RAMASWAMYNAIDU VELLORE, TIRUPATHI,HYDERABAD vs. ACIT,CIRCLE- 1(1), TIRUPATHI, TIRUPATHI

PDF · subscribers
ITA 1754/HYD/2016Status: DisposedITAT Hyderabad23 May 2018AY 2011-124 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that there was no mistake apparent from the record to justify rectification under Section 154. The Tribunal found no evidence that the agricultural land was owned by the assessee in his individual capacity, and the paper book indicated the income was earned by the HUF.

What were the facts?

The Assessing Officer sought to rectify an assessment order to include agricultural income of Rs. 5 lakhs for tax calculation purposes, arguing it was shown in the assessee's individual balance sheet. The assessee contended the land belonged to the HUF and the income was not his individual income.

What were the issues?

Whether agricultural income shown in an individual's balance sheet, but claimed to be HUF income from ancestral property, can be considered for tax rate purposes in the individual's assessment via rectification.

Which sections of the Income-tax Act were involved?

Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES

Before: SHRI D. MANMOHAN & SHRI B. RAMAKOTAIAH

For Appellant: Shri S. Rama Rao
For Respondent: Smt. Komali Krishna, DR
Hearing: 17.05.2018Pronounced: 23.05.2018

IN THE INCOME TAX APPELLATE TRIBUNAL, HYDERABAD BENCHES CIRCUIT BENCH “A” AT TIRUPATI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA. Nos. 1754/Hyd/2016 (A.Y.2011-2012) V. Ramaswamy Naidu, Vs ACIT, 8-124, M.R. Palli Road, Circle-1(1), New Balaji Colony, Tirupati. Tirupati. PAN: AATPV 9826 E Appellant Respondent Assessee by Shri S. Rama Rao Revenue by Smt. Komali Krishna, DR Date of hearing 17.05.2018 Date of pronouncement 23.05.2018 ORDER PER D. MANMOHAN, VP: This appeal by the assessee is directed against the order passed by CIT (A), Tirupati and it pertains to A.Y. 2011-2012. Following grounds were urged before us:

“1. The Order of the Ld. CIT(A) is erroneous both on facts and in law. 2. The Ld. CIT(A) erred in holding that there is any mistake in the assessment order which can be rectified u/s 154 of the I.T. Act. 3. The Ld. CIT(A) erred in confirming the action of the Assessing Officer in considering the agricultural income of Rs. 5,00,000/- of the HUF for the purpose of determining the tax payable of the individual. 4. The Ld. CIT(A) ought to have considered the fact that the agricultural income does not belong to the appellant and the same cannot be considered for the purpose of determining the tax in the assessment of the individual.” 2. Facts necessary for the disposal of the appeal are set out in brief. The assessee is a Civil contractor. For the year under consideration, he

has declared an income of Rs. 24,43,350/-. In the scrutiny assessment, the Assessing Officer made certain additions and completed the assessment on a total income of Rs. 27,15,210/-. Assessment was accordingly completed on 16.08.2013. However, the Assessing Officer sought to rectify the said order on the ground that the agricultural income shown by the assessee for tax calculation purposes was not offered to tax. The case of the Assessing Officer was that balance sheet as on 31.03.2011 shows that he was in possession of agricultural land at Kothakandriga Village, Ramachandrapuram Mandal and derived agricultural income of Rs. 5 lakhs during the year under consideration. In response to the show-cause notice, the assessee contended that the agricultural land belongs to the forefathers and hence it is the property of HUF and any income therefrom cannot be assed to tax in the individual capacity.

3.

The Assessing Officer rejected the contention of the assessee mainly on the ground that the assessee “showed the agricultural land in his individual balance sheet”. Therefore, he has taken the agricultural income of Rs. 5 lakhs for rate purposes in the order passed u/s 154 of the Act.

4.

Ld. CIT(A) having affirmed the order of the A.O., the assessee is in appeal before the Tribunal.

5.

Learned Counsel for the Assessee adverted our attention to the balance sheet as on 31.03.2011 and capital account abstract to show that it was never treated as the individual asset of the assessee. Page 5 of the paper book shows that the agricultural income is stated to have been earned by HUF since it was categorically stated that the land in question is inherited from the forefathers and they belong to HUF, agricultural income therefrom cannot be clubbed in the hands of the

assessee for calculation of income tax. In this regard, he has filed Pattadar Pass Book etc., to prove that the land is ancestral in nature. For the A.Y. 2011-12 assessment was completed u/s 143(3) of the Act. Learned Counsel for the Assessee submits that in the absence of any proof that the land was owned by the assessee in his individual capacity, rectification of assessment made originally, merely on the basis of entry in the balance sheet, is not justified, particularly on account of the fact that there is no mistake apparent from the record.

6.

We have also heard the Learned Departmental Representative in this regard and carefully perused the record. There is nothing on record to suggest that the agricultural land was owned by the assessee in his individual capacity. In fact even in page 5 of the paper book, which is the basis for making addition, assessee categorically stated that HUF earned agricultural income. All these papers are already available on record. Therefore, neither there is a mistake apparent from record nor there is a justification in taking the same income for rate purposes in the hands of individual. We therefore set aside the order passed u/s 154 of the of the Act.

7.

In the result, appeal filed by the assessee is allowed. Order pronounced in the open court on 23rd May, 2018.

Sd/- Sd/- (B. RAMAKOTAIAH) (D. MANMOHAN) ACCOUNTAT MEMBER VICE PRESIDENT

Hyderabad , Dated: 23rd May, 2018. OKK, Sr.PS

Copy to 1. Sri S. Rama Rao, Advocate, Flat No.102, Shriya’s Elegance, 3-6-643, Street No. 9, Himayat Nagar, Hyderabad – 500 029. 2. Asst. Commissioner of Income Tax, Circle-1(1), Aayakar Bhavan, K.T. Road, Tirupati. 3. CIT(A), Tirupati. 4. Principal Commissioner of Income Tax, Tirupati. 5. DR, ITAT, Hyderabad. 6. Guard File.

More judgments on Section 154

All 8,676 judgments and leading authorities on Section 154 →

Recent GST High Court judgments

Search GST case law →