Law:

Section:

Section 22 of the Income-tax Act, 1961 [Corresponding to section 9(1) of Indian Income-tax Act, 1922] - Income from house property - Chargeable as - Under a deed, father of assessee gave to his two sons, including assessee, two houses which he had constructed out of his private funds - Deed though styled as partition deed was infact gift deed - It was clearly stipulated in deed that property belonged to father of assessee and that in case assessee desired to alienate property, his brother would be given preference to purchase at prevailed market price - Whether property got by assessee under document became his individual property and, therefore, income obtained from that property was individual income of assessee - Held, yes FACTS The father of the assessee had purchased a vacant site out of own private funds and had constructed eleven houses thereon. The father gave two houses under a deed to two sons including the assessee. The deed though styled as partition deed was infact a gift deed. It was stated therein in clear terms that the property belonged to the father of the assessee, and that it was he who had put up the foundations of the houses therein. The document further stipulated, that if the assessee or his brother desired to alienate the property given to them, they should give preference to the other brother to purchase at the prevailing market price. The ITO, the AAC, the Tribunal and the High Court concurrently concluded that the property was the absolute property of the assessee and the income obtained from the property was the individual income of the assessee. On appeal to the Supreme Court: HELD Reading the document as a whole, there was hardly any doubt that the property dealt with under that document was the individual property of father of assessee. The property got under that document by the assessee became his individual property. It was not the case of the assessee that the assessee had surrendered that property to the family. The High Court was fully justified in holding that the income obtained from that property was the individual income of the assessee. The appeal was dismissed. Note : The case was decided in favour of the revenue.…

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