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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI SANJAY ARORA, AM & SHRI RAM LAL NEGI, JM
O R D E R Per Sanjay Arora, A. M.: This is an Appeal by the Assessee directed against the Order by the Commissioner of Income Tax (Appeals)-29, Mumbai (‘CIT(A)’ for short) dated 25.3.2011, partly allowing the Assessee’s appeal contesting its assessment u/s.143(3) of the Income Tax Act, 1961 (‘the Act’ hereinafter) for the assessment year (A.Y.) 2006-07 vide order dated 29.12.2008.
2.1 The brief facts of the case are that the assessee, an individual, was enquired about the credit of Rs.40 lacs in his bank account with Shamrao Vittal Co-op Bank, Bandra, which was in fact a joint bank account with his wife, Smt. Tarulata Bhagat.
(A.Y. 2006-07) Shahikant Chimanlal Bhagat vs. ITO The amount had in fact been utilized for the purchase of a property for Rs.40.25 lacs, which was again in the joint names of the assessee, his wife, and his son, Nilesh Bhagat, who (son) had transmitted Rs.12.40 lacs to the assessee during the year from his bank account. As Nilesh had no capacity to lend funds, having nominal income at the relevant time, his entire capital being locked up on investments (refer Ex. 4), with the sum transferred to the assessee being rather explained to be, in turn, collected in cash from as many as 51 persons, the same was added in the assessee’s hands u/s. 68 as unexplained credit. The Assessing Officer (A.O.) also made an addition for the entire sum (of Rs.40.25 lacs) as unexplained - as to its source, invested in property, u/s.69A.
2.2 In appeal, the ld. CIT(A) confirmed the addition of Rs.12.45 lacs transferred/lent by Nilesh (son) for want of a satisfactory explanation. The said sum, however, having been utilized by the assessee for purchase of property, credit for the same was allowed in computing the amount assessable u/s.69A. The assessee had availed a home loan of Rs.20 lacs from ICICI Bank, which was also considered as explained, so that the balance Rs.7.80 lacs was confirmed for addition. Aggrieved, the assessee is in second appeal, challenging both the additions, i.e., for Rs.12.45 lacs (added u/s. 68) and Rs.7.80 lacs brought to tax u/s. 69A.
Before us, though the assessee has challenged the impugned order qua both the additions, the only plea raised by the ld. Authorized Representative (AR), the assessee’s counsel, on being questioned by the Bench as to what infirmity/s attends the said order, was that the property being in the joint names (of the assessee, his wife and son), only the assessee’s share (at 1/3rd) in the property could be brought to tax in his hands. The addition in respect of the share in the property of the assessee’s wife and son could not possibly be assessed in the assessee’s hands. The ld. Departmental Representative (DR), on the other hand, relied on the orders by the authorities below.
(A.Y. 2006-07) Shahikant Chimanlal Bhagat vs. ITO 4. We have heard the parties, and perused the material on record. The plea raised by the assessee is inconsistent with and contrary to the record. Firstly, the income-tax law is not concerned with the titular ownership but with the beneficial ownership only. Then, again, the assessee has been questioned only in respect of the sum (Rs.40.25 lacs) invested in the property from his bank account. The ownership of property in case of co-owners, whose shares are not specified, is, in terms of the Transfer of the Property Act (s. 45), in the ratio of the investment made by them. It is not the ownership, but the source of the investment, as made, whether consistent with or in excess of one’s share, which a person is called upon to explain under the Act. There is no indication that the amount of Rs.12.40 lacs advanced by Nilesh Bhagat was not to the assessee alone but also equally to his wife, the other joint bank account holder. Why, rather, would he advance the amount if he himself had an equitable interest in the property? The home loan is also only to the assessee (Ex. 8), suggesting of him to have an exclusive interest in the property. To us it is clear that funds that have been ‘garnered’ from all and sundry, channelizing funds through his (son’s) bank account as well. The fact that the amount advanced to the assessee may also have been assessed in the hands of the lender on protective basis, i.e., being unexplained - as to its source, credit/s in his books of account, is of little moment. Clearly, the Revenue can collect tax only from one, and the liability on the protective assessee can be invoked only where substantive assessment fails. Under the circumstances, and in view of the foregoing, we find no merit in the assessee’s case. We have already stated to have found no infirmity in the impugned order, nor has any been brought to our notice. We, accordingly, finding the same as reasonable and in accordance with law, decline interference. We decide accordingly.
In the result, the assessee’s appeal is dismissed. प�रणामतः �नधा�रती क� अपील खा�रज क� जाती है । Order pronounced in the open court on June 22, 2016
(A.Y. 2006-07) Shahikant Chimanlal Bhagat vs. ITO