Co-owned property income assessable as Association of Persons where spouses' shares are indeterminate and finances are joint.

Jointly acquired flat financed from the independent salaries of an assessee and his wife, with loan repayment routed through a joint account, could not be treated as acquired mainly from the assessee's own savings. Because the spouses' incomes were distinct, the wife's income was not includible under section 64 of the Income-tax Act, and the respective shares in the property were not definite or ascertainable, the income from the flat was assessable in the status of an Association of Persons rather than in the assessee's individual hands.

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Issues: Whether the income from the jointly acquired flat was liable to be assessed in the hands of the assessee individually or in the status of an Association of Persons where the property was purchased with joint contributions of the assessee and his wife and the shares were not definite and ascertainable.

Analysis: The property was acquired through joint financial resources of the assessee and his wife, both having independent salary income. The allotment itself depended on income eligibility, and the repayment of the loan and other obligations was made from the joint account into which their salaries were deposited. In these circumstances, the investment could not be treated as having been made mainly from the assessee's own savings. Since the spouses' incomes were distinct and the wife's income was not includible under section 64 of the Income-tax Act, and the respective shares in the property were not definite or ascertainable, the statutory scheme governing assessment of co-owned property supported assessment in the status of an Association of Persons.

Conclusion: The income from the flat was required to be assessed in the status of an Association of Persons and not as the individual income of the assessee. The issue was decided in favour of the assessee.

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