Mere Claim of Interest of Housing Loan in ITR by Son of Assessee Would Not Absolve Capital Gain Tax Liability: ITAT [Read Order]

The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) has held that a mere claim of interest on a housing loan in an Income Tax Return (ITR) by the son of the assessee would not absolve capital gain and its tax liability.

Mumtaz Abdul Aziz Thakur, the assessee challenged the appellate order passed by the National Faceless Appeal Centre, Delhi, Dated 28th April 2022 for A.Y. 2011-12, wherein the appeal filed by the assessee against the assessment order dated 11th December 2018 passed by the Income Tax Officer, Ward 27(2) (3), Mumbai under Section 143(3) read with section 147 of the Income-tax Act, 1961 (the Act), was dismissed.

The assessee failed tofilea return of income for the A.Y. 2011-12, however, the information is available that the assessee has entered a transaction of immovable property of ₹34,25,000/-. Therefore, notice under Section 147 read with section 148 of the Act was issuedon 26th March 2018 and the assessee filed her return of income at ₹120/- on 10th September 2018.

The Assessing Officer confirmed that there is the purchase of a flat in the name of the assessee on 20th March 2009 for ₹23,50,000/- and the same was sold on 12th October 2010 for ₹34,25,000/- and therefore, there is a short term capital gain earned by the assessee of ₹10,75,000/- which is required to be added.

The CIT (A) confirmedthe addition asthe purchase deed and sale deed was executed in the name of the assessee and the return of the son of the assessee did not show any capital gain.

It was observed that the sale of the property was made for ₹34.24 lacs in the name of the assessee which was also purchased in the name of the assessee and the assessee is the legal owner of the above property.

A Coram comprising of Shri Prashant Maharishi, AM  observed that there is no evidence that the son of the assessee has declared any capital gain on the above transactions. Further, held that “merely because the interest of housing loan is claimed by the son of the assessee in his computation it does not make him the owner of the property. In this case, the legal owner of the property is the assessee who has transferred the property by registering the sale deed. “The Tribunal upheld the orders of the lower authorities and dismissed the appeal of the assessee.

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