Pr. Commissioner Of Income Tax , Kota v. Bhim Singh, Ummed Bhawan, Kota

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 63/2018 Pr. Commissioner Of Income Tax , Kota. ----Appellant Versus Bhim Singh, Ummed Bhawan, Kota. ----Respondent Connected With D.B. Income Tax Appeal No.69/2018 Pr. Commissioner of Income Tax, Kota. Versus Bhim Singh, Ummed Bhawan, Kota ----Appellant ----Respondent For Appellant (s) For Respondent (s) : Mrs. Parinitoo Jain Mr. P.K. Kasliwal HON'BLE MR. JUSTICE KALPESH SATYENDRA JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS 10/07/2018 Judgment 1.In both these appeals common question of law and facts areinvolved hence they are decided by this common judgment. 2.By way of these appeals, the appellant has assailed thejudgment and order of the tribunal whereby tribunal has partlyallowed the appeal of the revenue and cross objection of theassessee was dismissed. 3.Counsel for the appellant has framed following substantialquestions of law:- 1. Whether the Tribunal was legally justified indirecting to adopt the status of the assessee as an"individual" and not as "HUF" as taken byAssessing Officer in the light of provisions ofsection 27(ii) of Income Tax Act and section 4,5&6 of the Hindu Succession Act? 2. Whether the Tribunal was legally justified indeleting the addition of Rs.3,78,708/- andRs.50,61,933/- by holding that the assessee wasentitled for exemption u/s.10(19A) treating entirepalace in occupation despite of the fact that part ofthe palace was let out and as such it cannot besaid that entire palace was in occupation of ex-ruler? 3. Whether the Tribunal was legally justified inrestricting the disallowance of expenses withoutappreciating the same were excessive andunreasonable and the assessee had failed tofurnish details and prove the genuineness andcommercial expediency of such expenses and assuch were not allowable u/s.37 or 57 or 58 of theAct? 4. Whether the Tribunal was legally justified inholding that the income earned from ITC Ltd. ForRs.50,11,783/- be assessed 'Business Income'u/s.28 as against assessed as 'Income from OtherSources' u/s.56 by the Assessing Officerspecifically when the assessee neither had anycontrol over the running hotel business nor was aparty in running the hotel business? 5. Whether the Tribunal was legally justified inholding that the rental income received fromcommercial complex was assessable as 'BusinessIncome' u/s.28 instead of 'Income from HouseProperty' u/s.22 specifically when the motive ofthe assessee was to earn rental income and wasnot engaged in any business activity? 3.2Appeal No.69/2018 1. Whether the Tribunal was legally justified indirecting to adopt the status of the assessee as an"individual" and not as "HUF" as taken by AssessingOfficer in the light of provisions of section 27(ii) ofIncome Tax Act and section 4, 5&6 of the HinduSuccession Act? 2. Whether the Tribunal was legally justified indeleting the addition of Rs.5,57,319/- andRs.50,61,933/- by holding that the assessee wasentitled for exemption u/s.10(19A) treating entirepalace in occupation despite of the fact that part ofthe palace was let out and as such it cannot be saidthat entire palace was in occupation of ex-ruler? 3. Whether the Tribunal was legally justified inrestricting the disallowance of expenses withoutappreciating the same were excessive andunreasonable and the assessee had failed tofurnish details and prove the genuineness andcommercial expediency of such expenses and assuch were not allowable u/s.37 or 57 or 58 of theAct? 4. Whether the Tribunal was legally justified inholding that the income earned from ITC Ltd. For 2. Whether the Tribunal was legally justified indeleting the addition of Rs.5,57,319/- andRs.50,61,933/- by holding that the assessee wasentitled for exemption u/s.10(19A) treating entirepalace in occupation despite of the fact that part ofthe palace was let out and as such it cannot be saidthat entire palace was in occupation of ex-ruler? 3. Whether the Tribunal was legally justified inrestricting the disallowance of expenses withoutappreciating the same were excessive andunreasonable and the assessee had failed tofurnish details and prove the genuineness andcommercial expediency of such expenses and assuch were not allowable u/s.37 or 57 or 58 of theAct? 4. Whether the Tribunal was legally justified inholding that the income earned from ITC Ltd. For Rs.48,49,721/- be assessed 'Business Income'u/s.28 as against assessed as 'Income from OtherSources' u/s.56 by the Assessing Officer specificallywhen the assessee neither had any control over therunning hotel business nor was a party in runningthe hotel business? 5. Whether the Tribunal was legally justified inholding that the rental income received fromcommercial complex was assessable as 'BusinessIncome' u/s.28 instead of 'Income from HouseProperty' u/s.22 specifically when the motive of theassessee was to earn rental income and was notengaged in any business activity? 4.The facts of the case are that return declaring income ofRs.45,92,100/- was filed by the assessee on 18.3.2014. This casewas selected for scrutiny as per instruction under Manual scrutinyguidelines. First notice u/s 143(2) of I.T. Act 1961 was issued on18.9.2014 which was duly served upon the assessee.Subsequently, notice u/s 142(1) issued to the assessee on18.9.2014 which was duly served upon the assessee on19.9.2014. Thereafter, notice u/s 142(1) alongwith questionnaireissued to the assessee on 18.9.2015 calling forinformation/documents required to finalize assessmentproceedings. 5.Now, the issue is squarely covered by the decision of thiscourt in D.B. ITA No.143/2009 in the case of same assesseedecided on 14.12.2016, DBITA No.595/2009 decided on the sameday wherein it has been held as under:- “4. Identical issue in the case of same assesseewas pending before the Supreme Court by waywas pending before the Supreme Court by way of Civil Appeal No.2812/2015 whereby recentlyin the decision of the Supreme Court renderedon 05.12.2016, it has been held that the incomewhich has been earned by the former ruler ashis income from the requisition of the property isnot taxable and in view thereof, the question No.(iv) in relation to taxability of income onrequisitioned property is covered by the decisionof the Supreme Court. 5. Consequently, the other questions which areframed with regard to section 147 and 148 ofthe Act in our view have been renderedacademic inasmuch as the income which hasbeen derived by the assessee is not taxable and no fruitful purpose would be served byexamining the issue. In that view of the matter,the appeals deserve to be dismissed.” 6.The same view was followed in DB Civil Review 98/2017 andother connected matters decided on 2.11.2017 and DBITANo.282/2016 decided on 25.4.2017. 7.In view of the above, no substantial question of law arises inboth these appeals. The issues are answered in favour of theassessee and against the department. 8.The appeals stand dismissed. (VIJAY KUMAR VYAS),J (K.S. JHAVERI),J Brijesh 13-14.