Shivani Madan Vs ACIT (ITAT Delhi)
Assessee liable to equal tax on income from house property where joint owner’s shares are not mentioned in sale deed
The ITAT, Delhi in Smt. Shivani Madan v. ACIT [ITA No. 1642/Del/2020 dated January 5, 2023] has held that the husband and wife will have equal shares in the house property purchased by them as joint owners, wherein, the sale deed had been executed and the shares of co-owners is not specified. Further, the assessee would be liable to pay tax on the 50% of the income from house property.
Facts:
A search was conducted at the Adam Smith Group on November 28, 2017 under Section 132 of the Income Tax Act, 1961 (“the IT Act”) wherein, the residential premises of Smt. Shivani Madan (“the Appellant”) was also searched. Thereafter, a notice dated April 26, 2019 (“the Impugned Notice”) under Section 153A of the IT Act was issued to the Appellant, to which the return was filed by the Appellant on August 14, 2019, declaring income of INR 21,09,800/- as against the earlier filed income of INR 20,95,490/-.
The search revealed a purchase of a house property on March 8, 2011 for INR 3.50 crores in joint ownership with the husband of the Appellant, for which the Revenue Department (“the Respondent”) asked the Appellant to explain why the income from such house property should not be chargeable to tax in the hands of the Appellant. Consequently, the Appellant submitted that the house property is a single unit and is owned by her husband and her name is only for the security purposes for which the Appellant contributed INR 20 lacs only during AY 2011-12.
The Respondent submitted that the registered sale deed of the property has not defined shareholding between the co-owners therefore, equal ownership of the property would be considered and taxed as per Section 23(1)(a) of the IT Act. Accordingly, the Respondent taxed the Appellant’s share of 50% amounting to INR 9,80,000/- vide order dated December 30, 2019 (“the OIO”).
Being aggrieved, an appeal was filed before the Commissioner of Income Tax (Appeals), wherein vide order dated September 11, 2020 (“the OIA”), the addition for the Appellant share in house property was confirmed. Hence, this appeal.
Issue:
Whether the addition made by the Respondent in the OIO for 50% share of the Appellant in the house property is maintainable?
Held:
The ITAT, Delhi in ITA No. 1642/Del/2020 held as under:
