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TMI Blog1982 (2) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... e husband and wife as tenants-in-common ? (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the assessment made on the body of individuals is bad in law? " The facts giving rise to this reference are as follows : The respondents-assessees to this reference are Aleixo P. Velho and Smt. B. G. Velho, his wife, who have been taxed as a body of individuals. The relevant assessment year for the purpose of gift-tax is 1964-65. Aleixo and his wife, Smt. B. C. Velho, married under the Portuguese Civil Code and as a body of individuals made a gift of immovable properties of Rs. 5,12,411 and of movable properties of Rs. 9,00,000 in the relevant previous year. The question whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with presently. In CGT v. R. Valsala Amma [1971] 82 ITR 828 (SC), the assessee and her sister received under the will of their mother, inter alia, a cinema theatre building with machinery and another building called " police quarters ". Each one of them had a half share in the properties. They gifted these buildings to their brother by means of a single gift deed, and the question was whether the assessee and her sister should be assessed in respect of the gift as individuals or as an association or body of individuals. It was held that, in law, each one of them had half right in the properties which they gifted to their brother. They were holding the property and made the gift as tenants-in-common. Each one must be held to have made a gif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 932. In that decision all the relevant provisions of the said Code have been duly considered. It has been pointed out that art. 1108 of the said Code lays down that marriage as per the custom of the country consists, in communion between the consorts, of all their estates, present and future, not excluded by law. The Division Bench observed that in the case before the Division Bench art. 1117 of the said Code was a very important article. The Division Bench held that the said article enacts in unequivocal terms that " the dominion and possession " of the common estate vest in both the consorts during the subsistence of the matrimony, though the management of the estate of the couple belongs to the husband. The same article, however, pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e common estate immovable as well as movable, vests in both the husband as well as the wife. This is laid down in express terms in art. 1117. Articles 1118 and 1119 as well as 1166 are also consistent with that legal position ; (ii) Proposition No. 1 applies to the corpus as well as the income of all communion property, immovable as well as movable. The unique para. (proviso) to art. 1109 lays down that even the income of property excluded from the communion is communion property. A fortiori the income from the communion property itself must be communion property; (iii) Under arts. 1117 and 1189, the husband has only a right of management, but even that right is not an absolute right so as to amount to " ownership " of the income, in vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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