Smt Jasminder Kaur, Amritsar. V. The A.C.I.T., Amritsar.

ITA 301/ASR/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57415 (ITAT-AMRITSAR)
• Duration Of Justice: 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 29-03-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 20-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMRIK CHAND
• Assessee Lawyers: JATINDER NAGPAL
• Keywords: Gift

Judgement Text

ITA NO.301/ASR/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.301(ASR)/2011 ASSESSMENT YEAR:2005-06 PAN; ABSPK4385K SMT. JASMINDER KAUR VS. THE ASSTT. COMMR. OF INCOM E-TAX, C/O M/S. NARULA NETS, AMRITSAR. CIRCLE IV, AMRITSAR . (APPELLANT) (RESPONDENT) APPELLANT BY: SH. JATINDER NAGPAL, ADV. RESPONDENT BY: SH. AMRIK CHAND, DR DATE OF HEARING :29.03.2012 DATE OF PRONOUNCEMENT:30/03/2012 ORDER PERBENCH; THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE CIT(A), AMRITSAR, DATED 04.01.2011 FOR THE ASSESSMENT YEAR 2005-06. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAD SHOWN INVESTMENT IN THE LAND AND BUILDING OF THE PROPERTY SITUATED A T C-55, FOCAL POINT, AMRITSAR. IT WAS FOUND THAT THE LEASE DEED EXECUTE D ON 12.8.2005 WAS IN FAVOUR OF ASSESSEES SON SH. RONAQ SINGH AND NOT IN FAVOUR OF THE ASSESSEE. WHEN QUERY WAS RAISED, THE ASSESSEE SUBMITTED REG ARDING THE INVESTMENT ITA NO.301/ASR/2011 2 IN THE NAME OF RAUNAQ SINGH IN C-55, IT IS SUBMITTE D THAT THE SAME WAS INTENDED TO BE GIFTED TO S. RAUNAQ SINGH, WHO IS S ON OF YOUR ASSESSEE. PAYMENT WAS MADE FOR THE SAID PROPERTY AS PER COPY OF ACCOUNT ALREADY SUPPLIED BUT THE REGULAR TRANSFER DEEDS WERE EXECUT ED NEXT YEAR. THE PROPERTY WAS GIFTED TO S. RAUNAQ SINGH ON 31.03.200 6 WHEN THE AMOUNT WAS TRANSFERRED TO THE CAPITAL ACCOUNT OF YOUR ASSESSEE AS GIFT TO SON. THE AMOUNT IS REFLECTED IN THE INVESTMENTS ACCOUNT TILL THE COMPLETE PAYMENTS WERE MADE AND ULTIMATELY THE PROPERTY WAS GOT REGIS TERED IN THE NAME OF S. RAUNAQ SINGH AND TRANSFER ENTRIES ALSO MADE IN THE BOOKS OF ACCOUNT. THUS, IT EMERGED THAT DURING THE RELEVANT ASSESSMENT YEAR 2005-06, THE ASSESSEE HAD ADVANCED MONEY TO THE TUNE OF RS.732234/- IN RE SPECT OF C-55 PROPERTY WHICH WAS ULTIMATELY REGISTERED IN THE NAME OF HER SON ON 12.8.2005 THOUGH THE ASSESSE CLAIMED THAT IT WAS GIFTED TO HER SON O N 31.3.2006. THUS, THERE IS A DELIBERATE ATTEMPT ON THE PART OF THE ASSESSEE TO SUPPRESS THE REAL FACTS. THE ASSESSEE HAS ATTEMPTED TO DISGUISE THE ADVANCES MAD E AGAINST PROPERTY AS THE ADDITIONS MADE TO FIXED ASSETS DURING THE YEAR, WHI CH IS NOT CORRECT. AS A RESULT, IN ONE HAND THE ASSESSEE IS PAYING INTEREST ON FUNDS BORROWED AT THE RATE OF 12% WHILE ON THE OTHER HAND THE ASSESSEE HA S MADE INTEREST FREE ADVANCE FOR A PROPERTY WHICH SHE HAS ADMITTEDLY GIF TED TO HER SON. ACCORDINGLY, A SUM OF RS.87868/- BEING 12% OF RS.73 2234/- WAS DISALLOWED ITA NO.301/ASR/2011 3 FROM THE INTEREST CLAIMED U/S 36(1)(III) OF THE ACT IN VIEW OF THE JUDGMENT IN CIT-1 VS. M/S. ABHISHEK INDUSTRIES LTD. LUDHIANA C ITED AT 205 CTR (P&H) 304. 3. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSES SING OFFICER. 4. THE LD. COUNSEL FOR THE ASSESSEE INVITED OUR ATT ENTION TO PAGE 1 & 2 OF THE CAPITAL ACCOUNT AND BALANCE SHEET OF THE A SSESSEE ARGUING THAT THE ASSESSEE WAS HAVING SUFFICIENT INTEREST FREE FUNDS AND THE PROFIT DURING THE YEAR WAS AMOUNTING TO RS.16,41,959/-. THEREFORE, TH E SAID AMOUNT HAS BEEN PAID FOR INVESTMENT IN THE LAND AND BUILDING FOR G IFTING TO THE SON OF THE ASSESSEE WHICH WAS REGISTERED ON 31 ST MARCH, 2006 RELEVANT TO THE ASSESSMENT YEAR 2006-07. 5. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE H AD MADE THE INVESTMENT IN LAND AND BUILDING AMOUNTING TO RS.732234/- DURING T HE YEAR WHICH, IN FACT, HAS BEEN GIFTED IN THE FOLLOWING YEAR IN PARTICULAR ON 31.03.2006 PERTAINING TO ASSESSMENT YEAR 2006-07. AS REGARDS DIVERSION O F FUND FROM INTEREST BEARING FUND IS CONCERNED, THE ARGUMENT OF THE LD. COUNSEL CANNOT BE ACCEPTED SINCE NO SUCH CALCULATION OR ANY SUCH EVID ENCE HAS BEEN PLACED ON ITA NO.301/ASR/2011 4 RECORD BEFORE ANY OF THE AUTHORITIES BELOW OR BEFOR E US THAT THE INTEREST FREE FUNDS WERE ACTUALLY INVESTED FOR THE INVESTMENT IN THE LAND AND BUILDING IN RESPECT OF C-55, FOCAL POINT, AMRITSAR, WHICH WAS G IFTED TO ASSESSEES SON IN THE FOLLOWING YEAR. ALSO, THE ASSESSEE COULD NOT PR OVE ANY NEXUS OF THE BORROWED FUNDS FOR THE PURPOSE OF BUSINESS FOR CLAI MING REDUCTION U/S 36(1)(III) OF THE ACT, FOR THE SAID INVESTMENT OF R S.732234/-. WE ARE, THEREFORE, OF THE VIEW THAT THE A.O. HAS RIGHTLY D ISALLOWED INTEREST U/S 36(1)(III) OF THE ACT AND WE FIND NO INFIRMITY IN T HE ORDER OF THE LD. CIT(A) IN THIS REGARD. THUS, ALL THE GROUNDS OF APPEAL OF THE ASSESSEE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 30TH MARCH, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30TH MARCH , 2012 /SKR/ COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE:SMT. JASMINDER KAUR, ASR. 2. THE ACIT CIR. IV, ASR. 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, ITAT, ASR. TRUE COPY BY ORDER