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Income Tax Appellate Tribunal, S M C BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN
आदेश /O R D E R
This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-19, Chennai, dated 28.11.2014 and pertains to assessment year 2007-08.
Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the assessee and his wife jointly purchased a property for a total consideration of `42,45,000/-. The assessee has also paid stamp duty. The assessee’s wife, an independent assessee, filed return of income in the regular course disclosing the investment made by her in the property to the extent of `7,35,000/-. However, the Assessing Officer disallowed the claim of the assessee and made an addition of `7,35,000/- in the hands of the assessee.
According to the Ld. counsel, if at all any addition can be made, it should be made in the hands of the assessee’s wife and not in the hands of the assessee. On a query from the Bench, what was the source for the assessee’s wife to make investment of `7,35,000/-, the Ld.counsel submitted that the assessee belonged to Marwari community and the source was savings from childhood. The bank account would disclose the savings made in regular course.
Therefore, according to the Ld. counsel, there cannot be any addition.
On the contrary, Sh. P. Radhakrishnan, the Ld. Departmental Representative, submitted that the assessee’s wife filed return for assessment year 2008-09 disclosing a sum of `7,35,000/-. The assessee has disclosed as if a loan was taken from several family members. However, the property was purchased in the assessment year 2007-08. The return was filed only in assessment year 2008- 09. According to the Ld. counsel, in the earlier assessment year during which the return was not filed, the property was purchased by the assessee along with his wife. The loan which was said to be borrowed from family members by the assessee’s wife is in the assessment year 2008-09 and not in the year under consideration. Therefore, the Assessing Officer found that the claim of investment by the assessee’s wife to the extent of `7,35,000/- was an afterthought. Therefore, the Assessing Officer found that the entire sale consideration was deemed to be paid by the assessee. Accordingly, a sum of `7,35,000/- was added as undisclosed income.
I have considered the rival submissions on either side and perused the relevant material on record. From the material available on record it appears that the assessee purchased a property with his wife as a joint owner, for a sale consideration of `47,35,000/-, including the stamp duty and registration charges paid to the State Revenue Department. In the return of income, the assessee has admitted only `40 lakhs as his investment in the property. The assessee explained before the Assessing Officer that the property was purchased jointly along with his wife Smt. Nethal.
The assessee filed a proof of Smt. Nethal’s return of income for the assessment year 2008-09. In fact, the document was registered on 17.08.2006 which falls in the assessment year 2007-08. No return was filed by the assessee’s wife for assessment year 2007-08 and the return said to be filed by the assessee’s wife relates to assessment year 2008-09. Therefore, whatever disclosed by the assessee’s wife for assessment year 2008-09 may not be available for making investment in the said property in assessment year 2007-08 which is under consideration. Now the assessee claims that since they belonged to Marwari community, his wife could save money in the regular course, which was deposited in the bank and same was used in purchasing the property. This Tribunal is of the considered opinion that saving habit has increased in the society in the recent past. Therefore, saving of money in routine course cannot be ruled at the outright. Since the assessee claims that the money was deposited in the bank account in a regular course, this Tribunal is of the considered opinion that the bank account maintained by the assessee’s wife in which all the savings were deposited has to be examined and the availability of funds on the date of payment made for purchasing the property has to be examined. On perusal of the registered sale deed, it shows that the property was purchased jointly without any reference to the share of the assessee. Therefore, for all practical purposes, the assessee and his wife have equal sharing in the property. It is also to be examined when the assessee has equal share in the property and the assessee himself claims that a sum of ` 40 lakhs was invested by him out of `47,35,000/-, it is not known how the assessee’s wife could claim 50% of the share in the property on the basis of the sale deed. These aspects need to be examined by the Assessing Officer and find out whether the assessee’s wife has actually invested the money or the entire money was invested by the assessee. Accordingly, the orders of the lower authorities are set aside and the entire issue is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter in the light of the bank account that was said to be maintained by the assessee’s wife and thereafter decide the matter in accordance with law, after giving reasonable opportunity to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced on 7th August, 2015 at Chennai.