Real ownership principle allowed full house property loss and capital loss despite joint title in a family member's name.

Where a flat is placed in joint name only for convenience or safety, but one person alone funds the purchase, loan repayments, and renovation, that person may be treated as the real owner for tax purposes. On that footing, the full loss from house property was allowable and the 50% disallowance was unsustainable. The same ownership principle applied to transfer of the property: where the co-owner made no contribution, the short-term capital loss could not be restricted to 50% merely because the title deed showed joint names. The full capital loss was therefore allowable to the assessee.

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Issues: (i) Whether the entire loss from house property was allowable to the assessee where the flat stood in joint name with his but the investment and loan repayments were made only by the assessee; (ii) Whether the short term capital loss on sale of the same property could be restricted to 50% merely because the property was jointly named.

Issue (i): Whether the entire loss from house property was allowable to the assessee where the flat stood in joint name with his wife but the investment and loan repayments were made only by the assessee.

Analysis: The assessee established that the property was purchased from his own funds and that the loan instalments were also paid by him. The wife was shown only as a co-owner for safety purposes and no material showed any contribution by her towards purchase or repayment. For the purposes of income from house property, ownership is linked to the person entitled to receive the income in his own right. The factual position therefore supported taxation in the hands of the assessee as the real owner for this purpose.

Conclusion: The disallowance of 50% of the house property loss was unsustainable and the entire claim was allowable in favour of the assessee.

Issue (ii): Whether the short term capital loss on sale of the same property could be restricted to 50% merely because the property was jointly named.

Analysis: The record showed that the assessee had incurred the acquisition and renovation expenditure from his own funds and had also substantiated the renovation payments and transfer . Since the joint name did not reflect any contribution by the wife, the loss arising on transfer of the property could not be artificially divided equally. The same ownership principle applied, and the assessee alone was entitled to the full consequence of the transaction.

Conclusion: The restriction of the short term capital loss to 50% was deleted and the full loss was allowed in favour of the assessee.

Final Conclusion: The assessee succeeded on both substantive issues, and the additions/disallowances made by the lower authorities were set aside.

Ratio Decidendi: Where a property is jointly titled for convenience or safety but the entire investment and repayment are made by one person, that person may be treated as the real owner for tax purposes and cannot be denied the corresponding house property benefit or capital loss merely because another family member's name appears in the title deed.

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