TMI Blog2019 (4) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... would not but be aware of while making the investment, clearly indicting the assessee’s explanation. Further still, the assessee being short of funds and other resources, including time, yet does not transfer the land to her son for a consideration, but without it. The recoupment of cost from her son by the assessee would not have attracted any additional stamp duty nor any gain in the assessee’s hands. The aspect of it being for a new project, so that the interest expense was not admissible, would in any case obtain. The levy of penalty for furnishing inaccurate particulars of income is, in principle, valid. At the same time, as observe two major inconsistencies in the penalty as levied, also pointed out during the hearing. Firstly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h (through her proprietory concern, M/s. Narula Nets, Batala Raod, Amritsar), made an investment in the property at C-55, Focal Point, Amritsar during the relevant previous year (i.e., fy 2004-05) at ₹ 7,32,234/-, and which was accordingly reflected in her balance-sheet as at 31.03.2005, the year-end, as a fixed asset. The sale deed of the said plot of land, executed on 12.8.2005, was however in the name of her son, Raunaq Singh. A gift deed was executed by the assessee in his favour on 31.3.2006 and, accordingly, the amount debited to the assessee s capital account on that date. The assessee was, in this view of the matter, considered to have misrepresented the facts during the relevant year, i.e., by reflecting the investment as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut a lease-hold land from PSIEC, which is given on lease only for setting up industries, i.e., for business purpose. Toward the same, the ld. counsel for the assessee, Sh. Nagpal, would furnish an affidavit from the seller, Sh. Kanwalpreet Singh, confirming to be an allottee of the said land by PSIEC and, further, of having executed the GPA in favour of the assessee. The assessee s explanation, as per Sh. Nagpal, had not been accepted for no valid reason. The assessee, whichever way one may look at the matter, has no case, i.e., in principle. To begin with, as also found in the quantum proceedings, the investment in the focal point plot is out of borrowed funds, for which I have examined the assessee s balance-sheet as on 31.03.2005. Now ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acquiring the property on 18.10.2004, as in the following year (12.8.2005), when the registration of the sale deed was done in the favour of her son, Sh. Raunaq Singh. No change in the circumstances between October, 2004 and August, 2005, has been stated. Why, she did not have sufficient funds to buy the land, deploying borrowed capital for the purpose, much less to set-up an industrial unit? Why, the document executed in her favour in October, 2004, i.e., the GPA along with the affidavit, as admitted, itself prevented the assessee from registering the land in her name, a fact of which she would not but be aware of while making the investment, clearly indicting the assessee s explanation. Further still, the assessee being short of funds an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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