C I T KOTA vs. H H MAHARAO BHIM SINGH

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B.INCOME TAX APPEAL No. 595 / 2009 C I T KOTA ----Appellant Versus H H MAHARAO BHIM SINGH ----Respondent D.B.INCOME TAX APPEAL No. 597 / 2009 C I T KOTA ----Appellant Versus H H MAHARAO BHIM SINGH ----Respondent D.B.INCOME TAX APPEAL No. 600 / 2009 C I T KOTA ----Appellant Versus H H MAHARAO BHIM SINGH ----Respondent D.B.INCOME TAX APPEAL No. 253 / 2011 C I T KOTA ----Appellant Versus H H MAHARAO BHIM SINGH ----Respondent D.B.INCOME TAX APPEAL No. 604 / 2009 C I T KOTA

----Appellant Versus H H MAHARAI BHIM SINGH ----Respondent __________________________________________ For Appellant : Ms. Parinitoo Jain For Respondents : Mr. P.K. Kasliwal __________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE DINESH MEHTA Judgment Per Hon'ble Jhaveri, J. 14/12/2016 1. All these appeals are arising out of the order of the Tribunal whereby the tribunal has decided the issue against the department. Since the appeals raise identical questions of law and facts, hence are decided by this common judgment. 2. While admitting the appeals, this Court has framed following substantial questions of law: “ Whether in the facts and circumstances of the case the ITAT was justified in law in directing to adopt the status of the assessee as an “individual” and not as “HUF” as taken by Assessing Officer in the light of provisions of Section 27(ii) of Income Tax Act and section 4, 5 & 6 of the Hindu Succession Act? (ii) Whether in the facts and circumstances of the case the ITAT was justified in holding assessee entitled for exemption u/s 10(19A) treating entire palace in occupation despite of the fact that part of the palace was let out and as such it cannot be said that entire palace was in occupation of ex- ruler? (iii) Whether in the facts and circumstances of the case the ITAT was justified in law in

restricting the disallowance of expenses of court cases, office expenditure etc. without appreciating the same were excessive and unreasonable and the assessee has failed to furnish details and proved genuineness and commercial expediency of such expenses and as such were not allowable u/s 37 or 57 or 58 of the Act?” 3. The facts of the case are that assessee HUF filed its return of income on 30.03.2005 declaring total income at Rs.43,83,083/-. A note has also been given at bottom of the acknowledgment of the return that “As per special provisions of IT & WT Acts, the return is being filed in ‘Individual’ status. Late HH Maharao Bhim Singhji of Kota was the Ruler of the erstwhile Kota State before its merger into the Union of India. Maharao Bhim Singhji expired in the year 1991. After his death the HUF is shown to have come into existence and assessee has filed returns in HUF status in earlier years but as stated above now status is being claimed as of ‘Individual’. In the return major sources of income for the year of the HUF are shown to be the money received from ITC Ltd. For conversion of the Palace into Hotel at Rs.17,22,316/- and interest income. Besides this, income on account of long term capital gain, dividends and rental income from letting out of the Ummed Bhawan place land and other small superstructures has also been shown. But the assessee did not offer any income on account of compensation received/accrued for the land requisitioned by the defence authorities on the pretest that it is exempt u/s.10 (19A) of the IT Act. However, while finalising assessment proceedings for earlier years additions on this account has been made to the total income of the assessee.

The return was processed u/s 143(1) of the IT Act 1961 on 30.08.2005 at the declared income. Subsequently, notice u/s 143(2) was issued on 18.10.2005 fixing the date of hearing for 28.10.2005. In response to this notice, adjournment was sought by the assessee. Vide this office query letter dated 05.10.2006 the asssessee was asked to furnish various details in connection with income declared by the assessee. 4. Identical issue in the case of same assessee was pending before the Supreme Court by way of Civil Appeal No.2812/2015 whereby recently in the decision of the Supreme Court rendered on 05.12.2016, it has been held that the income which has been earned by the former ruler as his income from the requisition of the property is not taxable and in view thereof, the question No.(iv) in relation to taxability of income on requisitioned property is covered by the decision of the Supreme Court. 5. Consequently, the other questions which are framed with regard to section 147 and 148 of the Act in our view have been rendered academic inasmuch as the income which has been derived by the assessee is not taxable and no fruitful purpose would be served by examining the issue. In that view of the matter, the appeals deserve to be dismissed. 6. The appeals are dismissed. A copy of the judgment be placed in each of the file. (DINESH MEHTA)J. (K.S. JHAVERI)J. /bm gandhi 115, 126, 127, 130, 604/2008