1980 (10) TMI 109 - AT - Income Tax

Summary

Issues:
1. Inclusion of income from properties in the assessable income under Agrl. IT Act.
2. Dispute regarding payments made to appellant's wife and their impact on assessable income.
3. Adequacy of consideration for property transactions between the appellant and his wife.

Analysis:
1. The first issue in the judgment pertains to the inclusion of income from certain properties in the assessable income of the appellant under section 9(2) of the Agrl. IT Act. The appellant claimed that the properties belonged to his wife, but the assessing officer disagreed. The ld. AAC confirmed this finding, stating that the appellant failed to provide sufficient evidence to support his claim. The appellant argued that payments made to his wife were in accordance with the Travancore Christian Act, emphasizing the significance of Streedhanam payments in determining ownership of assets.

2. The second issue revolves around the payments made to the appellant's wife, specifically the Streedhanam payments and their implications on the assessable income. The appellant contended that if the payments were proven to be made to his wife, he acted as a trustee for those amounts and could use them to purchase properties in her favor without violating the Agrl. IT Act. The assessing officer's failure to consider the adequacy of the consideration and the historical value of the payments led to the appellate tribunal setting aside the previous orders for reassessment.

3. Lastly, the judgment addresses the adequacy of consideration for property transactions between the appellant and his wife. The tribunal emphasized that transactions between close relatives may not reflect the actual market value and can be based on nominal amounts. The historical value of payments and the assessing officer's lack of thorough investigation into the matter were highlighted as reasons for remitting the case for fresh assessment. The appellant was granted the opportunity to challenge the estimates of income and expenses during the reassessment process, ensuring a fair and comprehensive review of the case.