2014 (6) TMI 888

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..... wife is her income. This principle of duality applies to all other transactions entered into between husband and wife, unless it is otherwise specified by the parties. Except a general proposition, the Commissioner of Income-tax (Appeals) has no material before him to hold that the sale of property made by the assessee was not in the nature of a business transaction. - order of the Commissioner of Income-tax (Appeals) is erroneous and liable to be set aside. Regarding the order of the Assessing Officer, we hold that he has erred in applying the provision of section 50C, while computing the business income. Therefore, it has become necessary for us to set aside the orders of the lower authorities, as far as this issue is concerned - Decided .....

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..... income of the assessee. This addition was carried in the first appeal, before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) held that there cannot be a business transaction between wife and husband and, therefore, the profit arising to the assessee out of the above stated transaction cannot be treated as business income. On the other hand, the Commissioner of Income-tax (Appeals) held that the profit arising to the assessee from the said transaction should be taxed as capital gains. The Commissioner of Income-tax (Appeals), accordingly, upheld the application of section 50C, confirmed the adoption of guideline value and directed the Assessing Officer to assess the surplus as capital gains. 4. The asse .....

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..... lding the transaction as a transfer of assets giving rise to capital gains. The Commissioner of Income-tax (Appeals) cannot make a general proposition that there cannot be a business transaction between husband and wife. The Income-tax Act, for its own purpose does not accept the family relationship of husband and wife. They are always treated as separate individuals. The income earned by the assessee is his income and the income earned by his wife is her income. This principle of duality applies to all other transactions entered into between husband and wife, unless it is otherwise specified by the parties. Except a general proposition, the Commissioner of Income-tax (Appeals) has no material before him to hold that the sale of property ma .....

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