Ita/81/2006 Of Commissioner Of Income Tax v. Sri K Govinda Reddy

IN THE HIGH COURT OF KARNATAKA, BANGALORE DATED THIS THE 3 DAY OF OCTOBER, 2012. PRESENT THR HON'BLE MR. JUSTICK K.SRBEDHAR RAO ANT) THR HON'BLE MR. JUSTICK B.MANOHAR 1.T.A. No.81 OF 2006 C/w. I.T.A.Nos.97/2006, 98/2006, 54/2006, 53/2006,52/2006, 1022/2008, 1023/2008 & 1024/2008 1.T.A. No.81 OF 2006:m BRHTIWHR 1.Commissioner of Income Tax,C.R. Building,Queen’s Road, Bangalore. 2.The Deputy Commissioner of Income Tax,Central Circle-1(3),Central Circle-1(3), C.R. Building, Queen’s Road, Bangalore. Appellants (By Sri M. Thirumalesh, Advocate) AND: ori K. Govinda Reddy,No.1198, Renuka Nilaya,III Cross, HAL III Stage,New Thippasandra, Bangalore-75. Respondent (By Sri A. Shankar and M. Lava, Advocates) This I.T.A. is filed U/s.260-A of I.T. Act, 1961 arising|Outotorder.datedO8.08.2005passedinL.T.A.No.11/Bang/2003, for the Block Assessment Period01.04.1990 to 26.09.2000, praying that this Hon’ble Courtmay be pleased to (i) formulate the substantial questions oflaw stated therein and (11) allow the appeal and set-aside theorder of the ITAT, Bangalore in ITA No.11/Bang/2003 dated08.08.2005 and confirm the order passed by the DeputyCommissioner of Income Tax, Central Circle-1(3), Bangalore,in the interest of justice and equity. 1.T.A. No.97 OF 2Z2QOBRHTIWHR Ll.Commissioner of Income Tax,C.R. Building, Queen’s Road, Bangalore. iaThe Deputy Commissioner of Income Tax, Central Circle-1(3), C.R. Building, Queen’s Road, Bangalore. Appellants (By Sri M. Thirumalesh, Advocate) ANT) ori K. Ramesh Reddy,No.991/1, 4[42]Cross,1[$4]Main, HAL III Stage, |New Thippasandra, Bangalore-75. Respondent (By Sri A. Shankar and M. Lava, Advocates) This I.T.A. is filed U/s.260-A of I.T. Act, 1961 arising|Outotorder.datedO8.08.2005passedinL.T.A.No.12/Bang/2003, for the Block Assessment Period01.04.1990 to 26.09.2000, praying that this Hon’ble Courtmay be pleased to (i) formulate the substantial questions oflaw stated therein and (11) allow the appeal and set-aside theorder of the ITAT, Bangalore in ITA No.12/Bang/2003 dated08.08.2005 and confirm the order passed by the DeputyCommissioner of Income Tax, Central Circle-1(3), Bangalore,in the interest of justice and equity. 1.T.A. No.98 OF 2ZQO0BRHTIWHR Ll.Commissioner of Income Tax,C.R. Building,Queen’s Road,Bangalore. iaThe Deputy Commissioner of Income Tax,Central Circle-1(3),C.R. Building,Queen’s Road,Bangalore. Appellants (By Sri M. Thirumalesh, Advocate) ANT) ori K. Muniswamy Reddy,No.119, Coconut Garden,III Cross, HAL III Stage,New Thippasandra, Bangalore-75. Respondent. (By Sri A. Shankar and M. Lava, Advocates) This I.T.A. is filed U/s.260-A of I.T. Act, 1961 arising|OUTotorderdated08.08.2005|passedin L.T.A.No.137/Bang/2003, praying that this Hon’ble Courtmay be pleased to (i) formulate the substantial questions oflaw stated therein and (11) allow the appeal and set-aside theorder of the ITAT, Bangalore in ITA No.137/Bang/2003dated 08.08.2005 and confirm the order passed by theDeputy Commissioner of Income Tax, Central Circle-1(3),Bangalore, in the interest of justice and equity. 1.T.A. No.54 OF 2Z2QQmBRHTIWHR K. Ramesh,No.993/1, 4[42]Cross,I Main, HAL III Stage,New Thippasandra,Bangalore. Appellant (By Sri A. Shankar and Sri M. Lava, Advocates) AND: The Deputy Commissioner of Income Tax,Central Circle-1(3),Queens Road,Bangalore. Respondent (By Sri M. Thirumalesh, Advocate) This I.T.A. is filed U/s.260-A of I.T. Act, 1961 arising|OUTotorderdated08.08.2005|passedinL.T.A.No.12/Bang/2003 for the Assessment of the BlockPeriod 01.04.1990 to 16.09.2000, praying that this Hon’bleCourt may be pleased to (i) formulate the substantialquestions of law stated therein and (11) allow the appeal andset-asidethe|Order|ot the ITAT, Bangalore1N ITA|No.12/Bang/2003 dated 08.08.2005 on the validity ofassessment for the block period 01.04.1990 to 16.09.2000,in the interest of justice and equity. K. Ramesh,No.993/1, 4[42]Cross,I Main, HAL III Stage,New Thippasandra,Bangalore. Appellant (By Sri A. Shankar and Sri M. Lava, Advocates) AND: The Deputy Commissioner of Income Tax,Central Circle-1(3),Queens Road,Bangalore. Respondent (By Sri M. Thirumalesh, Advocate) This I.T.A. is filed U/s.260-A of I.T. Act, 1961 arising|OUTotorderdated08.08.2005|passedinL.T.A.No.12/Bang/2003 for the Assessment of the BlockPeriod 01.04.1990 to 16.09.2000, praying that this Hon’bleCourt may be pleased to (i) formulate the substantialquestions of law stated therein and (11) allow the appeal andset-asidethe|Order|ot the ITAT, Bangalore1N ITA|No.12/Bang/2003 dated 08.08.2005 on the validity ofassessment for the block period 01.04.1990 to 16.09.2000,in the interest of justice and equity. 