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2017 (10) TMI 1015 - AT - Income TaxInvestment on purchase of land out of the undisclosed sources - guinity of gift receipt - Held that - Shri Deep Chand, son of Shri Tejram, who is shown as seller of the property to the assessee, has filed an affidavit stating that he is an old man and uneducated person. He was unmarred. He was not having any successor. Rambir Singh and his wife Kanta Devi (assessee) were taking care of him. He had gifted all his property in the name of Rambir Singh and Kanta Devi (assessee). It is pertinent to note that Shri Deep Chand has categorically clearly stated that the land was given as a gift to the assessee. As per the registered Will, all properties i.e. movable and immovable located in India are to devolve in favour of Shri Rambir Singh husband of the assessee. The ld. CIT(A) has not asked report of A.O. on the veracity of content of the affidavit submitted by Shri Deep Chand. No inquiries were made with regard to sale deed executed instead of gift deed in favour of the assessee whether it was due to bonafide mistake whether the sale consideration mentioned therein was genuine mentioned. In view of these facts, we are of the view that to decide the issue in right perspective, further inquiries with regard to the claim of assessee that property was received as gift and no consideration was paid are required. Hence, the matter is restored back to the file of Assessing Officer to be decided afresh in the light of above observations. Appeal of the assessee is allowed for statistical purposes only.
Issues Involved:
1. Whether the assessee made an undisclosed investment of Rs. 61,68,910/- in the purchase of land. 2. Whether the property was received as a gift or purchased by the assessee. Issue-wise Detailed Analysis: 1. Whether the assessee made an undisclosed investment of Rs. 61,68,910/- in the purchase of land: The Assessing Officer (A.O.) received information that the assessee purchased immovable property for Rs. 58,80,000/- on 25/02/2011 and paid registration charges of Rs. 2,88,910/-. The assessee claimed there was no sale/purchase of property during the year and submitted a transfer of property as a gift along with an affidavit. The A.O. observed that a Will dated 25/10/2004 was in favor of Shri Rambir Singh, son of the brother of the executant of the Will, Shri Deep Chand, and it was unrelated to the property registered in the assessee's name. The A.O. held that the property was purchased by the assessee and did not accept the explanation that it was a gift mistakenly registered as a sale deed. The CIT(A) confirmed the A.O.'s action, stating that the land was transferred through a registered deed with apparent consideration and stamp duty paid by the appellant. The affidavit filed on behalf of the deceased seller during the appellate proceedings was deemed inconsequential as it was not presented during assessment proceedings, and cross-verification was impossible. Thus, the amount of Rs. 61,68,910/- was treated as undisclosed investment by the assessee. 2. Whether the property was received as a gift or purchased by the assessee: The assessee, an uneducated lady with no source of income, claimed the property was a gift from her father-in-law's brother, Shri Deep Chand, who was unmarried and childless. The assessee's husband, working in the CRPF, and the assessee were taking care of Shri Deep Chand, who decided to transfer his property to them. Due to a mistake, the deed was executed as a sale deed instead of a gift deed, with the sale consideration calculated as per DLC rates. The assessee provided several pieces of evidence to support the claim of the gift: - Ration card proving Shri Deep Chand resided with the assessee and her husband. - A Will dated 25/10/2004 stating that all properties of Shri Deep Chand would devolve on Shri Rambir Singh. - An affidavit of Shri Deep Chand dated 03/09/2014, notarized and filed during assessment proceedings, stating the property was a gift. - Affidavits from witnesses to the sale deed confirming no consideration was passed, and it was a mistake. - Statements from the assessee and her husband recorded by the Investigation Wing, explaining the payment of registration charges from savings and agricultural income. The ITAT noted that the assessee had no source of income, and the authorities did not find any other source of income. The Supreme Court rulings in Sumati Dayal Vs. CIT and CIT vs. Smt. P.K. Noorjahan were cited, emphasizing that human conduct and probabilities should be considered, and the discretion under Section 69 should be exercised based on the facts of each case. Conclusion: The ITAT found that further inquiries were necessary to determine if the property was genuinely received as a gift and if no consideration was paid. The matter was restored to the A.O. for fresh decision-making, considering the observations and evidence provided. The appeal was allowed for statistical purposes only. Order Pronouncement: The order was pronounced in the open court on 13/10/2017.
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