Law: Income Tax Act, 1922

Section: 16,16(3A)

(a) Income tax Act (XI of 1922)---S.16(3A) Income derived from assets transferred to spouse without adequate consideration, held, such income could be clubbed with income of individual Transfer made with adequate consideration Income from such assets in hand of a spouse could not be clubbed with income of individual transferor. (b) Income tax Act (XI of 1922) S.16(3A) Gift Transfer of property Person gifting his property to donee, held, divests himself of its ownership and same vested in donee Gift is a proper, legal and valid mode of transfer of movable or immovable property Gift accepted with adequate consideration, Depart¬ment could not club income derived from gifted property with that of donor's income. Gori Parshad Bagaria and others v. Commissioner of Income tax West Bengal (1961) 42 I T R 112 rel. (c) Income tax Act (XI of 1922) S.16 (3 A) Transfer of money made in shape of gift for valid and adequate consideration Appellate Tribunal, held, justified in holding that adequate consideration was available for transfer of money to wife. (d) Income tax Act (XI of 1922) S.16(3 A) Income from property gifted to wife, held, could not be clubbed with assessee's income. (e) Income tax Act (XI of 1922) S.16(3) Proviso Jas added by Finance Act (V of 1964)] Gift made before addition of proviso Proviso added by Finance Act, 1964, held, would not apply to such gift. JUDGMENT SALEEM AKHTAR, J. By this judgment following Income tax References shall be disposed of: (1) I. T. R. Nos.565/72, 589/72, 590/72, 591172, 592/72, 593/72, 594/72, 596/72 relating to Ismail Adamji, the assessee in respect of assessment years 1962 63, 1963 64, 1964 65, 1965 66, 1966 67, 1968 69 and 1969 70, respectively and (2) I.T.R. Nos.56i/72, 562/72, 563/72, 564/72 and 588/72 relating to assessee Mst. Zubaida wife of Ismail Adamjee. These matters have been taken together as the facts and the question of law raised therein are common. Mst. Zubaida Bai had constructed a bungalow on plot No.20 4/B, P.E.C.H. Society, Karachi belonging to her with the funds advanced to her by her husband Ismail Adamjee, the respondent assessee. Up to April 1961 a total amount of Rs.70,000 was advanced as loan,…

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