1.T.A. No.53 OF 2006:mBEITWERE K. Govinda Reddy,No.1198, Renuka Nilaya,III Cross, HAL III Stage,New Thippasandra, Bangalore. Appellant (By Sri A. Shankar and Sri M. Lava, Advocates) AND: The Deputy Commissioner of Income Tax,Central Circle-1(3),Queens Road,Bangalore. Respondent. (By Sri M. Thirumalesh, Advocate) This I.T.A. is filed U/s.260-A of I.T. Act, 1961 arising|Outotorder.datedO8.08.2005passedinL.T.A.No.11/Bang/2003 for the Assessment of the BlockPeriod 01.04.1990 to 16.09.2000, praying that this Hon’bleCourt may be pleased to (i) formulate the substantialquestions of law stated therein and (11) allow the appeal andset-aside theorderoT theITAT, Bangalore1n ITA|No.11/Bang/2003 dated 08.08.2005 on the validity ofassessment for the block period 01.04.1990 to 16.09.2000,in the interest of justice and equity. 1.T.A. No.52 OF 2006:m BRHTIWHR K. Muniswamy Reddy,No.119, Coconut Garden,III Cross, New Thippasandra,Bangalore. Appellant (By Sri A. Shankar and Sri M. Lava, Advocates) AND: The Deputy Commissioner of Income Tax,Central Circle-1(3),Queens Road,Bangalore. Respondent. (By Sri M. Thirumalesh, Advocate) This I.T.A. is filed U/s.260-A of I.T. Act, 1961 arising|Oultoforder.datedO8S.08.2005passedinI.T.A.No.137/Bang/2003 for the Assessment of the BlockPeriod 01.04.1990 to 16.09.2000, praying that this Hon’bleCourt may be pleased to (i) formulate the substantialquestions of law stated therein and (11) allow the appeal andset-aside theorderoT theITAT, Bangalore1n ITA|No.137/Bang/2003 dated 08.08.2005 on the validity ofassessment for the block period 01.04.1990 to 16.09.2000,in the interest of justice and equity. 1.T.A. No.1022 OF 2008:;BBRITIWE Ll.Commissioner of Income Tax,C.R. Building,Queens Road,Bangalore. iaThe Deputy Commissioner of Income Tax,Central Circle-1(3),C.R. Building,Queens Road,Bangalore. Appellants (By Sri K.V. Aravind, Advocate) ANT) ori K. Govinda Reddy, No.1198, Renuka Nilaya, 3['.]Cross, HAL III Stage, |New Thippasandra,Bangalore-75. Respondent, (By Sri A. Shankar and M. Lava, Advocates) This I.T.A. is filed U/s.260-A of I.T. Act, 1961 arising|OutotOrder|dated30.06.2008passed1n IT(SS)ANo.93/BNG/2006, for the Assessment period 01.04.1990 to26.09.2000, praying that this Hon’ble Court may be pleasedto (i) formulate the substantial questions of law statedtherein and (11) allow the appeal and set-aside the order ofthe ITAT, Bangalore in IT(SS)A No.93/BNG/2006 dated30.06.2008confirmingthe|order.OT the.AppellateCommissioner and confirm the order passed by the DeputyCommissioner of Income Tax, Central Circle-1(3), Bangalore,in the interest of justice and equity. 1.T.A. No.1023 OF 2008:; BETWEEN: 1.)Commissioner of Income Tax,C.R. Building,C.R. Building, Queens Road, Bangalore. oOThe Deputy Commissioner of Income Tax, Central Circle-1(3), C.R. Building, Queens Road, Bangalore. Appellants (By Sri K.V. Aravind, Advocate) AND: ori K. Muniswamy Reddy,No.19, Coconut Garden, 3['.]Cross,New Thippasandra,Bangalore-75. Respondent, (By Sri A. Shankar and M. Lava, Advocates) 1.T.A. No.1023 OF 2008:; BETWEEN: 1.)Commissioner of Income Tax,C.R. Building,C.R. Building, Queens Road, Bangalore. oOThe Deputy Commissioner of Income Tax, Central Circle-1(3), C.R. Building, Queens Road, Bangalore. Appellants (By Sri K.V. Aravind, Advocate) AND: ori K. Muniswamy Reddy,No.19, Coconut Garden, 3['.]Cross,New Thippasandra,Bangalore-75. Respondent, (By Sri A. Shankar and M. Lava, Advocates) This I.T.A. is filed U/s.260-A of I.T. Act, 1961 arising|OUTotorderdated30.06.2008passed1nNIT(SS)ANo.28/BNG/2005, for the Assessment period 01.04.1990 to26.09.2000, praying that this Hon’ble Court may be pleasedto (i) formulate the substantial questions of law statedtherein and (11) allow the appeal and set-aside the order ofthe ITAT, Bangalore in IT(SS)A No.28/BNG/2005 dated30.06.2008 and confirm the order of the AppellateCommissioner confirming the order passed by the DeputyCommissioner of Income Tax, Central Circle-1(3), Bangalore,in the interest of justice and equity. 