AMARCHAND HUF,JAIPUR vs. ITO, JAIPUR

PER SH. VIKRAM SINGH YADAV, A.M.

This is an appeal filed by the assessee against the order of ld. CIT(A)- III, Jaipur dated 21.03.2016 wherein the assessee has taken the following grounds of appeal:

“1. That on the facts and in the circumstances of the case, the

Learned Assessing Officer as well as Learned CIT(A)-III, Jaipur

have grossly erred in treating Sh. Amarchand HUF as sole owner

of agricultural land so sold, whereas the name of Sh. Amarchand

was removed from Jamabandhi on his death. The land was

inherited by the wife of Sh. Amarchand & his four sons. Thus

ITA No. 490/JP/2016 M/s Amarchand HUF Vs. ITO ward 7(2), Jaipur question of land belonging to Sh. Amarchand does not arise.

Thus assessment completed in the name of Sh. Amarchand HUF

& confirmed by the Learned CIT(A) deserves to be quashed.

erred in law as well as in facts in completing assessment u/s

147/143(3) of the I.T. Act, 1961 in the status of HUF of M/s

Amarchand and also confirmed by the Learned CIT(A)-III, Jaipur,

whereas the sale proceed of agricultural land belonged to

respective HUF of Sh. Babulal, Sukhdev, Ganpat Lal, Netrapal &

Smt. Chunni Devi and as such assessment so completed deserves

to be cancelled.

Assessing Officer Ward 7(2), Jaipur has grossly erred in

completing assessment u/s 147/143(3) of the I.T.Act, 1961 in the

status of HUF of Late Sh. Amarchand & confirmed by the Learned

CIT(A)- III, Jaipur, whereas after death of Sh. Amarchand, the

name of Sh. Babulal, Sukhdev, Ganpat Lal, Netrapal & Smt.

Chunni Devi have been entered in the Jamabandhi on 14.05.1996

& name of Late Sh. Amarchand was removed. Therefore the

agricultural land so sold belonged to respective HUF of Sh.

Babulal, Sukhdev, Ganpat Lal, Netrapal & Smt. Chunni Devi in her

ITA No. 490/JP/2016 M/s Amarchand HUF Vs. ITO ward 7(2), Jaipur individual capacity. Thus assessment completed in the name of

M/s Amarchand (HUF) deserves to be cancelled.

Learned Assessing Officer Ward 7(2), Jaipur has grossly erred in

treating the two sale proceed of agricultural land at Rs.

19875000/- (15778000 + 4097000) belonged to M/s Amarchand

HUF & confirmed by the Learned CIT(A)-III, Jaipur, whereas the

sale proceeds had been received by the respective HUF of Sh.

Babu Lal, Sukhdev, Ganpat Lal, Netrapal & Smt. Chunni Devi in

her individual capacity and also accepted by the Sub-Registrar,

Sanganer, Distt. Jaipur as per details given below. Had there

been any doubt about share received by the respective HUF, the

Sub-Registrar would not have registered the documents.

Sr.No. Name of the Seller Sale deed Dated Sales deed Dated Total Sales Proceed 28.01.2006 28.01.2006 1. Sh. Babu Lal 3155600.00 819400.00 3975000.00 2. Sh. Sukhdev 3155600.00 819400.00 3975000.00 3. Sh. Ganpat Lal 3155600.00 819400.00 3975000.00 4. Sh. Netrapal 3155600.00 819400.00 3975000.00 5. Smt. Chunni Devi 3155600.00 819400.00 3975000.00 15778000.00 4097000.00 19875000.00 Thus assessment completed in the name of M/s Amarchand HUF

deserves to be cancelled.

ITA No. 490/JP/2016 M/s Amarchand HUF Vs. ITO ward 7(2), Jaipur 5. That on the facts and in the circumstances of the case, the

learned Assessing Officer Ward 7(2) Jaipur has totally over ruled

on the findings of the Learned CIT(A)-III, Jaipur as well as

Hon’ble Members of ITAT Bench, Jaipur and confirmed by the

Learned CIT(A), Jaipur, whereas the than Hon’ble CIT(A)-III,

Jaipur had held that agricultural land, undisputedly belonged to

the HUF and not to the appellant in his capacity as an individual.

Therefore assessment completed in the name of M/s Amarchand

HUF deserves to be quashed.

