High Court Of Madras
CIT vs. S.M. Anandvel (HUF) (Specified)
Section 22
Asst. Years 1985-86, 1986-87
P.D. Dinakaran & P.P.S. Janarthana Raja, JJ.
Tax Case (Appeal) Nos. 260 & 261 of 2006 and TCMP No. 1284 of 2006
1st March, 2006
Counsel Appeared :
Mrs. Pushya Sitaraman, for the Appellant
JUDGMENT
P.D. DINAKARAN, J. :
As against the order dt. 2nd Feb., 2005 in ITA Nos. 74 and 75/Mad/1994 for the asst. yrs. 1985-86 and 1986-87 of the Tribunal, the Revenue has preferred these appeals raising the following substantial questions of law :
“1. Whether in the facts and circumstances of the case, the Tribunal was right in not considering the ground raised by the Revenue relating to the addition of income from the house property at 100 AE Anna Nagar, Chennai ?
2. Whether in the facts and circumstances of the case, the assessee’s contention that the property at 100 AE Anna Nagar, Chennai, did not belong to him and the same belongs to his wife is acceptable ?”
2.1. The relevant facts are as follows : The assessee filed its return of income for the asst. yr. 1985-86 on 30th Sept., 1985 on a total income of Rs. 91,530. Subsequently, he filed a revised return of income on 28th March, 1988 admitting a total income of Rs. 91,755. The difference being a sum of Rs. 225 between the original return and revised return represents the interest admitted under the head “Other sources”. In the meanwhile, there was a search under s. 132 of the IT Act (hereinafter referred to as the ‘Act’) on 27th Jan., 1986 at the residence of the assessee and some incriminating materials in form of papers and books were seized. Based on those documents, it was found that a site measuring one ground and 825 sq. ft. bearing D.No. AE 100 (formerly AC 100) Anna Nagar, Madras, was purchased on 1st May, 1981 at a cost of Rs. 45,000 from one Sri Srinivasa Raju Iyengar in the name of Smt. Manomani, wife of the assessee incurring a sum of Rs. 6,352 towards stamp duty and registration charges. Thus, the total cost of the plot comes to Rs. 51,352. Thereafter, in March, 1983, a house was constructed in the said plot with the cost of Rs. 2,04,274 inclusive of the cost of wooden almirah. The total built-in area was 1100 sq. ft.
2.2. According to the Revenue, the wife of the assessee, Smt. Manomani did not have any regular source of income and therefore the said land and building, referred to above, was considered to be that of the assessee under s. 22 of the IT Act and thus the income from the said property was computed at Rs. 35,354 after deducting a sum of Rs. 1,046 towards municipal tax and Rs. 3,600 towards expenses allowed under s. 23(2) of the Act, taking into consideration that the assessee and his wife were living in 1/3rd portion of the property and 2/3rd portion of the property was let out. The said income was treated as income from house property.
2.3. For the asst. yr. 1986-87, the AO assessed the total income under the head “Income from house property” at Rs. 37,432 taking into consideration the detailed reasons given in the assessment order for the asst. yr. 1985-86. Aggrieved against the orders of the AO even dt. 27th March, 1989, the assessee preferred appeals before the CIT(A), who taking into account the deletion of rent payment claimed to Smt. Manomani, wife of the assessee with regard to the asst. yrs. 1982-83 and 1983-84, allowed the appeals for the asst. yrs. 1985-86 and 1986-87 by orders even dt. 24th Sept., 1993, which was also confirmed by the Tribunal on appeals at the instance of the Revenue. Not satisfied with the order of the Tribunal dt. 2nd Feb., 2005, the Revenue has preferred these appeals raising the substantial questions of law, referred supra. Mrs. Pushya Sitaraman, learned counsel appearing for the Revenue submits that the assessee is the owner of the impugned property, namely, AE 100, Anna Nagar, Madras, within the meaning of s. 22 of the Act, even though the said property stands in the name of his wife, Smt. Manomani. She further submits that the Tribunal as well as the CIT(A) erred in deleting the additions of income from the house property, namely, AE 100, Anna Nagar, Madras, in the returns filed by the assessee for the asst. yrs. 1985-86 and 1986-87.
5. From the above facts, it is clear that the first question of law is nothing but in consequence to the second question of law. Even though the owner means a person who has got valid title legally conveyed to him after complying with the requirements of law such as Transfer of Property Act, Registration Act, etc. and in the context of s. 22 of the Act, having regard to the object of the Act, namely, to tax the income, the owner is a person, who is entitled to receive income from the property in his own right and also the amount invested in the purchase of plot and construction of a house in the name of the assessee’s wife, had come from the assessee and therefore, the income from such property is taxable in the hands of the assessee, since the Tribunal in the instant case rendered a clear finding that the Revenue failed to prove that the said property was purchased by the assessee in the name of his wife, the assessee’s wife alone is the real owner, the CIT(A) as well as the Tribunal rightly held that the income from the said house property, namely, AE 100, Anna Nagar, Madras, is not taxable in the hands of the assessee. The relevant portion of the order of the Tribunal reads as follows : “As seen from the order of the lower authorities, the property belonged to the assessee’s wife and the payment of rent is not in dispute. The only objection of the Revenue is that the assessee’s wife does not have any source of income. It does not mean that the property belongs to the assessee. It is for the Revenue to show that the property was purchased by the assessee in the name of his wife. Unfortunately, the Revenue has no material to show that the property belongs to the assessee. Since the genuineness of the payment is not in dispute, we do not find any infirmity in the order of the lower authority. Accordingly, we confirm the same.”
6. In view of the above concurrent findings of the authorities, that the Revenue failed to prove the genuineness of the payment by the assessee’s wife, it cannot be said that the property belongs to the assessee within the meaning of s. 22 of the Act and merely because, the assessee’s wife did not have any source of income, which by itself does not mean that the property belongs to the assessee, we do not see any question of law much less substantial question arises for our consideration. Accordingly, both the appeals stand dismissed. Consequently, TCMP No. 1284 of 2006 is also dismissed.
[Citation : 288 ITR 286]
