1981 (12) TMI 87

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....e share of Smt. Shakuntaladevi in the house property is only 1/10th and not 1/2. The admitted facts are that the names of the assessee and his wife appeared in the deed by which the house property was purchased for Rs. 89,999. The ITO was of the view that the wife of the assessee is merely benamidar and that the assessee alone is the owner thereof. However, the AAC took the view that the wife of the assessee was not benamidar, but co-owner having 1/10th share. The case of the assessee is that his wife is entitled to 1/2 share in the house property. The assessee contended that a sum of Rs. 9,026 was already under deposit with him by his wife and that the remaining sale consideration of her 1/2 share flowed from his books and that amount was ....

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....nding is not clear and acceptable. Agreement for advancing loan can be oral or in writing. The very fact that entries were passed in the books of the assessee in respect of loan and the amount was debited in the name of Smt. Shakuntaladevi and that the interest was charged, goes to showed that there was an agreement to advance loan and to charge interest. It is nobody's case that the entries being made in the books of the assessee are fictitious. No interest can be charged without agreement. There is no denial by the assessee's wife that entries pertaining to advancement of loan and charging interest are incorrect in the books of the assessee. This being the state of affairs, it has to be accepted that the apparent is the real State of affa....

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.... house." On appeal, the AAC accepted the reasoning of the ITO. 7. It my be pointed out that section 23, sub-section (2) has been wrongly mentioned by the authorities below and the correct section is clause (b) to the second proviso of section 23 (1).The case of the assessee is that the building comprising residential units had been constructed by his predecessor in title after 1st April 1961, but before 1st April 1978. Already pointed out, the assessee and his wife purchased the property from the original owner. The question for consideration is whether deduction to the extent of Rs. 1,200 is allowable to the present owners of the property in view of clause (b) to the second proviso of section 23(1). The authorities below have constru....