1982 (2) TMI 11 - HC - Income Tax

Summary

Issues:
1. Whether the properties in question were owned by the husband and wife as tenants-in-common?
2. Whether the assessment made on the body of individuals is bad in law?

Analysis:

Issue 1:
The case involved a reference under the Gift Tax Act, where the Appellate Tribunal had to determine if the properties in question were owned by the husband and wife as tenants-in-common. The husband and wife, married under the Portuguese Civil Code, made gifts of properties. The Tribunal held that each spouse had a distinct and separate share in the properties, upholding the contention that they were co-tenants, not joint tenants. The Court referred to a previous Supreme Court decision where it was established that each spouse had a half share in the properties gifted, making the gift a separate share by each spouse. The Court analyzed the relevant provisions of the Portuguese Civil Code to determine the nature of ownership and interest of the spouses in the gifted properties. It concluded that each spouse gifted only their respective half share, and the gifts had to be assessed separately and equally in the hands of the spouses.

Issue 2:
The second issue revolved around the legality of the assessment made on the body of individuals. The Court's analysis of the Portuguese Civil Code provisions led to the conclusion that the gifts made by the spouses were not as a body of individuals but as separate owners of half shares in the properties. Therefore, the assessment on the body of individuals was deemed incorrect in law. The Court answered both questions in favor of the assessees, directing the Commissioner to pay the costs of the reference to the assessees.