Law:

Section:

Section 23(2), read with sections 27(1) and 64 of Income-tax Act, 1961 - Income from house property - Annual value - Assessment years 1967-68 to 1969-70 - Assessee's wife purchased a property out of amount gifted by him - ITO included its income in assessee's hands under section 64(1)(iv) - AAC accepted assessee's contention that income from self-occupied property was to be computed in wife's hands subject to a maximum value of 10 per cent of other income of owner of property and that income from house property could be included in assessee's hands under section 64(1)(iv) - Tribunal held that income from house property was to be computed at 10 per cent of total income of assessee, and not that of wife of assessee - Whether since property transferred was not a house property but a cash amount from which assessee's wife purchased house, it could not be said that assessee would be a fictional owner of house under section 27(i) - Held, yes - Whether, when assessee was not owner, his other income could not be considered for working out maximum value of income from house property under proviso to section 23(2) - Held, yes - Whether, therefore, order passed by Tribunal was liable to be set-aside - Held, yes FACTS The assessee's wife had purchased a house out of certain amount gifted by him. The property was self-occupied for the assessment years 1967-68 to 1969-70, the ITO included the income from the house property in the assessee's hands under section 64(1)(iv). On appeal, the AAC, however, accepted the contention that having regard to the proviso to section 23(2) income from self occupied property was to be computed in the wife's hands subject to a maximum value of 10 per cent of the other income of the owner of the property and that the income from house property could be included in the assessee's hands under section 64(1)(iv). On revenue's appeal, the tribunal held that once the income from house property was includible in the assessee's hands, as a necessary corollary, the annual value of the assessee's residential house had to be computed at 10 per cent of the other income of the assessee. On reference : HELD Both sections 23(2) and 64(1)(iv ) operated in…

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