Co-ownership of property income limits tax to the assessee's proportionate share where spouse funding is separate and unproven as a loan.

Property income was assessable only in proportion to the assessee's ownership interest where the property stood in the wife's name, the assessee funded most of the acquisition and construction, and the bank finance obtained by the wife was a separate source not shown to be a loan from the spouse. In the absence of material proving that the wife's contribution was merely borrowed funds, the parties were treated as co-owners with interests aligned to their respective contributions. Section 64 could not be used to bring the wife's share to tax in the assessee's hands, so only his proportionate share of the property income was includible.

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Issues: Whether the assessee was the sole owner of the property so that the entire property income was assessable in his hands, or whether the property was jointly owned with his wife and only his proportionate share of the income could be included.

Analysis: The property stood in the wife's name, but the assessee had provided the bulk of the funds for acquisition and construction. The amount advanced by the bank was obtained by the wife under an arrangement with the bank and constituted a distinct source not traceable to the assessee. On the facts, there was no material to hold that the assessee had merely borrowed that sum from his wife. In the absence of such material, the only reasonable inference was that the assessee and his wife held the property as co-owners, their interests corresponding to the funds contributed. The revenue could not invoke section 64 to include the wife's share.

Conclusion: Only the assessee's proportionate share of the property income was includible in his hands, and not the entire income.

Final Conclusion: The departmental challenge to the exclusion of the wife's share failed, and the assessment was confined to the assessee's own interest in the property.

Ratio Decidendi: Where property is acquired and constructed substantially out of the assessee's funds but a part is financed through a separate source in the spouse's name, and there is no material to show a mere loan from the spouse, the parties may be treated as co-owners and income is taxable only in proportion to their respective interests.

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