TaxTMI 
TaxTMI 
2015 (9) TMI 706
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....is a colourable transaction and therefore, the same is assessable under the head, "income from other sources"; and in ground no. 4 the assessee has challenged the disallowance made u/s 14A read with Rule 8D. 3. The assessee is an individual and a owner of a house property who has filed her return of income at an income of Rs. 1,39,38,925/-. Such a return of income also included 'income from house property' computed at Rs. 12,65,575/- on a gross rent of Rs. 18,25,000/-. On the verification of the details of rent, the AO noted that assessee has received the rent from her husband in respect of the property which was also occupied by the assessee herself. He observed that the assessee has received rent from her husband in respect of self occup....
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....s ground on this score. 5. Before us, learned counsels Shri Arun Sathe and Ms. Aarti Sathe submitted that under the "Hindu Adoptions and Maintenance Act, 1956", it is the duty of the husband to provide residence and maintenance of the wife. Thus, when the assessee was residing with her husband, then she was under a conjugal right and the responsibility of maintenance is with the husband, which also includes providing residence. Otherwise also, there is no prohibition under the Act that wife cannot charge rent from her husband. Here in this case the property is owned by the assessee and the assessee has all the rights to let out her property to any person including her husband. Learned counsel further brought to our notice that in the subse....
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....sists of a house or part of a house which- (a) is in the occupation of the owner for the purposes of his own residence; or (b) cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside at that other place in a building not belonging to him, the annual value of such house or part of the house shall be taken to be nil." Section 23 only provides the computation of annual value under certain deeming conditions as the operating part of section 23(1) reads as under: "For the purposes of section 22, the annual value of any property shall be deemed to be............. From the plain reading of Subsection (2) it is evident that the annual....
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....h the cases of husband and wife should have been examined. If the money received by the assessee has been shown by letting out of the property, then it has to be taxed 'as income from house property' unless some material is brought on record to controvert the transaction. Further as brought on record by the learned counsel, the department itself in the subsequent year has accepted the rent received from husband as chargeable to tax under the head income from house property. Thus, on the facts of the case, the assessee's income from letting out the property is to be taxed under the head "income from house property". Accordingly, the ground raised by the assessee is allowed. 8. In Ground no. 4, the assessee has challenged the disallowance ma....