Case Law Details
The facts, in brief, are that the assessee declared net wealth of Rs.2,75,28,460/- in his wealth tax return. The ld. Assessing Officer accepted the wealth declared by the assessee by passing an order u/s 16(3) of the Wealth Tax Act, 1957. The Revenue audit raised a query, consequently, notice dated 15/03/2011 u/s 17of the Wealth Tax Act, 1957, was issued to the assessee. The wife of the assessee, Ms. Gauri Khan, purchased a residential house at Delhi for Rs.1,65,95,000/- and jewellery worth Rs.70,22,658/- out of the loan of Rs.2,28,88,530/- given by the assessee. The Assessing Officer was of the view that wealth of the assessee escaped assessment, therefore, the loan amount of Rs.2,28,88,530/- was to be clubbed in the hands of the assessee for computation of his net wealth. He further observed that the jewellery would have been purchased by the assessee which he deliberately avoided, thus, there was indirect “transfer of asset” to the wife, by the assessee, therefore, within the meaning of provision of section 4(1)(a)(i) of the Wealth Tax Act, 1957, the transferred amount is to be included in the net wealth of the assessee. On appeal, the ld. Commissioner of Income tax (Appeals) affirmed the view of the Assessing Officer against which the assessee is aggrieved and is in appeal before this Tribunal.
In the present case, the wife of the assessee is having independent source of income, filing her return and even subsequently repaid part of the loan and this fact even has been mentioned in para 4.3 (page-8) of the impugned order that the amount of Rs.4,50,400/- was repaid till assessment year 2008-09, therefore, there was no “transfer of asset” or “colourable device”, as has been alleged by the Revenue because the assessee was not the owner of “any asset” which was transferred to the wife, as mentioned earlier, rather a new property was acquired/purchased from a third party out of the interest free cash loan taken by the wife from her husband. So far as, the observation in para 4.3 of the impugned order as to “why a person shall lend money to wife to purchase house and jewellery or not purchase in his own name remained unexplained, is concerned, we are not satisfied with these observations because this is their family matter and the decision for purchasing the property i.e. in whose name the property is to be purchased, is up to them and not the Revenue. The ld. DR as well as the ld. Commissioner of Income tax (Appeals) has mentioned that it amounts to “indirect transfer” within the meaning of section 4(1)(a)(i) of the Wealth Tax Act. We find that sub-clause (i) also speaks about “to whom such assets have been transferred” by an individual. As discussed earlier there is no transfer of asset as such rather interest free loan was given by the assessee to his wife, therefore, from this angle also the assertion made by the ld. DR is on weak footing.
INCOME TAX APPELLATE TRIBUNAL,MUMBAI
BEFORE SHRI JOGINDER SINGH, JM A
ND SHRI D. KARUNAKARA RAO, AM
Please become a Premium member. If you are already a Premium member, login here to access the full content.
