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Case Law Details

Case Name : Sanjeev Jain Vs DCIT (ITAT Dehradun)
Appeal Number : ITA No. 86/DDN/2019
Date of Judgement/Order : 13/05/2020
Related Assessment Year : 2015-16
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Sanjeev Jain Vs DCIT (ITAT Dehradun)

There is no dispute that there was a house property, which was noted by the borrowed capital of the family of the assessee. It is also not disputed that assessee was one of the applicant of the loan. Only dispute is with respect to the family settlement dated eighth day of April 2014 wherein the parents of the assessee who are the original owners of the property divided the property by executive an agreement between the parents and four other persons.

Assessee is one of the entities amongst those four persons who are also brothers of the assessee. According to that family settlement the assessee got 1/6 share in the property. Accordingly, the cost of the construction incurred by the parents was also divided in the ratio according to family settlement and consequent borrowings made by the parents of the assessee were divided amongst the owners 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 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 cannot out of that property. However, both these restrictions are not mentioned in the family settlement deed. We failed to understand that how the learned CIT – A concluded that assessee is now not the owner of the house property. According to us the property west in the assessee with effect from 8 April 2014. The assessee has taken a liability to pay the amount borrowed for the purpose of renovation of that house property to the banker. He was also one of the borrowers in that particular loan.

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