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C.I.T. versus L/H OF LATE DR.K.K. GOEL

High Court of Judicature at Allahabad

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C.I.T. v. L/H Of Late Dr.K.K. Goel - INCOME TAX REFERENCE No. 44 of 1994 [2005] RD-AH 838 (23 March 2005)


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Court No.37

Income Tax Reference No.44 of 1994

Commissioner of Income Tax, Lucknow v.

L/H of Late Dr. K.K.Goel, Amroha, Moradabad

Hon'ble R.K.Agrawal, J.

Hon'ble Prakash Krishna, J.

(Delivered by R.K.Agrawal, J.)

The Income Tax Appellate Tribunal, Delhi has referred the following question of law under Section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for opinion to this Court:-

"Whether on the facts and in the circumstances of the case, the Tribunal was in law justified in reversing the orders of the authorities below by holding that the income from house property was not includible in the income of the assessee?"

The reference relates to the Assessment Years 1982-83 and 1983-84.

Briefly stated, the facts giving rise to the present reference are as follows:-

Dr. K.K.Goel, since deceased, has been assessed to income tax in the status of an individual. Upto the assessment year 1981-82, he has shown income from the house property. However, from the assessment year 1982-83, he had omitted to show income under this head stating that a declaratory suit was filed by his sons and the suit was decreed on the basis of mutual partition made on 25.12.1970. The Income Tax Officer has held that the decree was a collusive document between the father and the sons. He accordingly brought the income from the house property to tax. It may be mentioned here that the Income Tax Officer has observed as follows:-

"A perusal of the assessment records of Dr. K.K.Goel shows that the investment in the construction of house property has been made mainly from income from profession in his individual capacity. Moreover, Dr. K.K.Goel has not preferred any appeal before the higher courts and has also not approached the court for re-opening of the case which was decided ex parte in his absence."

Feeling aggrieved, the respondent assessee preferred an appeal before the Commissioner of Income Tax (Appeals) who had upheld the order passed by the Assessing Officer. Still feeling aggrieved, a second appeal was filed before the Tribunal. The Tribunal has allowed the appeals and had deleted the addition of income from the house property at the hands of Dr. K.K.Goel. The Tribunal has held as follows:-

"4. Shri K.C.Srivastava, the learned counsel for the assessee has stated that the Income Tax Officer has every right to go into the genuineness of the documents but unfortunately he has not brought any material on record to show that the decree was collusive one. He has only made a bald statement. He, therefore, urged that the orders of the authorities below should be reversed and the income from the said property included in the income of the assessee should be deleted for both the assessment years.

5.  I agree with the submissions made by the ld. counsel for the assessee. I am unable to uphold the inclusion of income from the property in the income of the assessee, particularly when property in question has gone out of the hands of the assessee by way of court decree. I am also in agreement with the ld. counsel for the assessee that nothing has been brought on record by the ITO to establish that it was a collusive decree except making a bald statement. The orders of the authorities below are, therefore, reversed."

We have heard Sri Shambhoo Chopra, learned Standing Counsel for the Revenue. No body has appeared on behalf of the respondent assessee.

We find that the Assessing Officer has drawn presumptions for the decree being collusive from the fact that Dr. K.K.Goel has not challenged the decree before any higher court and further, he did not take any step for getting the decree reopened as it was passed ex parte.

Apart from the aforesaid presumption, no material has been brought on record by the Income Tax Officer to establish that the decree was collusive. It is well settled that the person who alleges a particular document or order to be collusive, has to prove the same by bringing on record cogent evidence and material which, in the present case, the Assessing Officer has failed. Thus, in the absence of any material having been brought on record that the decree was collusive, the Tribunal was justified in holding that in view of the Court decree of partition, the income from the house property could not have been added in the hands of the respondent assessee.

We accordingly answer the question referred to us in the affirmative, i.e., in favour of the assessee and against the Revenue. There shall be no order as to costs.




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