Law:

Section:

Section 263, read with sections 22 and 68, of the Income-tax Act, 1961 - Revision - Of orders prejudicial to interest of revenue - Assessment years 1979-80 and 1980-81 - Assessee disclosed certain investments in a property and showed in balance sheet a sum of Rs. 70,000 as loan taken from 'D' - ITO completed proceedings under section 143(2) - Thereafter a notice under section 263 was issued by Commissioner as he was of view that Income-tax Officer had failed to consider income from property which according to assessee was transferred by him to his wife in discharge of dower debt and further Income-tax Officer did not make full enquiries in respect of investment of Rs. 70,000 through loan from 'D' and directed to calculate taxable income after making full and complete enquiry - On appeal, Tribunal having considered affidavit filed by 'D' clarifying position that he had advanced loan to assessee and fact that for assessment year 1981-82, ITO examined in detail matter regarding a further loan by 'D' to assessee, concluded that it would be unnecessary for ITO to go into enquiry once again - Further, Tribunal was of view that there was nothing in Muslim Law to prevent a husband from choosing to pay dower debt or wife from accepting it - Whether there was no illegality in order of Tribunal in respect of borrowing of Rs. 70,000 from 'D' - Held, yes - Whether since assessee's wife after transfer of property let it out to tenants and realising rent therefrom and her name had also been mutated in municipal records, Tribunal rightly came to conclusion that assessee ceased to be owner of property in question after transfer and his wife became owner within meaning of section 22 - Held, yes - Whether since department could not point out any illegality in order of Tribunal holding that under Muslim Law, a husband is liable to pay dower to his wife, Tribunal was justified in excluding income from property from assessment of assessee - Held, yes CASES REFERRED TO Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83/ 109 Taxman 66 (SC) [Para 5], Ghulam Abbas v. Mt. Razia Begum AIR 1951 All. 86 (FB) [Para 7], R.B. Jodha Mal Kuthiala v. CIT [1971] 82 ITR 570 (SC) [Para 7] and…

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