9911796707
TMI Blog1998 (3) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... rect the AO to treat the half share in the property and the income from the aforesaid property as belonging to the wife, as has been held by the CIT(A) for the asst. yr. 1976-77, which order is not in dispute before us. The only dispute now remains before us in respect of the said property is that the claim of the assessee, i.e., whether the half share in the property belonged to the HUF and if so, then the investment in the said property and the income relating to the said property be assessable in the hands of the HUF and not in the hands of the assessee as individual. 4. This is a very peculiar case and the chronological history of the case with the facts in brief is narrated below. The assessee bought a plot on which the property stands, on 31st Dec., 1971 for Rs. 42,962 in the name of his wife and later on construction was started and has been completed in the middle of 1974. The cost of construction was meted out by the assessee out of borrowings. The ITO, rejecting the claim made before him, assessed the said property and the income therefrom as belonging to the assessee. The assessee appealed to the CIT(A), who did not agree with the contention of the assessee and confirme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the declaration of the assessee made on 14th June, 1964, rejected the claim of the assessee stating that "I find an undated statement of T. Govindaswamy wherein he mentions that he has thrown into the common hotchpot a sum of Rs. 10,000 on 15th June, 1964". He held as under: "Thus, the abovereferred statement is full of inconsistencies. I am of the opinion that it does not have any evidentiary value. Thus the basic fact remains that the plot on which the property was constructed was purchased in 1971 in the name of the assessee as individual and his wife. The borrowings are also made by the appellant in his individual capacity and by his wife for the purpose of construction of this property. Lastly, the appellant himself has offered the income from this property in his individual return for the asst. yrs. 1976-77, 1977-78 and 1978-79. It was only subsequently that the contention was changed. In these circumstances and the abovementioned facts I am of the opinion that T. Govindaswamy, the appellant is the other owner of this property and not the HUF of the appellant." 6. The authorised representative and the Departmental Representative were heard and we have perused the material o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Balasubramanian (1990) 85 CTR (Mad) 21 : (1990) 182 ITR 117 (Mad), which is the jurisdictional High Court, has approved the property belonging to the HUF by way of gift. The case in Surjit Lal Chhabda vs. CIT 1976 CTR (SC) 140 : (1975) 101 ITR 776 (SC) is clearly distinguishable on facts. That was a case where the assessee had a wife and an unmarried daughter and he made a declaration that he had thrown the immovable property, which was his self-acquisition, into the joint family hotchpot in order to impress that property with the character of joint family property and he further declared that he would be holding the property as the Karta of the joint family consisting of himself, his wife and his unmarried daughter. Dealing with the facts of that case and expressing the view that until the birth of a son the personal law of the assessee governed, it was held that the income was chargeable to income-tax in the hands of the assessee in his individual income and not that of the family. To the facts of the present case, the assessee had a wife and minor son at the time when he made the declaration that he had thrown the cash which was his self-acquisition into the joint family hotch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounds of appeal are as under: "3. The learned CIT(A) erred in fixing Rs. 2,75,000 as the cost of construction of the premises at 4, C.P. Ramaswamy Road, Madras-18. 6. The said CIT(A) should have held that the said HUF owed a moiety of the said property and the said Smt. G. Subbulakshmi, the other moiety and, therefore, the construction, cost income, etc. belong to each of them as equal co-owners." On the basis of our finding that the investment in the property belongs to the HUF, these grounds have become non exitia ipso facto. These grounds are dismissed as such. The AO is directed to delete the investment made in the property 4-C.P. Ramaswamy Road, Madras out of the income of the assessee. 10. All the other grounds are general in nature and are ancillary to the main ground, which has been decided by us in the above paragraphs. 11. For the asst. yr. 1976-77 ground Nos. 2 to 4 relate to the income of the property at 4-C.P. Ramaswamy Road, Madras, which has already been decided by us in the foregoing paragraphs of this order. 12. Ground No. 5 has not been pressed by the assessee. Hence we dismiss them as not pressed. 13. Ground No. 6 reads as under: "6. Investment in Greams ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e addition of Rs. 2,64,480 in the hands of the assessee towards unexplained investment for the assessment year under appeal is, therefore, deleted. 15. The seventh ground relates to the addition of Rs. 69,190 being unexplained investment in the acquisition of the other assets enumerated as items 2 to 8 in the draft assessment order of the AO. The AO has worked out the outgoings at Rs. 3,13,236 while the resources available after deducting the household expenses worked out to Rs. 2,09,333. The difference was added by the AO, which was reduced by the IAC to Rs. 69,190. No evidence was placed before the CIT(A). He, therefore, confirmed the order of the AO. 16. The learned CIT(A) disposed of this ground in the following manner in para 9.2 in this order. "At the time of hearing, it was further argued that the AO while working out the various outgoings had adopted the figure of personal drawings at Rs. 30,000 which is rather high. The appellant submits that the drawings for the asst. yr. 1974-75 was taken at Rs. 9,000. After looking into the records of the earlier years and also taking into the records of the earlier years and also taking into consideration the fact that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te to the undisclosed investment incurred by the assessee jointly. The learned counsel for the assessee, therefore, contended that these investments as found by the AO are not made by the assessee alone, but were made by the four persons jointly and hence the assessment of these should be made in the hands of the assessee-AOP and not in the individual status of the assessee. He, therefore, pleaded for the deletion of the addition in question. He also produced before us a copy of the order dt. 9th Feb., 1996 of the Tribunal (A-Bench, Madras) in ITA No. 3253(Mad)/1988 for the asst. yr. 1976-77 in the case of M. Murugesa Naicker vs. ITO the assessee wherein was also one of the members of the AOP, in which case the addition so made had been deleted by the Tribunal. The Departmental Representative, on the other hand, relied on the orders of the authorities below. 18. After hearing the parties and perusing the records we find force in the assessee's contention, since these properties have already been held to be assessed in the hands of the AOP in the case of M. Murugesa Naicker & Ors. vs. ITO by the Madras Bench of this Tribunal in ITA Nos. 1644 to 1646/Mad/1988 for the asst. yr. 1976- ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