1.T.A. No.1024 OF 2008:; BBRITIWE 1.)Commissioner of Income Tax,C.R. Building,Queens Road,Bangalore. iaThe Deputy Commissioner of Income Tax,Central Circle-1(3),C.R. Building,Queens Road,Bangalore. Appellants (By Sri K.V. Aravind, Advocate) AND:ori K. Ramesh Reddy,No.993/1, Sunkamma Nilaya,A[42]Cross, HAL 3['.]stage,New Thippasandra,Bangalore-75. Respondent, (By Sri A. Shankar and M. Lava, Advocates) This I.T.A. is filed U/s.260-A of I.T. Act, 1961 arising|OUTotorderdated30.06.2008passed1nNIT(SS)ANo.27/BNG/2005, for the Assessment period 01.04.1990 to26.09.2000, praying that this Hon’ble Court may be pleasedto (i) formulate the substantial questions of law statedtherein and (11) allow the appeal and set-aside the order ofthe ITAT, Bangalore in IT(SS)A No.27/BNG/2005 dated30.06.2008 and confirm the order of the AppellateCommissioner confirming the order passed by the DeputyCommissioner of Income Tax, Central Circle-1(3), Bangalore,in the interest of justice and equity. These appeals are coming on for final hearing this day,SREEDHAR RAO, J.,delivered the following: JU DGMENT One Krishna Reddy on 22.12.1975 was granted|occupancy rights in respect of 6 acres 10 guntas of land inVibhutipura, K.R.Puram, Bangalore North Taluk. KrishnaReddy and his 3 sons have formed firm on 01.04.1994 asM/s.Krishna Reddy and sons. The partnership firm hasentered into development agreement with one Pranam|Foundation in respect of 3 acres of land on 19.11.1994. Atthe inception of partnership firm, Krishna Reddy and sons contributed 3 acres ot land as asset oft the firm and hasreceived sum of Rs.5,00,000/- as non-refundable deposit. iaThe firm did not function its business and cameto be dissolved on 01.12.1994. Krishna Reddy and sons on02.12.1994 have entered into another joint developmentagreement with same firm — M/s.Pranam Foundation. Thesearch was conducted in the premises of the assessees whoare sons of Krishna Reddy on 26.09.2000. The incriminatingdocument was found regarding grant of land to KrishnaReddy and also Partnership Deed, Joint DevelopmentAgreement and Dissolution Deed were traced. In the courseof search, Registered Partition Deed dated 20.04.1999 wasfound. There was reference to oral partition on 10.07.1996.The search is conducted subsequent to the RegisteredPartition Deed. — 3.The Assessing Officer initiated proceedings for|block assessment. The Assessing Officer has found that theproperty is a landed property granted to Krishna Reddy isindividual grant and does not constitute a joint family property. The transfer of 3 acres of land by Krishna Reddyand his 3 sons who were partners to the firm, attractscapital gains. Accordingly, the tax was levied. Later on, thepenalty proceedings are also initiated. 3.The Assessing Officer initiated proceedings for|block assessment. The Assessing Officer has found that theproperty is a landed property granted to Krishna Reddy isindividual grant and does not constitute a joint family property. The transfer of 3 acres of land by Krishna Reddyand his 3 sons who were partners to the firm, attractscapital gains. Accordingly, the tax was levied. Later on, thepenalty proceedings are also initiated. 4The Commissioner of Income Tax (Appeals)|confirmed the order of the Assessing Officer. The AppellateTribunal on the other hand found that the transfer of landby Krishna Reddy and sons being partners to their firm, doesnot attract capital gain U/s.45(3) of the Income Tax Act andhas held that the grant of land in tavour of Krishna Reddy isindividual grant and cannot be construed as joint familyproperty of Krishna Reddy and his sons. The Tribunal inrespect of penalty proceedings found that there was muchconfusion with regard to question whether the land grantedto Krishna Reddy is joint family property or otherwise.Theretore, found that levy of penalty is not correct. 5The Revenue aggrieved by the order that thecapitalgaindoesnotattract,havepreferred L.T.A.Nos.81/2006, 97/2006 and 98/2006. The assessees agerieved by the order of the Tribunal that the land granted1S individual]grantToKrishnaReddy,have.filedI.T.A.Nos.52/2006, 53/2006 and 54/2006. The Revenueagerieved by the order of the Tribunal that the penalty is notleviable, has filed I.T.A.Nos.1022/2008, 1023/2008 and1024/2008. 