Madhya Pradesh H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in including the income from house property and the interest income which are in the name of the wife as the income of the assessee ?

High Court Of Madhya Pradesh

Harikisan Gondi vs. CIT

Sections 22, 4

Asst. Year 1973-74, 1974-75

G.G. Sohani, Actg. C.J. & Faizanuddin, J.

Misc. Civil Case No. 424 of 1982

12th November, 1986

G.G. SOHANI, ACTG. C.J.:

As directed by this Court under s. 256(2) of the IT Act, 1961 (hereinafter referred to as ” the Act “), the Tribunal, Nagpur Bench, Nagpur, has referred the following question of law to this Court for its opinion :

“Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in including the income from house property and the interest income which are in the name of the wife as the income of the assessee ?”

2. The material facts giving rise to this reference briefly are as follows: The assessee is assessed to income-tax in the status of an individual. The assessment years in question are 1973-74 and 197475. While framing the assessment for these years, the ITO disbelieved the version of the assessee that his wife had purchased a plot for an amount of Rs. 8,000 which she had received from her relations and had constructed a house thereon. The ITO held that the consideration for the purchase of the plot came from the assessee and his wife was not the real owner of the house. The ITO, therefore, treated that house as belonging to the assessee and the income arising therefrom as belonging to the assessee. Aggrieved by the order passed by the ITO, the assessee preferred an appeal before the AAC who allowed the appeal. Hence, the Revenue preferred a second appeal before the Tribunal. The Tribunal found that there was no material whatsoever for coming to the conclusion that the wife of the assessee had received Rs. 8,000 from her relations and had invested that amount in purchasing the plot. The Tribunal found that the amount invested in the purchase of the plot came from the assessee. In this view of the matter, the Tribunal allowed the appeal preferred by the Revenue. Aggrieved by the order passed by the Tribunal, the assessee sought a reference but as the application made in that behalf was rejected, the assessee submitted an application before this Court under s. 256(2) of the Act which was allowed by this Court. That is how the aforesaid question of law came to be referred to this Court.

Having heard learned counsel for the parties, we have come to the conclusion that the reference has to be answered in the affirmative and against the assessee. The Tribunal found that there was no material whatsoever on record for coming to the conclusion that the requisite amount for investment in the purchase of the plot and for the construction of the house came from the wife. The Tribunal further found that there was no material on record to show that the wife of the assessee had received any rent in respect of the house which was admittedly let out. In view of these findings, the Tribunal, in our opinion, was right in law in including the income from the house property and the interest income in the name of the wife as the income of the assessee.

For all these reasons, our answer to the question referred to this Court is in the affirmative and against the assessee. In the circumstances of the case, parties shall bear their own costs of this reference.

[Citation : 172 ITR 434]

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