2015 (10) TMI 1462 - AT - Income Tax

Undisclosed investment - assessee, submitted that the assessee and his wife jointly purchased a property - assessee submitted that the assessee belonged to Marwari community and the source was savings from childhood - Held that - 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. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
Assessment of undisclosed income in property purchase jointly by assessee and spouse.

Analysis:
The appeal concerned the assessment of undisclosed income related to a property jointly purchased by the assessee and his wife. The assessee claimed that the investment made by his wife in the property should not be added to his income. The assessee's wife had disclosed an investment in the property in her return for a subsequent assessment year, which the Departmental Representative argued was an afterthought. The Assessing Officer added the amount disclosed by the wife to the assessee's income, considering it as undisclosed income. The Tribunal noted that the property was purchased jointly for a total consideration, but the assessee only admitted a portion of the investment in his return. The Tribunal highlighted discrepancies regarding the timing of the wife's return and the source of funds for the investment. The Tribunal emphasized the need to examine the bank account maintained by the wife to verify the source of funds used for the property purchase. It was observed that the sale deed indicated joint ownership without specifying individual shares. The Tribunal directed the Assessing Officer to re-examine the matter, considering all aspects and evidence, to determine the actual investment made by the wife. The lower authorities' orders were set aside, and the issue was remitted back to the Assessing Officer for a fresh assessment based on the bank account details and evidence provided.

The Tribunal acknowledged the changing saving habits in society but stressed the importance of verifying the source of funds for property investments. The decision highlighted the necessity of a thorough examination of the financial transactions and ownership shares in jointly held properties. The Tribunal's decision aimed to ensure a fair assessment based on concrete evidence and proper verification procedures. The appeal was allowed for statistical purposes, indicating a procedural victory for the assessee, with the case being sent back for a more detailed assessment by the tax authorities.