2020 (7) TMI 66

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....Tax, Central Circle, Dehradun made by order under section 153A (1) (b) read with section 143 (3) of The Act passed on 28/12/2018 is confirmed. 02 The brief facts of the case shows that assessee is an individual deriving income from retail trading of gold and silver jewelry and other gift items of gold and silver from his proprietary concern. The assessee filed his return of income under section 139 (4) of the act showing total income of Rs. 527460/- on 25/3/2016. Search took place under section 132 of the Act on 1/12/2016 at business and residential premises in the group of the cases. The case of the assessee was also covered therein. 03 The only issue in the appeal was that assessee has claimed loss from house property on account of loan....

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....the amount of any interest payable on such loan is granted as deduction. As assessee is merely a co applicant for the loan and not an owner of the house property, he disallowed the claim of the interest expenditure of Rs. 2 lakhs made by the assessee. Accordingly the returned income was assessed at Rs. 7 27460/-. 04 Aggrieved with the order of the learned assessing officer assessee preferred an appeal before the learned CIT - A. Before him the assessee submitted an application for admission of additional evidence under rule 46A of The Income tax Rules, 1962 and stated that there is a family settlement amongst the family members of the assessee and because of this the appellant is the de facto owner of a portion of the property for which ....

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.... the asset or earn income from the said share of the property. He further noted that even after the lapse of five years from execution of memorandum of family settlement the property is not muted in the name of the assessee. In the end, he held that memorandum of family settlement neither confers an illegal ownership of the property and nor assessee is entitled to earn income from property in his own right. He further noted that family settlement is only for living separately and for payment of housing loan as per mutual agreement. Therefore, he held that memorandum of family settlement is only a colorable device in the name of family settlement to get extra benefit of deduction of the interest expenditure in the hands of the assessee. Ther....

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....s of the property. The learned CIT - A, before whom this document was produced by the assessee held to be a colorable device. However looking at the family settlement we do not find that there is any scheme of arrangement, which can be said to be a colorable device. The only factor that has been stated in the family settlement is that the property is now divided amongst different persons including the parents and their four e sons. It was also mentioned in that deed that each of the member would be entitled to get their names recorded in the municipal corporation record. Nothing else mentioned in the deed. The learned CIT - A had come to the conclusion that assessee cannot sell the property. He further came to conclusion that assessee can....