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TMI Blog1975 (3) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... question with which we are concerned relates to the income of Rs. 4,457, derived by renting out the building which was constructed on a plot of land which belonged to the assessee's wife with funds furnished, according to the findings entered by the Tribunal, in its entirety, by the assessee, is liable to be taxed in the hands of the assessee as income derived from an asset directly or indirectly transferred by the assessee to his spouse falling within section 64(1)(iii) of the Income-tax Act, 1961. That section is in these terms:- " 64. (1) In computing the total income of any individual, there shall be included all such income as arises directly or indirectly............... (iii) subject to the provisions of clause (i) of section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his hands", the Tribunal has not proceeded on the basis that the property belonged to the assessee and that the wife was merely a name-lender, to use the word adopted by the Income-tax Officer, for the husband. The Tribunal has proceeded on the footing that the property belonged to the wife, the entire amount required for constructing the building on the plot having been provided by the husband. It his further found that such advance by the husband was without adequate consideration. That this is so is clear from the question that is referred to us which speaks of income from the property "belonging to the wife". The plot of 20 cents on which the building was constructed belonged exclusively to the assessee's wife. The entire cost of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue weight by the Tribunal. That there was a contention by the assessee in this regard is clear from the "remand report". The Income-tax Officer stated : " The fact that property stands on the plot of the wife does not make any difference-the rent received is for the building and not for the plot. At best from the property income, an estimated ground rent might be calculated and allowed to the wife. Since no ground rent is paid to the wife-in fact the wife does not enjoy any part of the income-there is no question of allowing any ground rent from the income of the property." In the grounds of appeal before the Tribunal the contention was specifically raised in ground No. 3 that "in any view of the matter it is an admitted fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " When a question of law is raised before the Tribunal but the Tribunal fails to deal with it, it must be deemed to have been dealt with by it, and is, therefore, one arising out of its order." On behalf of the department, counsel, Sri P. A. Francis, urged relying on the decision of this court in Clen Leven Estates Ltd. v. Commissioner of Income-tax, that the rule that what has been erected in land belongs to the land is a principle not applicable to India and that, therefore, the building cannot be said to be owned by the owner of the plot of the land on which it was constructed. This principle has no application whatever in deciding the question before us which we may state is only about the application of section 64(1)(iii) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust depend on both the factors, the location and situation of the land and its value, and the usefulness and the facilities afforded by the building. What part of the rent is attributable to the building alone will have, therefore, to be determined. This has not been done. The question referred to us, therefore, can only be answered in the following manner. The Tribunal has erred in including the entire income (the sum of Rs. 4,457) as income derived from the assets transferred directly or indirectly by the assessee to his wife. There is no doubt that the income derived from the assets transferred by the assessee to his wife can only be a part of the sum of Rs. 4,557. What part it is is not for us to decide nor have we any material before u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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