P O BASHEER Vs. COMMISSIONER OF INCOMETAX COCHIN

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Cochin Bench in compliance with the direction of this court in O. P. No. 387 of 1998 referred the following question under Sec. 256 (2) of the Act. THE question reads as follows: "whether, on the facts and in the circumstances of the case, there was material on record before the Tribunal to come to its conclusion in confirming addition of Rs. 1,70,000/- in the hands of the assessee in spite of the fact that Mrs. Ayishabi had admitted that she had invested the funds in the immovable property?"

(2.) THE above question arises out of the income-tax assessment of the assessee for the assessment year 1987-88. During the previous year relevant to the assessment year 1987-88 the assessee had purchased property near Calicut Corporation office jointly with his wife Smt. Ayishabi for a consideration of Rs. 3,40,000/ -. THE assessee had invested his half share which was made out of the drawings from the firm M/s Haji P. I. Ahmedkoya and that he had not made any investment in respect of the other share of his wife. Further it was also stated by the assessee that his wife had other source of income and that assessee's wife was assessed to income-tax and wealth-tax. Assessee's wife had also sent a letter stating that she had received gifts from abroad and the investments were made out of the same. THE assessing officer did not accept the claim that investmen t was made with separate funds received by way of gifts by the assessee's wife. He had proceeded to make the assessment on the basis that the sum of Rs. 1 ,70,00 0 /-invested in the name of the assessee's wife represented unexplained income which was to be brought to tax in his hands. Accordingly Rs. 1 ,70,00 0 /-was added as income under "other sources". In appeal the Commissioner of Income-tax deleted the addition on the ground that there was nothing to show that he had made investment in the property in the name of his wife. Revenue then took up the matter in appeal before the Tribunal. THE Tribunal had elaborately considered the claim regarding receipt of gifts which would show that part of the consideration was paid by the assessee's wife. THE Tribunal noticed that it was not a case where purchase was made by the wife independently or part of the same would have come from the hands of the assessee himself and the balance amount must have come from the assessee's wife.