ASHUTOSH BANIK Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE statement of the case is : That the assessee is an individual. In making the assessment for the assessment year 1969-70, corresponding previous year being 1375 B.S., the ITO added a sum of Rs. 675 being the rent received for the house in holding No. 401. In his order the ITO had not given any reasons or materials for making that addition. THE assessee appealed to the AAC and brought to his notice that the assessee was originally the owner of the house property in holding No. 401 which was gifted by him to his wife in the year 1954, and since then the income therefrom was being enjoyed by the wife to the complete exclusion of the assessee. THE assessee also claimed that that income had not been included in his total income in any of the preceding assessment years and, therefore, the ITO was not justified in adding it to his income in the assessment year 1969-70, and that too without giving any reasons. THE AAC accepted his contention and held that the income from the house property in holding No. 401 should be excluded from the total income of the assessee.

(2.) THE revenue in appeal to the Tribunal contended that according to s. 27 of the I.T. Act, 1961 (hereinafter "the 1961 Act"), an individual who transfers otherwise than for adequate consideration any house property to his spouse shall be deemed to be the owner of the house property so transferred and consequently the inclusion of the income from the property in the total income of the assessee was justified and should be restored. THE assessee opposed this contention pleading that the provisions of s. 27 of the 1961 Act could not apply to the transaction of the assessee and it took place before the coming into force of the 1961 Act specially when there was no analogous section in the repealed Indian I.T. Act, 1922. THE Tribunal, however, held that the provisions of s. 27 were application since the assessment related to the assessment year 1969-70, when that section was very much in the statute book.

(3.) CONSIDERING the above facts, instead of refusing to answer the question as referred, we reframe the question as under :