6.In I.T.A.Nos.81/2006, 97/2006 and 98/2006,the following question of law have been framed_ forconsideration:-— ;In I.T.A.No.81/2006: &Whether Tribunal was correct in holdingthat the transfer of the assessee’s right in|VibhuthipuraVillage,K.R.PuramHobli, Bangalore South Taluk property as his capital|contribution in favour of the firm M/s.Krishna|Reddy and Sons where he became a partner|cannot be brought to tax under the head capital|gains in accordance with Chapter-IV as the|same cannot be valued by ignoring section 49(2)and 45(3) read with Section 45 of the Act?' ;In I.T.A.No.97/2006 & 98/2006: &10. Whether ‘Jribunal was correct inholding that the transfer of the assessee’s right|inVibhuthipuraVillage,K.R.PuramHobli, Bangalore South Taluk property as his capitalcontribution in favour of the firm M/s.Krishna|Reddy and Sons where he became a partner cannot be brought to tax under the head capitalgains in accordance with Chapter-IV as the|same cannot be valued by ignoring section 45(2)and 45(3) read with Section 495 of the Act? 11.)Whether the Tribunal was correct inholding that as per section 113 of the Income|Tax Act no surcharge is leviable as the search in the case of the assessee was conducted on16.09.2000priorTOtheinsertion OT|theamendment by ignoring the provisions of the|Finance Act which clearly contemplated such alevy.' TT.In.I.T.A.Nos.1022 /2008,1023/2008and| 1024/2008, the following questions of law have been framedfor consideration :- &1.Whether the Tribunal was correct inholding that the Authorities in assessmentproceedings had not taken the correct status ofthe assessee as an HUF despite the same having|been adjudicated upon and held against theassessee?| iaWhether the Tribunal was correct insetting aside the penalty levied U/s.158BFA(2) of the Act?' 3S.In the tacts narrated above, the question| whether contribution of land by Krishna Reddy and sons aspartners to their firms attracts capital gain U/s.45(3) is a independent question irrespective of the fact whether theproperty is joint family property or otherwise. In this regard,it is necessary to consider provisions of Section 49(3) whichreads as follows:- 1024/2008, the following questions of law have been framedfor consideration :- &1.Whether the Tribunal was correct inholding that the Authorities in assessmentproceedings had not taken the correct status ofthe assessee as an HUF despite the same having|been adjudicated upon and held against theassessee?| iaWhether the Tribunal was correct insetting aside the penalty levied U/s.158BFA(2) of the Act?' 3S.In the tacts narrated above, the question| whether contribution of land by Krishna Reddy and sons aspartners to their firms attracts capital gain U/s.45(3) is a independent question irrespective of the fact whether theproperty is joint family property or otherwise. In this regard,it is necessary to consider provisions of Section 49(3) whichreads as follows:- *45(3)The profits or gains arising)from the transfer of a capital asset by a person|to a firm or other association of persons or body|of individuals (not being a company or a co-operative society) in which he is or become s_partnerOT|member,by|Wayotcapitalcontribution or otherwise, shall be chargeable totax as his income of the previous year in which|such transfer takes place and, for the purposesof section 48, the amount recorded in the booksof account of the firm, association or body as thevalue of the capital asset shall be deemed to be|the full value of the consideration received or|accruing as a result of the transfer of the capitalasset.' QOThe plain reading of the provision discloses thatwhen a person contributes capital gains to the firm, thepartner is liable to capital gains on the basis of the value ofthe property as recorded in the books of accounts in thefirm. This provision if read in contradiction with Sec.45(4) itbecomes explicit that the value of the property contributedby the partner to the firm for assessing the capital gains,need not be on the basis of the market value, but it shall be the value as recorded in the books of the accounts of thefirm. That means to say, by legal friction, whatever valuestated in the books of accounts oft the firm shall beconsidered as its value irrespective of the market value. Inthe case otASSISTANT COMMISSIONER OF INCOME TAX| AND ANOTHER vs HOTEL BLUE MOON, (2010) 321 ITR|362 (SC)in para 12, the following observations are made:- “719ChapterXIV-Bprovidesforallassessmentofthe|undisclosed.income.unearthed as a result of search without affectingthe regular assessment made or to be made.