TaxTMI 
TaxTMI 
TaxTMI 
2016 (9) TMI 68
X X X X Extracts X X X X
X X X X Extracts X X X X
....0/- made by A.O. on account of short term capital loss. (ii) That the disallowance has been confirmed arbitrarily rejecting the explanation and evidences brought on record by the assessee. 4. Without prejudice to the above and in the alternative, the learned AO has erred both on facts and in law in disallowing the whole of short term capital loss amounting to Rs. 1,25,550/- despite giving a finding that assessee is only a 50% owner of the said property. 5. The appellant craves leave to add, amend or alter any of the grounds of appeal." 3. Ground Nos. 1 & 5 are general in nature so do not require any comment on our part. 4. Vide Ground Nos. 2(i) & (ii), the grievance of the assessee relates to the confirmation of disallowance of Rs. 1,57,839/- made by the AO on account of loss from house property. 5. The facts related to this issue in brief are that the assessee filed the return of income on 09.07.2014 declaring an income of Rs. 10,74,650/-. The case was selected for scrutiny. The AO during the course of assessment proceedings noticed that the assessee had claimed loss from house property at Rs. 3,15,679/- on the property which was in the joint name of the assessee and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent has been made by assessee from his income chargeable to tax. Wife of assessee Smt. Ritu Mittal has not contributed even a single penny towards repayment of loan. Since the loan was being repaid by the assessee from his income chargeable to tax, therefore he claimed the 100% deduction of intt. paid on loan. 24. The assessing officer while passing the assessment order disallowed loss of Rs. 1,57,839/- u/s 24(1)(vi) of the Income Tax Act, 1961 by bringing out following reasoning in the assessment order:- 2..."It has been noticed that the property is in joint name with his wife Smt. Ritu Goel and as such he is only 50% of the owner of the said property. Accordingly, vide this office notice dated 09.09.2014 the assessee was required to give reasons as to why the rental income as well as deduction be not restricted to 50% being one half percent of owner of the property. In response to this, the assessee vide written submission filed on 31.10.2014 stated that all the installment of housing loan are paid by the assessee, 100% from his taxable income during the year and also he has purchased the said property in joint name with his wife only for family safety purposes and whole in....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... spouse, not being a transfer in connection with an agreement to live apart, or to a minor child not being a married daughter, shall be deemed to be the owner of the house property so transferred; Your honour, the Ld. AO, based on the details furnished during the assessment proceedings has not come out in the assessment order that any consideration was paid by the spouse for purchase of house. On this count as well, the assumption of 50% ownership of spouse is against the statutory provisions." 7. The reliance was placed on the following case laws: CIT Vs Podar Cement (P) Ltd. Etc. (1997) 226 ITR 0625 (SC) CIT Vs AIR Deal Traders (2010) 327 ITR 0034 (P&H) CIT Vs Babu Khan Builders & Ors. (2010) 325 ITR 133 (A.P.) Pallonji M. Mistry (DECD.) Vs CIT (2009) 319 ITR 0167 (Bom.) Universal Radiators Ltd. Vs CIT (2006) 281 ITR 0261 (Mad.) Mysore Minerals Ltd. Vs CIT (1999) 239 ITR 775(SC) S.V. Chandra Pandian Vs S.V. Sivalinga Nadar (1995) 212 ITR 592 (SC) CIT Vs Fazilka Dabwali TPT. CO. (P) Ltd. (2004) 270 ITR 0398 (P&H) Addl. CIT Vs U.P. State Agro Industrial Corporation Ltd. (1981) 127 ITR 97 (All.) 8. The ld. CIT(A) after considering the submissions of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Section 45 of the Transfer of the Property Act, the ownership of the property in a case of a joint transfer belongs in the ratio in which the amount had been contributed by each of the person and in the present case, the entire amount having been contributed by the assessee, the entire ownership will be that of the assessee. It was further submitted that the decision relied by the ld. CIT(A) are not applicable to the facts of the assessee's case because the case of R.B. Jodhamal Kuthiala Vs CIT was not a case of joint ownership and as the property having vested in the custodian in Pakistan, the assessee was not owner of the property, and hence was not entitled to the loss. On the contrary, the said case supports the assessee's case because in that case, it has been held that the property vested in the person who is the owner in its own right and does not go with the title of the property and in the case of Kaur Singh Vs CIT (supra), the facts were that the brothers purchased the property which was registered in their name and one of the brother claimed that his share to be divided alongwith his two sons in view of the arbitration award and decree passed by the Court but the assesse....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... : (1997) 226 ITR 625 (SC), their Lordships have considered the question as to whether for the purpose of ownership, the registration is necessary to consider the income in the hands of the purchaser or the seller, their Lordships observed as under : "We are conscious of the settled position that under the common law, 'owner' means a person who has got valid title legally conveyed to him after complying with the requirements of law such as the Transfer of Property Act, Registration Act, etc. But, in the context of section 22 of the Income-tax Act, having regard to the ground realities and further having regard to the object of the Income-tax Act, namely, 'to tax the income', we are of the view, 'owner' is a person who is entitled to receive income from the property in his own right." When their Lordships have taken the view that having regard to the ground realities and further having regard to the object of the Act, namely, to tax the income in the hands of real owner, their Lordships have taken the view that the owner is the person who is entitled to receive income from the property in his own right. 7. On the same analogy when the entire investment ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the assessee only since the house was shown by the assessee in joint ownership with his wife for safety purposes. In that view of the matter the impugned order is set aside on this issue and the AO is directed to allow the claim of the assessee. 16. The next issue vide Ground Nos. 3(i), (ii) & 4 relates to the disallowance of the short term capital loss amounting to Rs. 1,25,550/-. 17. The facts related to this issue in brief are that the AO during the course of assessment proceeding noticed that the assessee during the year under consideration had sold his house property but in the return of income filed on 09.12.2012, no capital gain had been shown but in the revised return, the assessee had claimed short term capital loss from the property and also filed copies of the purchase & sale deed, copy of the bank account for obtaining loan and amount spent for renovation. The assessee claimed short term loss of Rs. 1,25,650/- as under: "Full Value 43,75,000 Less: Cost of acquisition 38,06,550 Less: Cost of improvement 6,50,000 Less: Expenditure on transfer (Brokerage) 44,000 Short term loss 125650/-" During the course of assessment proceedings, the AO also asked ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tain to the assessee only. Sale proceed was used to make FDR in the joint name, but since the funds were belong to assessee, therefore he disclosed intt income in his ITR and the same was nowhere objected by Ld. A.O 27. Assessee borrowed loan of Rs. 6,30,000/- from ICICI Bank on dated 18.12.2009 for the renovation of house. The same was credited in OBC Bank, Sector 17, Gurgaon. Please refer page no 48 & 50 of paper book. Cash from the OBC Bank, Sector-17, Gurgaon was withdrawn on different dates to meet the expenditure incurred on renovation of house. Please refer copy of bank statement and cash book placed at page no 31, 32 & 50 of paper book. Details of expenditure with copy of bills of expenses is also placed at page no 55-69 of paper book. Date on the bills of expenses is of the month of Dec 09, Jan & Feb 2010 as it is evident from the copy of bills. Assessee has also withdrawn cash from bank during the period of Dec, 09 and Jan 10. Your Honour, it may be appreciated that the petty contractor as per practice take money in cash. And sometime they have to be paid in advance for getting the work to be done on priority. Contention of Ld. Assessing officer that the ex....