TMI Blog1977 (6) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... ife of Shri Ganesh Prasad Jalan. The land was purchased for Rs. 13,700 and in the period falling under assessment years 1969-70 and 1970-71 a three-storeyed building was constructed on this piece of land and according to the assessee the two ladies invested a total amount of Rs. 90,334 in this construction and these amounts were shown as withdrawn from their accounts in the firm. The Income-tax Officer was of the view that the land as well as the building had been purchased in the name of Smt. Bhagwati Devi Jalan and Smt. Gita Devi Jalan, but the real owners of this property were the husbands of these ladies, Shri Bhagwati Pd. Jalan and Shri Ganesh Pd. Jalan. According to the Income-tax Officer the wives were mere benamidars of their husbands and for holding this the Income-tax Officer had advanced certain arguments. The Income Tax Officer found that the consideration for purchase of the plot of land came by withdrawing money from the firm which did not owe any money to the two ladies. The account of the two ladies was debited with Rs. 6,850 each and this amount was paid for purchasing the land. Though the amount given out as purchase-money for the plot of land was Rs. 13,700 the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was the mother-in-law of the lady. There were certain other deposits under the head `dividend and godown rent, but she had no knowledge about it. The lady had also not made any mention about any gift of Rs. 10,000 from Smt. Jai Devi Jalan in 1969. The Income-Tax Officer also pointed out that though the house was stated to have belonged to the ladies, they were not getting any rent from their husbands or their brother. Considering these circumstances, the Income-Tax Officer came to the conclusion that as the lady had no source of income and the husband was carrying on business, he must have used his money for making the disclosure and again showing it as a gift from Smt. Jai Devi Jalan. Thus according to the Income Tax Officer the financial position of the lady did not enable her to invest in the property and the only conclusion which could be drawn was that the husband had invested his money in this property. 3. The Income Tax Officer further considered the financial position of Smt. Gita Devi Jalan and pointed out to discrepancies in her statement. Smt. Gita Devi Jalan did not remember from where she got Rs. 15,000 on which she had paid tax. It was also pointed out that though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ITO in the statements given by the ladies. He referred to the fact that the ladies had not mentioned about the `Disclosure Scheme of 1965 and Smt. Bhagwati Devi Jalan had not made any mention about the source of amount of Rs. 10,000 which was stated to have been received as gift from Smt. Jai Devi Jalan. It was pointed out before the AAC that the amount of Rs. 15,000 had been disclosed by the ladies and tax had been paid on the amount of Rs. 15,000 each. It was also pointed out that the gift by Shri Hiralal Jalan to the extent of Rs. 20,000 was evidenced by the returns submitted in this behalf and the assessments made on that basis. The AAC after pointing out to the various discrepancies in the statements of the ladies considered the arguments on behalf of the assessee to the effect that there was no basis for holding that the consideration for the purchase of the plot of land or for the construction of house had come from the husbands of the ladies. It was pointed out that the Department had at no point of time disputed the accounts of the ladies in the books of the firm and had never treated the credits in their account as the money coming from the husbands. The AAC found that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o prove that any additional money was provided by the husbands. The addition for the unexplained investment was, therefore, deleted by him from the assessment of the assessee. 7. The Department is aggrieved against the order of the Appellate Assistant Commissioner and the learned Departmental Representative pointed out that the learned AAC while agreeing that the ladies had no source of income and also after accepting the discrepancies in the statements given by the ladies had not upheld the action of the Income Tax Officer on the ground that there was no direct evidence of investment by the husbands. He referred to the statements by the ladies and pointed out that they clearly showed that the property was not owned by the ladies as they had very little knowledge about the plot of land as well as the construction of the building. The sale-deed was stated to be in the shop of the firm and it was not in the possession of the ladies. He submitted that the firm was a family-concern consisting of the husbands and the two ladies namely Shri Bhagwati Pd. Jalan and Shri Ganesh Pd. Jalan and their father Shri Hiralal Jalan. According to the submission of the learned Departmental Represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that they were being examined 10 years after the purchase of the land and as stated by them they had entrusted the task of construction to their father-in-law Shri Hiralal Jalan who died in 1970. The learned counsel also submitted that the whole case of the Income-tax Officer proceeds on the basis of suspicion and not on the basis of any evidence. Regarding the initial investment it was stated that the ladies took a loan from the firm where there were three partners nd this loan was later on adjusted when the ladies started earning income from property. He submitted that there was no material to indicate that the amount of Rs. 15,000 which had been disclosed under the Voluntary Disclosure Scheme of 1965 had come from the husbands. As the disclosures had been accepted in the hands of the ladies, the money should be taken to belong to the ladies and not to any body else. As regards the amount of Rs. 20,000 coming by way of gift from Shri Hiralal Jalan, it was submitted that they were supported by the gift-tax return and these gifts had never been doubted. He submitted that the whole amount of Rs. 90,334 which has been accepted as explained by the Income-tax Officer has come ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from a certain source, it is assumed until the contrary is shown that the person supplying to be purchase-money is the owner of the property. There is also no presumption that a property standing in the name of a married Hindu lady does in fact belong to her husband. The ordinary presumption of law is that the apparent state of affairs is real unless the contrary is proved. 12. Now coming to the facts of the present case, it is no doubt true that there were certain omissions and discrepancies in the statements of Smt. Bhagwati Devi Jalan and Smt. Gita Devi Jalan. These statements certainly show that the ladies did not have full knowledge about the details of the construction as well as the manner in which the money was invested. However, the ladies were examined in 1973, whereas the land had been purchased in 1964 and it is an admitted position that they had not directly taken any part that transaction. It was all done through Shri Hiralal Jalan, the father-in-law of the ladies. Unfortunately Shri Hiralal Jalan was not available when the matter was taken up by the Income Tax Officer as he had died in 1970. However, it cannot be ignored that Sri Hairalal Jalan was alive till the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is for holding that the consideration had come from the husbands. As regards the identical credits of Rs. 20,000 each in 1968 it was stated to have come from Shri Hiralal Jalan who was the father-in-law of the ladies and was a partner in the firm and was having a source of income. From the order of the AAC it appears that he had filed gift-tax returns and there is no suggestion that these gifts were not genuine. There is also nothing to show that these amounts had any connection with the husbands of the ladies. As regards the credit of Rs. 10,000 which appears in 1969 and is stated to be a cash-gift from Smt. Jai Devi Jalan, the mother-in-law of the ladies, the Income-tax Officer has merely pointed out that this was not in the knowledge of the ladies, but he has not disbelieved the existence of the cash. This particular credit had appeared on 12th July, 1969 and if this was the case of the Department that this money had actually come from Shri Bhagwati Prasad Jalan, the husband of Smt. Bhagwati Devi Jalan, the Income-tax Officer would have certainly taken it into consideration while making the assessment as Shri Bhagwati Prasad Jalan for the asst. year 1970-71. The fact that this h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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