2016 (9) TMI 697

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....mounting to Rs. 50,00,000/- as unexplained money u/s.69A. By the impugned order the CIT(A) after calling for remand report, deleted the addition after having following observations :- 7. I have gone through the Assessment Order, written submissions of the AR, the Remand Report of the AO and the AR's rejoinder thereto. On a perusal of these documents, I am of the view that there is considerable force in the AR's submissions for the reasons recorded hereunder. 7.1. The contention of the appellant that no income is chargeable in her hands as she was merely a name lender in the entire transaction merits consideration. Even though the purchase agreement dated 11.09.2006 and sale agreement dated 18.12.2008 have been executed by ....

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....This confession of the builder also corroborates with the AO's finding in remand proceedings. During the remand proceedings, the AO issued summons to M/s. Rajesh Construction Co. and in reply they have submitted t at they have not sold the said flat no. 132 H to the appellant during AY 2006-07 which confirms with the stand taken by the appellant. 7.3 During the remand proceedings, the builder has further submitted that the appellant had initially paid a sum of Rs. 11,00,000/- towards the booking of the said flat which was subsequently cancelled at the oral request of the appellant and that the said amount was adjusted against the amount due in respect of sale of flat In Raj Madhur to the appellant. The builder has also issued r....

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.... is that the beneficial ownership of the flat was always with the builder and the appellant was merely a front for executing the arrangement, Once this position is accepted, I am of the view that as the income arising from the sale of the said flat has already been explained to have been included in the total income of the builder, which fact is also not rebutted by the AO, the same cannot be once again assessed in the hands of the appellant, 7.5. It is a settled legal position under the Income Tax Law that the income must be taxed only in the hands of the legal owner, In CIT vs, Poddar Cement (P) Ltd. (1997) 226ITR 625 (SC) their Lordships have observed that "We are conscious of the settled position that under the common law, &#39....

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....ontributed the purchase consideration for acquiring the flat nor has she received any sale consideration at the time of its sale. Therefore in such a case the income has to be assessed in the hands of the builder only as he is the person entitled to receive the income in his own right and which he has rightfully done so by crediting the same in his books of accounts. 7.6. The AO while structuring the additions u/s 69A has relied on the following decisions: LakhmichandBaijnath v CIT [1959] 35 ITR 416 (SC) Roshan Di Hatti v CIT [1977] 107 ITR 938 (SC) Kale Khan Mohammad Hanif v CIT[1963] 50 ITR 1 (SC) CIT v R S Rathore [1995] 212 ITR 390 (Raj.) 7.7. In the case of the above mentioned decis....