Learned Assessing Officer Ward 7(2), Jaipur has wrongly

determined that no division of Khasara No. was made in revenue

records, whereas the name of the five persons viz Sh. Babu La.,

Sukhdev, Ganpat Lal, Netrapal & Smt. Chunni Devi have been

mentioned and according to these facts, while executing sale

deed of agricultural land, the sellers had been received their

equal shares of money by way of bankers cheque. Therefore, the

Learned Assessing Officer Ward 7(2), Jaipur has wrongly

completed assessment u/s 147/143(3) of the I.T.Act, 1961 in the

name of M/s Amarchand HUF and confirmed by the Learned

CIT(A), Jaipur, whereas Sh. Amarchand was expired long back

i.e. on 15.05.1995 and land in question was inherited by Smt.

ITA No. 490/JP/2016 M/s Amarchand HUF Vs. ITO ward 7(2), Jaipur Chunni Devi wife of Late Sh. Amarchand & his four sons & their

names were entered in jamabandhi on 14.05.1996. Therefore

the assessment so completed is contrary to the facts on record,

hence deserves to be cancelled.”

26 of village Thikariya, and land at Khasra No.380, 391, 406 of village

Prithvisinghpura alias Naiwala was jointly sold by Sh. Sukhdev S/o Late

Amarchand, Smt. Chunni Devi w/o of Late Sh. Babu Lal, Ganpat lal and

Netrapal, all sons of Late Amarchand, during the year under consideration.

The assessment proceedings in cases of Smt. Chunni Devi, Sukhdev and Babu

lal were completed in the individual capacities by the Assessing Officer. These

individual cases were taken up in appeal before the ld CIT(A) and thereafter,

before the Coordinate Bench during the appellate proceedings. It was argued

in those appellate proceedings that the agricultural land sold was ancestral

land and inherited by the individual appellants from Late Amarchand who had

inherited the same from his father Sh. Nand Ram and the agricultural land

thus belongs to the HUF and not to the individual appellants. The said

contentions of the individual appellants were accepted and the relevant

findings of the Coordinate Bench in case of Sh. Shukh dev, son of Late

Amarchand in ITA No. 747/JP/2010 dated 25.03.2011 is as under:

“8. After considering the orders of the AO and ld. CIT(A) and written

submissions of the assessee, we find no infirmity in the finding of ld. CIT(A). 5

ITA No. 490/JP/2016 M/s Amarchand HUF Vs. ITO ward 7(2), Jaipur Findings of ld. CIT(A) have been recorded in para 2.4 at pages 4 & 5 of his

order are as under:-

“ 2.4. I have carefully considered the facts of the case and submissions of ld.

A/R. I have also gone through the various details/documents filed by the ld.

A/R in support of his submissions and the remand report thereon received

from the ld. AO. On perusal of the same, it is seen that the source of the

deposits of Rs. 39,75,000/- on 8.2.2006 in the appellant’s bank account was the 1/5th share out of the sale proceeds of the agricultural land sold by the

appellant, along with his mother and three brothers (as detailed in para 2.2.1

above) and the said agricultural land, undisputedly, belonged to the HUF and

not to the appellant in his capacity as an individual. Further, I find that the

amount of Rs. 8,19,400/- in respect of which the ld. AO has made a separate

addition of Rs. 8,14,200/-as long term capital gain, was included in the

aforesaid amount of Rs. 39,75,000/- which was deposited on 8.2.2006, in the

appellant’s bank account. Therefore, on these facts, both the additions i.e. of

Rs. 39,75,000/- and of Rs. 8,14,200/- are not sustainable in the appellant’s

case. Consequently, the AO is directed to delete those additions. However,

as mentioned earlier, there is no dispute regarding the fact that the

agricultural land sold, in question, belonged to the HUF (of the appellant and

his mother and three brothers) and, therefore, the AO may like to examine

the possibility of taxing the long term capital gains arising, on account of sale

of aforesaid agricultural land, in the hands of the concerned HUF.”

ITA No. 490/JP/2016 M/s Amarchand HUF Vs. ITO ward 7(2), Jaipur These findings are findings of fact which do not require any interference,

therefore, the order of ld. CIT(A) is liable to be confirmed. For the sake of

clarification, the ground of the department in accepting additional evidence is

liable to be rejected as the ld. CIT(A) has accepted the additional evidence by

affording reasonable opportunity to the AO and the AO has fairly accepted

that the claim of assessee is reasonable. Therefore, we do not understand

why this ground is raised by the department. With this observation, the order

of ld. CIT(A) is confirmed.”

Babu Lal s/o Late Amarchand in ITA No. 770/JP/2010 dated 13.04.2011.

the ld. CIT(A) that the agricultural land in question which has been sold

belongs to the HUF consisting of Sh. Sukh dev and his mother and 3 brothers

and it has been confirmed by the Coordinate Bench that AO make like to

examine the possibility of taxing the long term as capital gains arising on

account of sale of the aforesaid agricultural land in the hands of the

concerned HUF consisting of Sh. Sukh dev and his mother and 3 brothers.

