidence was adduced under Rule 46A at the appellate stage. Learned counsel submitted that the inferences drawn by the lower appellate authorities are incorrect in law.

4.

The findings with respect to the two issues highlighted by the appellant are concurrent. The addition made under Section 68 (of 16,56,000/-) was in regard to cash amount received by ₹ the assessee but not reported in assessment in the Returns. Clearly, the assessee was under a duty to discharge the primary onus that lay upon him that the amounts, reflected a genuine transaction and were borrowed from existing parties which was creditworthy. The materials on record show that of these three ingredients that atleast in regard to two ingredients assessee could not produce sufficient materials to convince the revenue authorities.No question of law therefore arises.

5.

As regards the plea advanced by the assessee regarding the HUF owned property, it is noticeable that the family settlement was in respect to the property owned by the assessee’s ANIL KUMAR GOYAL /33

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