Mohini Kulwant Ghai v. Commissioner Of Income Tax (A

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITA No. 779 of 2008(O&M)Date of decision 25 .2.2010 Mohini Kulwant Ghai ... Appellant Versus Commissioner of Income Tax (A)... Respondent CORAM:HON'BLE MR. JUSTICE M.M. KUMARHON'BLE MR. JUSTICE JITENDRA CHAUHAN Present:Mr. Pankaj Jain ,Advocate for the appellant. 1.To be referred to the Reporter or not ? 2.Whether the judgement should be reported in the Digest ? M.M.KUMAR, J. This is an assessee's appeal filed under Section 260A of theIncome Tax Act, 1961 (for brevity 'the Act') challenging order dated9.5.2007 passed by Income Tax Appellate Tribunal, Chandigarh Bench,Chandigarh (for brevity 'the Tribunal') in ITA No. 621/CHD/ 2005 inrespect of the assessment year 2001-02. The petitioner has claimed thatfollowing substantive question of law would arise for determination of thisCourt: “ Whether under the facts and circumstances the Tribunal orderis sustainable having treated all the assets as stock in tradewithout examining the intention behind holding thereof ?” Brief facts of the case are that the assessee had filed a return ofincome on 31.7.2001 reflecting Rs. 74,94,636/-. The Assessment wasframed for an amount of Rs. 82,07,155/- by an order dated 22.3.2004 (A.1)under Section 143(2) of the Act. The assessee challenged order dated22.3.2004 before the CIT(A). The appeal of the assessee was partially allowed vide order dated 9.2.2005 (A.2). According to the CIT(A), thefindings of the Assessing Officer that profit on sale and purchase ofproperty could not have been charged to tax as long term capital gain on thebasis of statement made by the husband of the assessee Shri Kuldip SinghGhai. The aforesaid statement was recorded by the Deputy DirectorInvestigation, Ludhiana on 23.4.2001. The basis of the aforesaid finding isthat the statement made by the husband of the assessee was neverconfronted to the assessee nor any show cause notice was issued to her tothe effect that she was actually engaged in the frequent sale and purchase ofproperty as business. Accordingly it has been found that principles ofnatural justice stood violated. The Revenue approached the Tribunal by filing the appeal andthe Tribunal came to the conclusion that the findings recorded by the CIT(A) were erroneous and restored the conclusion arrived by the AssessingOfficer. In para 18 of the order of the Tribunal it has been pointed out thatthe CIT(A) has over-looked the material aspect of this case because theassessee herself never appeared before the Assessing Officer and wasalways represented by her husband. Her husband had offered more than 70lakhs of income for taxation on behalf of his wife which was accepted byher. The Tribunal further found that at no stage opportunity was claimed bythe assessee asserting that the statement of her husband was not binding norany doubt had arisen at any stage. The husband of the assessee has beendealing with the purchase and sale of property on behalf of his wife and theassessee herself is a share holder in the company known as Ghai EstateDevelopers Ltd. which is engaged in the business of sale and purchase ofproperty. Therefore the Tribunal found that it would be unreasonable to ITA No. 779 of 2008 (O&M) hold that the statement of the husband of the assessee made in his capacityas her husband was not binding especially when she was fully aware of suchstatement. In any case no prejudice has been caused to the assessee byplacing reliance on the statement made by her husband in the AssessmentOrder. ITA No. 779 of 2008 (O&M) hold that the statement of the husband of the assessee made in his capacityas her husband was not binding especially when she was fully aware of suchstatement. In any case no prejudice has been caused to the assessee byplacing reliance on the statement made by her husband in the AssessmentOrder. We have heard the learned counsel for the appellant. It has beenfound as a fact that merely because the assessee was engaged in the businessof buying and selling of property in the name of the company would notresult into an inference that she would not held some property as investmentin her own name by keeping in view the fact that most of the property hadbeen held by the assessee for the last ten years and that there was nofrequent purchase/ sale of the property made in her individual name.Therefore, the intention with regard to transaction of sale and purchase ofproperty has been ascertained in accordance with law which is necessarilya finding of fact which cannot be gone into. It would not constitute asubstantive question of law warranting admission of appeal. Therefore, noquestion of law much less a substantive question of law would arise fordetermination of this Court. Dismissed. (M.M.Kumar) Judge 25.2.2010 (Jitendra Chauhan)Judge okg