MUMBAI: Delhi’s benches Income Tax Court of Appeal (IT IS HERE) held that, if the registered deed of sale did not specify the extent of ownership of the residential property by the husband and wife, then both would be deemed to own an equal share of the property.
Judgment in case Shivani Madan (taxpayer), ITAT thus maintained a tax rate of Rs 9.8 lakh in her hand for the financial year 2014-15 (the year involved in the litigation).
Since this property is vacant, 50% of the nominal rent charged under the Income Tax (IT) Act goes to the taxable wife.
An earlier search was carried out on a business group and thus the taxpayer revealed the purchase of a residential property in 2011 for Rs 3.5 crore which was jointly owned with her husband. that. This led to the question of why such home income was not disclosed in her IT report.
Madan only invested Rs 20 lakh, or about 5.4% of the property’s purchase price.
In response to the IT announcement, she revealed the home property earnings corresponding to her shares. In various stages of appeal, this approach was rejected.
When the lawsuit came to the ITAT, she stated that it was customary for the wife’s name to be on the deed of sale, so it was unjustifiable to tax 50% of the income from the home property in her hands. Various judicial decisions are also mentioned to support this argument.
However, based on the facts of the case, ITAT rejected these submissions. For example, the tax court noted that the Calcutta superior court had ruled that income from property should only be taxed in the name of the husband, since the wife is a homemaker with no independent source of income. established and the entire investment is made by the husband. husband. Meanwhile, in Madan’s case, she’s a salaried employee (accidentally working for the business group for which the search was conducted). Tax experts point out that it’s quite common to add a wife’s name to a residential property.
However, documentation of each co-owner’s exact contribution to the property builder/sale, bank account details to which payments were made, past tax returns, etc. useful in case of tax litigation.
Judgment in case Shivani Madan (taxpayer), ITAT thus maintained a tax rate of Rs 9.8 lakh in her hand for the financial year 2014-15 (the year involved in the litigation).
Since this property is vacant, 50% of the nominal rent charged under the Income Tax (IT) Act goes to the taxable wife.
An earlier search was carried out on a business group and thus the taxpayer revealed the purchase of a residential property in 2011 for Rs 3.5 crore which was jointly owned with her husband. that. This led to the question of why such home income was not disclosed in her IT report.
Madan only invested Rs 20 lakh, or about 5.4% of the property’s purchase price.
In response to the IT announcement, she revealed the home property earnings corresponding to her shares. In various stages of appeal, this approach was rejected.
When the lawsuit came to the ITAT, she stated that it was customary for the wife’s name to be on the deed of sale, so it was unjustifiable to tax 50% of the income from the home property in her hands. Various judicial decisions are also mentioned to support this argument.
However, based on the facts of the case, ITAT rejected these submissions. For example, the tax court noted that the Calcutta superior court had ruled that income from property should only be taxed in the name of the husband, since the wife is a homemaker with no independent source of income. established and the entire investment is made by the husband. husband. Meanwhile, in Madan’s case, she’s a salaried employee (accidentally working for the business group for which the search was conducted). Tax experts point out that it’s quite common to add a wife’s name to a residential property.
However, documentation of each co-owner’s exact contribution to the property builder/sale, bank account details to which payments were made, past tax returns, etc. useful in case of tax litigation.
