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TMI Blog1982 (7) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, the income from the house was liable to be assessed in the hands of the assessee. Accordingly, a sum of Rs. 3,500 was added to the assessee's income in the assessment year 1969-70 on this score. It may be mentioned that the aforesaid amount was arrived at by applying the provisions of s. 23(2) of the I.T. Act, as it was held that the house as being used by the assessee for his own residence. On appeal by the assessee, the AAC, Lucknow, held that the ITO was justified in rejecting he claim of the assessee regarding the giving of the loan amounting to s. 61,000 to his wife. As the assessee had given only Rs. 1, I 1,000 out of e total cost of the house amounting to Rs. 1,40,000, the AAC held that only 4/5ths, income from the house could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he lady had no other source of income then nothing could be added u/s 64(iii) of the I.T. Act, 1961 ? " The Tribunal has, however, referred only one question which is as follows: " Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the Provisions of section 23(2) of the Income-tax Act were applicable while applying the provisions of section 64(iii) and that if the wife of the assessee had no other source of income then nothing could be added under section 64(iii) of the Income-tax Act, 1961, in the hands of the assessee ?" The learned counsel appearing for the department has contended that the view of the Tribunal that the provisions of s. 23(2) of the I.T. Act were applicable while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 23. As admittedly the property is in the occupation of the owner for the purposes of his own residence, the annual value has to be determined in accordance with s. 23(2) of the Act. Section 23(2) of the Act provides as follows : " 23. (2) Where the property consists of (i) a house in the occupation of the owner for the purposes of his own residence, the annual value of such house shall first be determined in the same manner as if the property had been let and further be reduced by one-half of the amount so determined or one thousand and eight hundred rupees, whichever is less ; (ii) more than one house in the occupation of the owner for the purposes of his own residence, the provisions of clause (i) shall apply only in respect of one o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iso to s. 23(2) of the Act, which expressly lays down that the limit of 10% specified therein is referable to the other income of the owner of the residential house. In the present case, the assessee did not transfer the house to his wife. He merely gifted a sum of Rs. 50,000 to her which she utilised in constructing the house. In the circumstances, it is the assessee's wife who is the owner of the house and by no stretch of imagination can it be said that the house was owned by the assessee or that the assessee was its owner. Accordingly, in the instant case, while determining the annual value of the residential house the limit of 10 per cent. specified in the proviso to s. 23(2) has to be worked out with reference to the other income o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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