The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the investment for affording financial security to wife in old age out of explained funds could not be considered as unexplained investment.
The assessee Rukshana Begum, has filed an appeal emphasising that the contribution by her husband for investment in question out of explainable funds, was a sacred task for affording financial security/financial independence, to his wife in her old age and it could not be regarded as a “sin” or unexplained investment.
The impugned property was purchased in the joint names of the appellant and her mother-in-law. The Appellant share was therefore only to the extent of 50% in such property. The total expenses incurred towards the purchase of impugned property was Rs. 15 lakhs as consideration and appellant share purchase gross was only Rs. 8,81,500/-.
The assessee contended before the Assessing Officer (AO) and Commissioner of Income Tax (Appeals) (CIT(A)) that the appellant’s share had been made out of gift of Rs. 8 lakhs received from her husband Khalid Qureshi and the balance from the appellant’s past savings.
It was also explained that the source of Rs. 8 lakhs in the hands of the assessee was a gift from
husband, which was accrued to him from the sale proceedings of two plots sold for Rs. 4 lakhs each.
The AO in the remand report noted that no evidence as to how the sale proceeds of Rs. 8 lakhs shown was received by seller Khalid Qureshi have been accounted for by him in his accounts and no evidence has been produced in respect of remaining half investment.
Hasneeta Matta, who appeared on behalf of the assessee submitted that the authorities had failed to appreciate the humane aspects of the relationship between husband and wife. Contribution by the husband or investment in question out of explainable funds was a biased task in complete financial security and financial independence to his wife in her old age and it could not be regarded as a sin or unexplained investment.
A Single Bench of C.M. Garg, (Judicial Member) observed that the copies of the agreement to sale revealed that the husband of the assessee Khalid Qureshi 26.02.2007 had entered into agreements to sell his two residential plots situated in village Mirzapur with Gaurav Kumar and
Usha and received Rs. 4 Lakh each from said two purchasers in cash against the agreement of sale.
The Bench allowed the appeal filed by the assessee holding that “The factum of gift by husband on the special occasions, festivals etc and other occasions at the time of buying immovable property or other valuable articles is normal practice in the civilized society. The fact of saving the laid for further emergency time is also a well-accepted and well-adopted practice of ladies in civilized society.”
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