|search is the sine qua non for the blockassessment. The special provisions are devised|to operate in the distinct field of undisclosed|income and are clearly in addition to the regular|assessments covering the previous years failing|in the block period. The special procedure of|Chapter XIV-B is intended to provide a mode otfassessment of undisclosed income, which hasbeen detected as a result of search. I[t is notintendedCObe|substituted|forregularassessment. Its scope and ambit is limited in|that sense to materials unearthed duringsearch.It|1S inaddition|COthe regularassessment already done or to be done. Theassessment for the block period can only bedone on the basis of evidence found as a resultof search of requisition of books of account or documents|and|suchothermaterialsOT|information as are available with the Assessing|Officer. Therefore, the income assessable in|block assessment under Chapter XIV-B is the|income not disclosed but found and determined as the result of search under section 132 orrequisition under section 132A of the Act,' as the result of search under section 132 orrequisition under section 132A of the Act,' 10..The ratio laid down in the said decision makes itclear that the Assessing Authority — A.O. while making blockassessment has not called for any records from the assesseefor the assessment. He has relied only on the seizedmaterial. The firm had not maintained any books of|accounts. The A.O. has called tor books of accounts ofassessee and found that in the year 1998, they have sold theproperty in question. The A.O. has taken sale value of theproperty in the year 1998 as the value of the property in theyear 1994 and has assessed the capital gain U/s 45(3) of I.T.Act. The procedure followed by the A.O. was. totallyimpermissible U/s 45(3) of the I.T.Act. In this regard, thecontention of the counsel for the assessee — Sri A Shankarthat when books of accounts are not maintained, the A.O.cannot assess the capital gains U/s.45(3), but however, theA.O. has power to assess the transaction U/s.147 of I.T. Act|or can tax the firm U/s.45(4) when it transfers the asset tothird party or on dissolution on the basis of the market value. Even if the books of accounts are maintained, it is|permissible for the partner to contribute the asset to show as‘zero’ value, since U/s.45(3), it is not necessary that thevalue of the property to be shown in the books of accountsshould be equivalent to the market value. In the case whenthe books of accounts are not maintained or in the casewhere in the books of accounts, the value is shown as ‘zero’,there cannot be any evasion of capital gains because upondissolution or transfer of property by the firm, the capitalgains would attract or by way of business profits, the taxcould be leviable and there cannot be scope for avoidance oftax in any manner. 11.The submission of the counsel for the assessee|appears to be sound and proper. In view of the decision inthe case otfASSISTANT COMMISSIONER OF INCOME TAX| AND ANOTHER Vs HOTEL BLUE MOON, (2010) 321 ITR. 362 (SC),the A.O. is not permitted to call for records and.books of accounts of assessee to levy capital gains and taxon the basis of the records which were not found in thecourse of search. When no books of accounts are maintained and not found in the course of search, it is impermissible for|the Assessing Officer to capital gains U/s.45(3) of the IT.|Act. Therefore, the finding of the Tribunal in favour ofassessee appears to be sound and proper. 