TaxTMI 
TaxTMI 
1988 (3) TMI 138
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....tand that the said house was acquired by his HUF, the assessee filed returns of income in respect of the said family in the name and style of Smt. Shashirani, HUF, in respect of asst. yrs. 1979-80 & 1980-81 declaring therein incomes from two sources (i) income from dwelling house (ii) income from capital gains. Assessments for asst. yrs. 1979-80 and 1980-81 of the said family were taken up by the ITO, Survey Circle, Jabalpur, who made inquiries from assessee with regard to the investment in the said house. The assessee filed a letter before him dt. 21st Feb., 1982 disclosing therein the sources of investment in the original acquisition of the property and the subsequent re-construction and renovation of the said property. It will be appropriate to give extract of the aforesaid letter having a bearing on the above mentioned matter as follows; "That the assessee family purchased an old house No. Plot No. 22, Sarafa Ward, Jabalpur in the name of one member of the family, Smt. Shashirani at Rs. 42,000 on 21st Oct., 1978 from Smt. Ujali Bai w/o Sh. Girja Prasad. The said old house was purchased out of the following sources: (i) Rs. 14,000 Paid out of ancestral fund to the family for....
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....positions were, inter alia, made: "I, Smt. Kusum Bai w/o Dalchand Saraf, aged about 62 years, resident of 605, Sarafa, Jabalpur, the deponent do hereby state on oath as follows: 1. That my monthly income from house property is about Rs. 400 to 500 per month. 2. Presently, I possess about 10 to 11 Tolas golden ornaments. 3. I also advanced about Rs. 14,000 to my son, Shatrughan Prasad for purchase of family house. The aforesaid amount of Rs. 14,000 was available with me out of receipts from my husband and past savings. 4. I also possess about 4 acres of agricultural land at Tilwaraghat and the same was purchased in my name since last 25 to 30 years by my husband and some property at Hanumantal was also purchased by my father-in-law since last 50 years. This property (Baba) of Hanumantal was received by my husband in partition and therefore, I am taking its income. 5. I also possess and own open plots at Agarwal Colony and at Kusum Colony. 6. That on 23rd Aug., 1978, some family ornaments were sold at Rs. 35,035 and these ornaments were ancestral and the facts are in my knowledge. 5. The ITO, Survey Circle, made assessment in respect of asst. yrs. 1979-80 and 1980-81 of the s....
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....the asst. yr. 1981-82, hence there is no question of examining it in the assessment proceedings of earlier assessment year..............." 8. As to the status of the assessee as HUF, the ITO made inter alia, the following observations in his individual assessment: "The assessee's statement on solemn affirmation reveals that there is no partition till now in writing with his brothers. That in 1970 he separated from his father. In the beginning he was doing the job of goldsmithy. Since 1973-74, he started purchase and sale of gold and silver ornaments. The initial capital invested in this business is stated to be out of the savings of goldsmithy job. The assessee was specifically questioned as to what he got from his father while separating in 1970. He avoided to answer the question and instead of answering it, stated that his wife Smt. Shashi Rani Saraf got something. From the above statement of the assessee it is crystal clear that the assessee did not get anything from his father. There is absolutely no ancestral uncleus for the business. The correct status of the assessee is therefore that of individual." In the event, he regarded the house as belonging to the individual. 9. ....
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....n 21st Oct., 1978 for Rs. 42,000. The assessee has also furnished another return declaring his status as individual and has shown income from business. As discussed above, there is no HUF hence the entire construction of house belongs to the assessee Shri Shatrughan Pd. Saraf and will be considered in his hands. The perusal of return of income filed by the assessee claiming the status as that of HUF reveals that in the coloum meant for assessee's name, the name of Smt. Shashi Rani w/o Sh. Shatrughan Pd. Saraf is mentioned. However, the verification has been signed by Sh. Shatrughan Pd. Saraf in the capacity of Karta of HUF and has returned N.F. income at Rs. 3,500. Though the return is not filled in properly, nor there is proper verification, however, no protective basis, without prejudice to the findings in the assessee's individual case, income returned is accepted. The total income is computed as under: . House property income as shown Rs. 4,200 Less : 1/6th for repairs Rs. 700 Total income Rs. 3,500 It may be pointed out at this stage that the ITO has wrongly described the status in the assessment order against the column provided for it as individual. The body of the....
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....ts it is seen that the status of HUF was shown by the appellant in the return filed by her on 27th Jan., 1982. As per order of the learned CIT(A) in the case of M/s Nav Rang Jewellers the house property has been held to belong to the HUF. In the circumstances, I find no justification on part of the ITO to adopt the status of individual with regard to income from house property in this year. He is directed to adopt the status of HUF. I also find no justification for making protective assessment as the addition of income from H.P. shown by the appellant made in the hands of M/s Nav Rang Jewellers for the asst. yr. 1981-82 has been deleted by learned CIT(A) vide his order dt. 3rd June, 1985. In the light of above discussion the ITO is directed to make a substantive assessment with regard to income from house property in the hands of the appellant in HUF status." 12. It is again the aforesaid findings of the authorities below that the appeals in respect of asst. yr. 1981-82, being ITA 385 of 1985 and 208 of 1986 have been filed by the Revenue. 13. I.T.A. Nos. 209 and 212 are in respect of asst. yr. 1982-83 and involve identical issue viz. whether income from property should be assess....
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....d come to conclusion that the property belonged to the assessee. The submission made by the assessee before the learned CIT, therefore, that "even in appeal the learned AAC has also considered the question of status" is palpably wrong and for these reasons, the order of the CIT(A) deserved to be set aside. He should be directed to re-examine the entire issue on merits in respect of asst. yr. 1981-82 in which year the issue has been raised by the ITO in the case of the individual for the first time and has been examined in details. The learned CIT(A) was in error in not examining the assessment in the light of the facts brought on records by the ITO and brushing aside the entire subject matter by merely observing that the status of the HUF had been accepted in the case of the assessee for earlier assessment years. The principle of res judicata cannot be made applicable in such matter more particularly when the ITO had examined the issue for the first time and there was material on record which was not there earlier in the statement of the assessee. In this statement, the ITO had clearly brought out that the assessee had not received anything on partition from his father as there was....
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.... which the assessee could be said to have acquired the immovable property in question. From what has been stated by the assessee in varied submissions, it is clear that he is the only earning member of the aforesaid family unit and that his wife had no separate source of income and it was he, who had acquired the property in the name of his wife. It was the assessee to explain as to what was the nucleus of HUF property with him with the help of which he had acquired the said property. The only explanation given by the assessee is that contained in his letter dt. 22nd Feb., 1982 and the affidavit of his mother which were filed by the assessee before the CIT(A). The ITO had examined the assessee in the light of the said evidence and had brought out further material on record to show that the assessee had never separated from his father and had received nothing on partition of the family consisting of himself and his father. There could, therefore, be prima facie, no question of there being ancestral nucleus in his hands received as a result of partition. If he received anything by way of gift in the form of ornaments from his mother, the gift would not be ancestral in his hands, for ....