Coordinate Bench, the assessment in case of the HUF (known as M/s

Amarchand HUF) was take up by issuance of notice u/s 148 and thereafter

the assessment was completed u/s 147 r.w.s 143(3) of the Act.

ITA No. 490/JP/2016 M/s Amarchand HUF Vs. ITO ward 7(2), Jaipur 6. During the course of assessment proceedings, the AR of the assessee

submitted before the AO a copy of death certificate of late Sh. Amarchand

and submitted that Sh. Amarchand who has expired on 15.5.1995 has no

occasion to sell the agricultural land during the subject year under

consideration and subject proceedings initiated against Late sh Amarchand

deserves to be dropped. In our view, it is here that the confusion has arisen

in the mind of the appellant. The assessment proceedings has been initiated

in the hands of HUF known as Amarchand HUF and has not been initiated in

the individual capacity of late Sh Amarchand. Here, we refer to the

observation of the Assessing Officer who has rightly appreciated the concern

rather confusion of the appellant as noted above and his findings are as

under:

“The reply of the A/R of the assessee has been considered carefully. The

contention that the land was not sold by Sh. Amarchand in the year 2005-06

has no debate as Sh. Amarchand had passed away in the year 1995. The A/R

himself accepted that the land was sold by Sh. Babu Lal Verma along with his

three brothers and his mother Smt. Chunni Devi and this land was their

ancestral HUF agricultural land.

and was in possession of their father Sh. Amarchand and who also inherited

this property from his father Sh. Nandu Ram, hence it is clear that the land in

question was the inherited property of M/s Amarchand HUF. After the death 8

ITA No. 490/JP/2016 M/s Amarchand HUF Vs. ITO ward 7(2), Jaipur of Sh. Amarchand as no physical division of the land in question was made

amongst the coparceners i.e. Sh. Sukhdev (S/o late Sh. Amarchand) & Sh.

Chuni Devi (W/o late Sh. Amarchand), Sh. Babu lal, Sh. Ganpat lal and Sh.

Netrapal (all sons of late Sh. Amarchand) although the Namantaran of the

land in question was made in the revenue record but specific division of

Khasra (s) in respect of this land was not made and all the Khasras were

combindly owned by all the sellers. As no physical division of the land was

made, the same remains the property the combined HUF of all the sellers i.e.

four brothers and their mother i.e. M/s Amarchand HUF. Further, no evidence

in respect to any division of M/s Amarchand HUF was submitted, hence in the

light of above facts it is held that the land bearing Khasra number(s) 13 to 18,

25 to 26, 380, 391, 406 of village Thikariya and Prithvisinghpura alias Naiwala

was actually the property of M/s Amarchand HUF which were sold by all the

members of the HUF combined after the death of Sh. Amarchand.”

property continues to a property belonging to the HUF and since there is no

partition of HUF and as the same has been sold jointly by all the surviving

members of the HUF, the same was subject to hands in the hands of the HUF.

The HUF which is brought to tax is represented by Karta Sh. Sukhdev and

consisting of other members namely Smt Chuni Devi, Sh. Babulal , Jeevanal

and Netrapal. Though the HUF is still called and represented as Amarchand

HUF but after his death, he was no more (and could not be) the karta/

ITA No. 490/JP/2016 M/s Amarchand HUF Vs. ITO ward 7(2), Jaipur coparcener/member of the HUF. We do not see any infirmity in the order

passed by the AO.

under challenge before us which are contained at para 4.3 of her order which

is reproduced as under:

“4.3 I have carefully considered the facts of the case, findings of the

AO and submission of the appellant. All grounds of appeal are relating to

issue relating to completion of assessment in name of Amarchand HUF liable

to be taxed for capital gain on sale of ancestral land having capital gain of Rs.

19744130/-.

In this case originally the order was passed in the name of individuals-

3.Sukhdev

4.Chunnidevi

5.Netrapal

In the case of Sukhdev etc., CIT(A) held that subject land belonged to HUF.

Since it is inherited from forefathers. These orders were confirmed by ITAT

with direction that AO can take remedial action in hands of HUF as per law.

ITA No. 490/JP/2016 M/s Amarchand HUF Vs. ITO ward 7(2), Jaipur Accordingly the AO reopened case of Amarchand HUF by issuing notice.

Amarchand HUF was the owner of the land and all the individuals stated

above being coparceners and HUF members. On the death of Amarchand,

the eldest son Sukhdev became Karta.”