12.)The contention of Sri Tirumalesh, counsel for|the revenue that when the books of accounts are notmaintained, it is permissible for the Assessing Officer underthe block assessment to assess the capital gains U/s.45(3) ofI.T. Act on the basis of the sale value found in the agreementpursuant to joint development agreement. The contentionappears to be untenable. The transaction of the firm with thejoint developer did not come through the firm came to bedissolved. Consequently, there was no distribution of assetsamong the partners. The value of the capital gains|transterred in tavour of the firm is not recorded and nobooks of accounts are maintained. However upon dissolutionthe firm could have been taxed U/s.45(4) of I.T. Act since thedistribution of asset have taken place and on the basis ofmarket value the capital gains would have been levied. TheAssessing Officer has taxed as per sale value. The Assessing Officer in the absence of books of accounts of the firm hastaken the sale of the property of the year 1998 as the valueof the property of the year 1994 to levy capital gains. Thesaid method is totally illegal and impermissible because it ispermissible U/s.49(3) of the I.T. Act for the partner totranster the asset to the firm at ‘zero’ value and it is also|permissible for the firm to show in the books of account the‘zero value, then only a specific value is shown in the booksof account. Only on the basis of such value, the capital gainshas to be worked out but not on the inference of subsequentsale value or the market value. In that view, the finding ofthe Tribunal is sound and proper. The questions areanswered against the revenue. 13.|In respect of the appeals preferred by the|assessee, it is necessary to point out whether land granted infavour of Krishna Reddy is a joint family grant or personalproperty.| 14..It is the contention of the revenue that in thepartnership deed and in the dissolution deed there is no mention that the property is a joint family property ofKrishna Reddy and his son. In the said document,Mr.Krishna Reddy and his sons have described themselvesas co-owners of property in question. In the joint|development agreement also they have described theproperty as their co-ownership property and not joint family|property. Therefore, it is impermissible for the assessee tocontend that it is a joint family property. 15.|Per contra, the assessees have produced theland revenue records to show that the land in question wassranted to Krishna Reddy in the year 1975. In the RORextract the subsequent mutations have been entered at theinstance of Krishna Reddy in favour of his sons for someportion of the property in question. Krishna Reddy and sonshave entered into oral partition in the year 1986 and gotregistered in the year 1989, which is much before search.The said registered document reveals that the property is ajoint family property. In this regard law relating to the grantof occupancy rights in respect of agricultural lands, whetherit constitutes joint family grant or individual grant is fairly| settled. At the time when the occupancy rights were grantedin favour of Krishna Reddy himself and his sons constitutedthe joint family and revenue mutation entered into in respectof portion of property in favour of his sons, would suggestthat he took the grant as the one in favour of joint family. 16.|The conduct of Krishna Reddy in getting hissons name mutated in the revenue records jointly andcontributing the land in favour of the firm and would showthat the property was joint tamily property, besides thememorandum of partition of the year 1999 which came intoexistence much before search would vouch safe that thefamily is a joint family and that the landed property belongsto the joint family. In the context of the said facts and thedocumentary material, the contention of the revenue that theproperty was not a joint family property and it is individualproperty of Krishna Reddy is untenable. Therefore, thequestion of law framed at para 19 of the appeal|memorandum is answered against the revenue and all otherquestions of law are not germane tor consideration in theseappeals. In that view, I.T.A. Nos.81/06, 97/06 and 98/06 are|dismissed and as a consequence the computation of tax onthe basis of HUF property should follow. Since it is held thatthe property is a joint family property, the question of levy ofpenaltyOT)theindividualaSSe@SS€edoesNOTATISE.Accordingly, the question of law is answered against theTEVENUE. In.theresult,theappealsot|theTEVENUEL.T.A.Nos.81/06, 97/06, 98/06, 1022/08, 1023/08 and1024/08 are dismissed. The appeals of the assesseeI.T.A.Nos.54/06, 53/06 and 52/06 are allowed. NM* od/-|JUDGE od/-.JUDGE