TMI Blog2022 (10) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... n notional basis means that the husband of the assessee had rental income from other property on which the loan could have been taken. CIT (Appeals) after evaluating the facts had also rightly pointed out that in the absence of any such cogent evidence that the amount claimed as loan from LIC was invested in the property at 815, Mahaveer Nagar-1, the benefit of indexation was not allowable to the assessee on this amount which initially the AO had given and the same was denied by t CIT (Appeals). While reaching to this conclusion, CIT (Appeals) has mentioned in his order that this point was never clarified by the Assessing Officer nor examined. Whereas, on the contrary, AR has drawn our attention towards loan was taken from LIC by the husband of the assessee of Rs. 8,00,000 and later on was paid off and in this respect paper book referred. It was also specifically submitted by the learned authorised representative that the balance-sheets of the various years had been enclosed showing construction in the assets side and loan from LIC in the liability side. Apart from that, the statement of repayment and repayment certificate issued by the LIC in the name of Shri Satya Narain Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout jurisdiction and being void ab initio, the same kindly be quashed. Consequently the impugned assessment framed under section 144/148 dated April 20, 2015 also kindly be quashed. 3.1 Rs. 20,80,533 : The learned Commissioner of Income-tax (Appeals) erred in law as well as on the facts of the case in enhancing the long-term capital gain of Rs. 10,74,200 and confirming the addition of Rs. 10,06,333 made by the Assessing Officer on account of long-term capital gain despite the fact that the investment was made by the husband of the assessee in the property and the resultant profit from the same has been declared in his return of income. The addition so made, confirmed and enhanced by the learned Commissioner of Income-tax (Appeals) is totally contrary to the provisions of law and facts on the record and hence the same kindly be deleted in full. 3.2 The learned Commissioner of Income-tax (Appeals) further erred in law as well as on the facts in confirming the denial of deduction of Rs. 10,06,333 claimed under section 54F invested in the new house. The denial of deduction so claimed and confirmed by the learned Commissioner of Income-tax (Appeals) is totally contrary to the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. Thus, he was the actual owner of the subjected property and therefore, resultant capital gain was offered by him in his return of income. The Assessing Officer, however, disagreed with the reply of the assessee, stating that since the property is in the name of the assessee, the capital gain should be assessed in her hands only, and thus, made addition of Rs. 10,06,333 on account of long-term capital gain (however, granted the benefit of indexed cost of acquisition of Rs. 15,03,667). The Assessing Officer further observed that since the new property was in the name of the husband, hence exemption under section 54 cannot be allowed. Being aggrieved, the assessee preferred an appeal before the learned Commissioner of Income-tax (Appeals). The learned Commissioner of Income-tax (Appeals) issued notice under section 251(2) dated November 23, 2017 for enhancement of income. In response, the assessee furnished reply vide written submissions dated December 21, 2017 and January 3, 2018, the same were considered but could not find favour with the learned Commissioner of Income-tax (Appeals). Finally, he dismissed the appeal of the assessee by observing as under : I have gone thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was payable in the appellant's hands. (ii) As regards the claim of construction on the said property, the claim of the appellant is that the husband had taken housing loan from LIC for this purpose. However, from a perusal of the returns filed by him he was shown income from SOP (being the property under consideration here at 815 Mahaveer Nagar-I) which means this property was self-occupied/vacant so to show income from this on notional basis means he had rental income from the other property on which the loan could have been taken. This point was never neither clarified by the Assessing Officer nor examined. Hence in the absence of any such cogent evidence that the amount claimed as loan from LIC was invested in the property under sale (here in this appeal) at 815, Mahaveer Nagar-I, the benefit of indexation was therefore not to be allowed to be indexed. Further, if this was the only property, which was sold in November 2009, where did the appellant reside in the intervening period of construction on the new house because as per agreement dated October 22, 2009 for reinvestment, the purchased property at A-33, Jaishree Vihar, Ladpura, Kota was only a plot measuring 30 x ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax (Appeals) in enhancing long-term capital gains of Rs. 10,74,200 and confirming the addition of Rs. 10,06,333 made by the Assessing Officer on account of long-term capital gain. The denial of deduction of Rs. 10,06,333 claimed under section 54F was also denied. The learned authorised representative appearing on behalf of the assessee submitted that the assessee has sold property situated at 815, Mahaveer Nagar-I, Kota, the details of which are available on record for a consideration of Rs. 25,00,000 on November 19, 2009 which was valued by Sub-registrar at Rs. 25,10,000 whereas the resultant capital gain was not offered for taxation on the ground that since the said property was purchased by the husband of the assessee in her name and all the funds were arranged and invested by the husband, thus he was the actual owner of the property and, therefore, resultant capital gain was offered by him in his return filed on October 11, 2010 and also claimed exemption under section 54 of Rs. 11,00,000. This fact was noted down by the Assessing Officer. However, he disagreed and made addition of Rs. 10,06,333 by granting