Law:

Section:

Section 4 of the Income-tax Act, 1961 - Income - Chargeable as - Assessment year 1964-65 - Assessee owned a house property jointly with her husband and derived income from lease of such property - Subsequently, shy and her husband made a declaration that house property would be treated as belonging to HUF - Whether right to throw self-acquired property in joint hindu family is available only to a coparcener - Held, yes - Whether assessee not being coparcener could not ask income-tax authorities to treat her interest in property as joint hindu family property - Held, yes - Whether, therefore, income realised or accrued on aforesaid property was assessable as income of assessee - Held, yes FACTS The assessee, who was governed by Mitakashara Law, jointly with her husband purchased a site and a house was constructed on it. During the accounting year relevant to the assessment year 1964-65, the house was given on rent and certain rent was realised. The assessee and her husband made a declaration on 27-2-1964 that the house property was to be treated as belonging to the HUF. While filing her return of income, the assessee did not include in her return the income from the above property on the ground that it belonged to the HUF. The ITO while holding that the property became the property of the HUF with effect from 27-2-1964, was of the opinion that up to 27-2-1964, one-half of the income from the property was taxable in the hands of the assessee. The ITO, therefore, included the assessee's half share of income from the said property up to 27-2-1964, while computing her income for purposes of income-tax. On appeal, the AAC held that there was no effective abandonment or transfer of the assessee's interest in the property during the year 1963-64 in favour of the Hindu undivided family and that she remained the legal owner of her share of the property throughout the year. On second appeal, the Tribunal upheld the order of the ITO. On reference : HELD After throwing his separate property into the joint family hotchpot, the coparcener will not have abandoned all interest in the property. He has still some rights in it. While he treats his separate property as joint family…

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