“Therefore, it is clear that land was not partitioned. No mutation was made.

All are jointly holding the land inherited through farthers HUF. Therefore

completion of assessment in hands of Amarchand HUF is hereby held as

proper in accordance with order of Hon’ble ITAT, Jaipur. Action of the AO is

therefore upheld. “

dated 02.12.2016signed by Mr. Narendra Kr. Goswami, Advocatewas

submitted at the Registry and which have been duly considered by us. In its

written submission, it is noted that the assessee has reiterated it contention

which have been raised before the lower authorities. The Ld. AR submitted

that the name of Sh. Babu Lal, Sukh dev, Ganpat Chand, Netrapal and Smt.

Chunni Devi were entered in Jamabandhi on 14.05.1995 and name of Late Sh.

Amarchand was removed from the Jamabandhi and therefore, the question of

land belonging Sh. Amarchand does not arise. It was further submitted that

from the perusal of the sale deeds, it is revealed that name of Late Sh.

Amarchand HUF has not been mentioned in the sale deed as the seller

whereas name of Sh. Babu Lal along with their 3 brothers and name of Sh.

Chuni Devi have been mentioned as the seller of the agricultural land and the 11

ITA No. 490/JP/2016 M/s Amarchand HUF Vs. ITO ward 7(2), Jaipur sale proceeds have also been received through cheques by Sh. Babu Lal and

his brother as well as his mother Sh. Chuni Devi. It was further submitted

that the agricultural land so sold belonged to the respective HUF consisting of

Sh. Babu Lal, Sh. Sukh dev, Sh. Ganpat Chand, Sh. Netrapal, Sh. Chuni Devi

and the assessment in the name of Late Sh. Amarchand HUF has been framed

incorrectly and wrongly confirmed by CIT(A). It was further submitted that

the status of Sh. Babu Lal and Sukh devas that of HUF has already been

confirmed by the ITAT, Jaipur Bench vide order dated 25.3.2011 in ITA No.

770/JP/2010.

submission filed by the ld. AR and other material available on record. As we

have noted above, the Assessing Officer has not disputed the fact that Sh.

Amarchand had expired on 15.05.1995 and there was no occasion to sell the

land by him in his individual capacity. It is also not in dispute that the land

was sold by Sh. Babu Lal along with his 3 brothers and his mother Smt.

Chunni Devi. The Coordinate Bench in its order dated 25.03.2011 has given a

finding of fact which has not been disputed by the either side and in fact the

said decision of the Coordinate Bench has been relied upon by both the

parties. As noted above, the Coordinate Bench has confirmed the finding of

fact as given by the ld. CIT(A) that the agricultural land sold in question

belonged to the HUF consisting of Sh. Sukhdev and his mother and 3 12

ITA No. 490/JP/2016 M/s Amarchand HUF Vs. ITO ward 7(2), Jaipur brothers. Therefore, what has been sold was ancestral agricultural land which

belongs to the HUF and it has been brought to tax in the hands of HUF after

the death of Sh. Amarchand. There is no partition of HUF and there is no

finding of any partition given by the Assessing Officer u/s 171 of the Act.

After the death of Sh. Amarchand, HUF continues to exists and represented

by his elder son Sukh dev who became the Karta of HUF and the other

coparceners are Smt. Chunni Devi wife of Late Sh. Amarchand, and Sh. Babu

Lal, Sh. Ganpat lal and Sh. Netrapal, all sons of Late Sh. Amarchand.

Thoughthe HUF is still known as M/s Amarchand HUF, in essence, it is the

HUF which consists of Sh. Sukh dev as Karta and coparceners are Smt.

Chunni Devi, Sh. Babu Lal, Sh Ganpat lal and Sh. Netrapal. The assessment,

therefore, has rightly been done in the name of HUF consisting of above said

persons. In light of above, we do not see any infirmity in the order of the

Assessing Officer in bringing to tax the long capital gains arising on account of

sale of agricultural land in the hands of the HUF consisting of Sh. Sukh Dev,

Smt Chunni Devi, Sh. Babu Lal, Sh. Ganpat lal and Sh. Netrapal.

In the result, the appeal filed by the assessee is dismissed.

Order pronounced in the open court on 31/03/2017.

Sd/- Sd/-

(KUL BHARAT) (VIKRAM SINGH YADAV) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member 13

ITA No. 490/JP/2016 M/s Amarchand HUF Vs. ITO ward 7(2), Jaipur

Jaipur Dated:- 31/ 03/2017. *Ganesh आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू

vkns'kkuqlkj@ By order,

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत