Madhya Pradesh H.C :The Nadi Paar Katni property purchased by and standing in the name of Smt, Manikbai was the property of the HUF ?

Counsel Appeared

H.C. Shrivastava, for the Assessee : B.K. Rawat, for the Revenue

N.D. OJHA, C.J.:

This judgment shall also govern the disposal of M.C.C. Nos. 221 of 1981, 238 of 1981, 426 of 1981 and 441 of 1981.

The assessee in all these cases is the same, namely, Shri Dharamdas Agrawal (HUF). In proceedings for assessment, both under the IT Act and the WT Act, a question arose as to whether certain house properties were the properties of the assessee or of the wife of Dharamdas Agrawal, namely, Smt. Manikbai The question arose for the first time in the asst. yr. 1957-58 and was decided against the assessee. In the subsequent years, the income from the aforesaid properties was treated as the income of the assessee and taxed as such without any demur or objection on the part of the assessee. It appears that in the year 1965-66, the question was again raked up by the assessee.

These miscellaneous cases are with regard to the assessment years between 1965-66 to 197475. In various orders passed both under the IT and WT Acts, the aforesaid properties have been treated to be the properties of the assessee, as was done in the asst. yr. 1957-58. It appears that in the subsequent proceedings, reliance on additional evidence, namely, an order of the Tahsildar, was placed by the assessee. The Tribunal took the view that on the face of the admission made by the assessee in the earlier proceedings that the properties in question belonged to the assessee, not much value could be attached to the order of the Tahsildar.

4. The matter having been so decided, the assessee made applications in these cases for referring certain questions to this Court for its opinion. In M.C.Cs. Nos. 426 of 1981 and 441 of 1981, two questions have been referred to this Court which read as hereunder :

” 1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the Nadi Paar Katni property purchased by and standing in the name of Smt, Manikbai was the property of the HUF ?

2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in following its order in the case of the assessee for the asst. yrs. 1965-66 to 1972-73 in the income-tax appeals without considering subsequent events and furnishing of further evidence about acquisition of and additions to the property ? “

5. In the remaining three cases, only one question has been referred, namely: ” Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the income from the houses standing in the name of Manikbai is taxable in the hands of the HUF? “

6. It would thus be seen that the aforesaid question and question No.1 of M.C.Cs. Nos. 426 of 1981 and 441 of 1981 are substantially the same. Question No. 2 in these two cases is, however, an additional question which has to be answered in these two cases only.

7. We shall first take up question No. 2 of M.C.Cs. Nos. 426 of 1981 and 441 of 1981. It has been urged by learned counsel for the assessee that the Tribunal committed an error in not considering the subsequent events and further evidence produced by the assessee and passing orders on the basis of the orders passed in the earlier assessment years.

8. Having gone through the order of the Tribunal, we find it difficult to agree with this submission. From the statement of the case in M. C. C. No. 426 of 1981, it appears that the only additional evidence relied on by the assessee was the order of the Tahsildar, Katni, dated March 14, 1963. The Tribunal has not taken the view that the said order was inadmissible or that no reliance could be placed by the assessee on the said order. On the other hand, the Tribunal has taken into consideration that order also and, after referring to the admission made by the assessee before the Tribunal in earlier proceedings that it was the assessee which was the real owner of these house properties, has held that, in view of the categorical admission made by the assessee, not much value could be attached to the aforesaid order of the Tahsildar, Katni. It is thus not a case where the Tribunal has refused to take into consideration the order of the Tahsildar, Katni, as additional evidence but is essentially a case of appraisal of evidence. The Tribunal, as seen above, did not choose to place reliance on the order of the Tahsildar on the face of the admission made by the assessee in the earlier assessment proceedings. Question No. 2 in Misc. Civil Cases Nos. 426 of 1981 and 441 of 1981 has to be answered accordingly.

9. Coming to question No.1 in these two cases and the question in the remaining three cases, it would be seen, as already pointed out above, that it is substantially the same question which has been raised in all these five references. In this connection, it may be pointed out that for the asst. yr. 1957-58, the houses in question were treated as the properties of the assessee. In the subsequent years, as has been pointed out by the Tribunal, at any rate up to 1964-65, even though the income from this property was admittedly assessed in the hands of the assessee, it did not demur or raise any protest. The Tribunal has further relied on an admission made by the applicant-assessee in the earlier proceedings before the Tribunal that it was the assessee which was the real owner of these house properties which stood in the name of the wife of its karta.

10. In CIT vs. Durga Prasad More 1973 CTR (SC) 500 : (1971) 82 ITR 540 (SC), during the asst. yr. 1942-43, the assessee claimed that the income from a house property should not be brought to tax in his hands and in support thereof, produced the deed of conveyance in his favour and the deed of trust executed by his wife, nearly a year thereafter, on September 10, 1941. The case of the assessee was that it was the stridhan property of his wife. This case was rejected and the income from the property was assessed in the hands of the assessee. During the subsequent assessment years up to 1957-58, the income from those premises was assessed in the hands of the assessee. For the asst. yrs. 1958-59 and 1959-60, however, the assessee revived his plea that the property did not belong to him but was the stridhan property of his wife and the Tribunal again rejected it. The Tribunal, inter alia, relied on the circumstance that even after it had observed in the year 1942-43 that the assessee could take up that question again, in the subsequent years, the assessee had allowed the income to be taxed in his hands for several years without any objection.

Before the Supreme Court, it was urged that the circumstance that during the asst. yrs. 194243 to 1957-58, income from the properties was assessed in the hands of the assessee could not operate as res judicata or as an estoppel. It was held that though it was true that neither the principle of res judicata nor the rule of estoppel is applicable to assessment proceedings, the fact that the assessee included the income of the premises in his returns for several years, after objecting to the inclusion of that income in his total income in the asst. yr. 1942-43, is undoubtedly a circumstance which the taxing authorities were entitled to take into consideration, in the absence of any satisfactory expla

It has been urged by learned counsel for the assessee that from the statement of the case, it does not appear as to whether the assessee in the instant case, had also shown the income from house properties during the years up to 1964-65 treating it as the property of the assessee. It is true that the statement of the case is not clear on this point either way. This much, however, is clear that during all those years, the income from the property was admittedly assessed treating it to be the property of the assessee without any demur or protest on the part of the assessee. That apart, the Tribunal has relied on a specific admission made by the assessee in the earlier proceedings that the property in question was the property of the assessee, even though it was standing in the name of Manikbai, wife of Dharamdas Agrawal. No satisfactory explanation apart from filing the order of the Tahsildar referred to above seems to have been given by the assessee in the subsequent assessment proceedings. The circumstance which in the case of Durga Prasad More (supra) substantially seems to have weighed, is that the assessee had, in the subsequent returns, made an admission that the properties belonged to the assessee. In the instant case also, even though the statement of the case is silent on the question as to whether up to the year 196465, the assessee had shown the income from these properties in the returns treating the same as properties of the assessee, yet, in our opinion, it is not of much consequence inasmuch as, as pointed out by the Tribunal, the assessee bad in an earlier proceeding made a categorical admission before the Tribunal that these properties were the properties of the assessee even though standing in the name of Smt. Manikbai No satisfactory explanation has been given by the assessee with regard to that admission.

In Narayan Bhagwantrao Gosavi Balajiwala vs. Gopal Vinayak Gosavi, AIR 1960 SC 100, it was held that an admission is the best evidence that an opposing party can rely upon, and though not conclusive, is decisive of the matter, unless successfully withdrawn or proved erroneous.

In this view of the matter, it cannot be said that the decision of the Tribunal, on the facts and in the circumstances of the case, in regard to the aforesaid question, is erroneous.

Learned counsel for the assessee then urged that in a subsequently instituted suit, it has been held that the properties in question were the properties of Smt. Manikbai and that in first appeal, the said finding of the trial Court has been upheld by this Court also, even though a letters patent appeal is pending against the judgment of this Court in first appeal. On its basis, it was urged that till the aforesaid judgment was reversed in the letters patent appeal, there was a finding in the civil suit that the properties in question belonged to Smt. Manikbai. Suffice it to say, so far as this submission is concerned, it is not possible for us in the present proceedings to take into consideration any additional evidence.

In Associated Clothiers Ltd. vs. CIT (1967) 63 ITR 224 (SC), it was held while dealing with a reference under s. 66(1) or 66(2) of the Indian IT Act, 1922, that in such a reference, the High Court must proceed on the findings recorded by the Tribunal and it cannot admit and consider additional evidence which was not placed before the Tribunal. It is after the cases go back to the Tribunal in pursuance of the answers given by us in these references and the second appeals are taken up for passing consequential orders, that it may be open to the assessee to place reliance on the subsequent events.

In view of the foregoing discussion, our answer to the question in M.C.Cs. Nos. 206 of 1981, 221 of 1981 and 238 of 1981 and question No. 1 in the remaining two cases, namely, M.C.Cs. Nos. 426 of 1981 and 441 of 1981, is that on the facts and circumstances of the case, the Tribunal was right in law in holding that income from the house standing in the name of Manikbai is taxable in the hands of the HUF.

As regards question No. 2 in M.C.Cs. Nos. 426 of 1981 and 441 of 1981, since as pointed out above, the only additional evidence which was sought to be relied on before the Tribunal was the order of the Tahsildar, Katni, dated March 14, 1961, and that order has been taken into consideration by the Tribunal, the question really does not arise and, therefore, need not be answered. In the circumstances of the case, however, there shall be no order as to costs.

[Citation : 172 ITR 244]