ITO, REWARI vs. MOOL CHAND HUF, REWARI

ORDER PER O.P. KANT, AM:

This appeal by the Revenue is directed against order dated 16/05/2016 passed by the learned Commissioner of Income Tax (Appeals), Rohtak (Haryana) [in short ‘the Ld. CIT(A)’] for assessment year 2006-07 raising following grounds:

1. CIT(A) has erred in law in deleting the addition of Rs.8,89,12,500/- made by the AO on account of Long Temr Capital Gain, accepting the plea of the assessee that the protective assessment in the name of all co-owners in their individual capacity have been made and confirmed by the CIT(A). The CIT(A) has deleted the addition without appreciating the fact that the land sold was ancestral and belongs to Mool Chand, HUF. Appeal against the orders of the CIT(A) in case of co-owners in their individual capacity are also pending before the Hon’ble ITAT.

2. We have heard rival submission of the parties on the issue in dispute, who appeared through Video Conferencing facility and filed various documents electronically. 2.1 Brief facts of the case are that Late Sh. Moolchand owned an agricultural land which was situated in municipal limits of Dharuhera (Haryana). An formation was received by the Income Tax Department that said land was sold by five persons, namely, Smt. Shanti Devi, Sh. Ajit Singh, Sh. Sunil Kumar, Smt. Shashi Bala and Smt. Savita Devi. The Assessing Officer was of the view that after the death of Sh. Moolchand, the land existed in the name of Sh. Moolchand HUF, therefore he reopened the case of the assessee i.e. Moolchand HUF by way of issue of notice under section 148 of the Income-tax Act, 1961 (in short ‘the Act’) and assessed the capital gain on transfer of the land in the hands of Moolchand HUF on substantive basis. The Assessing Officer also assessed the said capital gain in the hand of five individuals i.e. sons and daughter of late Sh. Moolchand on protective basis. The five individuals along with the assessee filed appeal before the Ld. CIT(A). The Learned CIT(A) treated the income on transfer of land on substantive basis in the hands of five individuals and deleted the addition in the hands of the assessee, holding that no double addition can be made for the same transaction.

2.2 Before us, learned Counsel of the assessee submitted that Revenue has not preferred any appeal against the order of the Learned CIT(A) in the case of the five individuals where income on transfer of the land has been assessed on substantive basis and therefore now the Revenue is not justified in seeking assessment of the same income in the hands of the Moolchand HUF on substantive basis. The learned Counsel also submitted that at the time of the transfer of land, the land was duly recorded in the name of the five individuals in the Land Revenue records and they have transferred their individual share in the land to the buyer and therefore assessment of same transaction in the hands of the assessee, i.e., the Moolchand HUF is without any evidence of ownership in the hands of HUF and merely based on imagination of the Assessing Officer. During the hearing of appeal before us, the learned DR was directed, to confirm this fact and file grounds of appeal

, if any such appeals have been preferred by the Revenue in the case of those five individuals. Despite repeated opportunities the Ld. DR failed to provide details of any such appeals filed by the Revenue. These five individuals have only filed appeal challenging the addition of long-term capital gain on merit only and substantive nature has not been challenged. In one such appeal in the case of Smt. Savita D/o Moolchand in for assessment at 2006-07, the Tribunal allowed the ground challenging validity of the re-assessment. The relevant finding of the Tribunal (supra) is reproduced as under:

9. Be that as it may, the fact remains that in both the sets of reasons, there is a reference to the substantive assessment that was in the hands of Mool Chand, HUF and it is only consequent thereto the protective assessment was said to be made in the hands of the