TaxTMI 
TaxTMI 
1987 (3) TMI 21
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....stion: "Whether, on the facts and in the circumstances of the case, the assessee was entitled to the deduction of Rs. 12,000 under section 24(1)(iv) of the Income-tax Act, 1961 ? " Income-tax Reference No. 43 of 1974 raises this question : " Whether amounts received by the assessee's wife were liable to be included in the total income of the assessee under section 64(1)(iii) (sic) or section 60 of the Income-tax Act, 1961 ? " The assessee owns a half share in a house property known as "Aarati" and in a house property known as Father's Gift ". On December 1, 1960, the assessee executed a deed whereby, out of natural love and affection for his wife, the grantee thereunder, he covenanted with her that he would pay her, for a period....
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....read thus: " 24. (1) Income chargeable tinder the head 'Income from house property' shall, subject to the provisions of sub-section (2), be computed after making the following deductions, namely:-... . (iv) where the property is subject to an annual charge (not being a charge created by the assessee voluntarily or a capital charge), the amount of such charge;" These were substantially the provisions under the 1922 Act. A bare reading of the provision makes it clear that it is applicable to the case of the assessee. He had subjected his half share in the two properties to the annual charge of the payment of Rs. 12,000 to his wife. He was, therefore, entitled to the deduction of the amounts paid under the charge. This is borne ....
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.... Accordingly, the question in Income-tax Reference No. 332 of 1975 is answered in the affirmative and in favour of the assessee. It was contended by Mr. Jetly, learned counsel for the Revenue, that the amounts paid to the assessee's wife under the said deed were liable to be included in the assessee's total income by virtue of section 60 and/or section 64(1)(iii) of the Income-tax Act, 1961. Section 60 of the Income-tax Act, 1961, reads thus: " 60. All income arising to any person by virtue of a transfer whether revocable or not and whether effected before or after the commencement of this Act shall, where there is no transfer of the assets from which the income arises, be chargeable to income-tax as the income of the transferor....
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.... It noted that the house property had been assessed by the Income-tax Officer in the hands of the assessee under sections 22 to 26 of the said Act, because he continued to be the owner. That being so, there was no further scope for the operation of section 60 of the said Act. All that section 60 provided was that the income from the property would continue to be assessed in the hands of the assessee. That assessment had, in the case of house property, to be done only in accordance with the provisions of sections 22 to 26, and that had already been done. Section 60 did not declare that the same income had to be treated as income from other sources. Relying upon the judgment of the Supreme Court in Nalinikant Ambalal Mody v. S. A. L. Narayan ....