relief of indexation and also denied exemption under section 54 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 8 lakhs (paper book pages 117-122), which was also duly paid off by him. Kindly refer paper book pages 95 to 108 wherein balance-sheets of various years are enclosed. Following construction in the assets side and loan from LIC in the liability side. Also kindly refer paper book pages 117-112 wherein statement of repayments and repayment certificate issued by LIC in the name of Shri Satya Narain Agarwal is enclosed. Please refer pages 8 and 9 of the Commissioner of Income-tax (Appeals) order where W/S reproduced. Husband showing rental income : Shri Satya Narain Agarwal has been showing rental income from the subjected property since assessment year 2006-07, when it was first earned, up till assessment year 2010-11 when it was sold (refer paper book pages 102 to 107). The same was even assessed by the Department during various years in his return of income is as follows : A.Y. Amount (Rs.) ROI Dated 2006-07 90,000 3-8-2006 2007-08 96,000 26-6-2007 2009-10 1,20,000 20- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d good till date. None of the assessment of the husband is reopened or disturbed under sections 147 and 263 and so on. Thus, the aspect of taxing long-term capital gain (and of taxing rental income) from the subjected house, had already attained finality. Therefore, the Revenue cannot unsettle an issue, which is already settled merely because the purchase of the properties were in the name of the wife/appellant only. The Revenue if permitted, shall not be going to gain anything extra inasmuch as the tax rates at both the heads are same. On the contrary, it will result into double taxation of same income. Alternatively, if the Revenue wishes to consider the subjected property in the hands of the appellant only then the taxability of long-term capital gain and rental income should have been considered in her hand only by suitably modifying the assessments made in the case of husband. Double taxation not permissible : The admitted facts are that Shri Satya Narain Agarwal (the husband of the assessee) has duly disclosed the long-term capital gain arising from the sold property in his return of income filed on dated October 11, 2010 (paper book 105-107) for the assessment year 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80 taxmann.com 650 (Delhi). 6. On the other hand, the learned Departmental representative relied upon the orders of the authorities below and the case law cited by him, in the case of Prakash v. ITO [2009] 312 ITR 40 (Bom) ; [2008] 173 Taxman 311 (Bom), Kalya v. CIT [2012] 22 taxmann.com 67 (Raj) and ITO v. Ch. Atchaiah [1996] 218 ITR 239 (SC) ; [1996] 84 Taxman 630 (SC). 7. We have heard rival contentions and perused the material available on record and gone through the orders of the authorities below. The learned authorised representative has specifically argued that the assessee was only an ostensible owner whereas the actual beneficiary was her husband. It was also submitted that the assessee had not invested any amount in the purchase of the property and the entire investment was made by the husband of the assessee Shri Satya Narain Agarwal and in support of the same, the assessee had filed affidavit which is at paper book pages 82-83. It was also submitted that the appellant was not even as assessee under the Income-tax Act when the property was purchased and had no income of her own. According to the learned authorised representative, all the investments were made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld, Yes. Since the property was exclusively in the name of the assessee and she has sold the property and merely husband of the assessee has offered capital gain in his return of income is not enough to grant relief to the assessee. Therefore, the assessee is a person who is lawfully liable to be taxed and hence can claim no immunity because the Assessing Officer (Income-tax Officer) has taxed the said income in the hands of her husband contrary to law. The learned Commissioner of Income-tax (Appeals) had rightly decided the issue of claim of indention by holding that there is no basis with the Assessing Officer to allow the claim of indexation in the hands of the assessee because the Assessing Officer was under impression that husband of the assessee had invested in purchase as well as construction of the house whereas both the factual position are not arising out of the facts mentioned before the tax authorities. Since the purchase of the property was exclusively in the name of the assessee in 1994 and there is no evidence on record of any joint names or later inclusion of her husband's name in the same and further there is no evidence on record that the purchase considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to remand the matter to the Assessing Officer with the direction to verify and examine the documents relied upon by the assessee and pass order afresh. The next ground agitated by the assessee is in regard to denial of exemption under section 54F of the Income-tax Act. 8. In this regard the Assessing Officer in the assessment order had categorically stated that the new property was purchased in the name of husband of the assessee whereas on the contrary the learned authorised representative submitted that this finding is factually incorrect. The new property situated at A-33, Jai Shree Vihar, Thekra, Kota was purchased exclusively in the name of the assessee vide Ikrarnama dated October 22, 2009 which is at paper book pages 15-16 and pranam patra , i. e., land allotment letter and patta in the name of the assessee which are also placed at paper book pages 17-21. It was also submitted that construction was carried out on the said plot and in this respect construction bills which are at paper book pages 32 to 76, construction account (ledger) paper book pages 28-31 and valuation report paper book pages 22-27 has also been referred. In our view, since the Assessing Officer has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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