The Income Tax Appellate Tribunal (ITAT) ruled that if a registered sale document did not define the extent of a husband and wife’s holdings, then both will be considered to own an equal part of the home.
In the instance of Shivani Madan (the taxpayer), the Delhi bench of the ITAT affirmed the imposition of Rs 9.8 lakh in taxes on her behalf during the fiscal year 2014–15. (the year of the litigation). According to a TOI article, 50% of the notional rent on a vacant property was held taxable in the wife’s hand under the Income Tax Act.
In the past, a company group was searched, and it just so happened that Madan worked there. After the searches, it was discovered that she and her husband jointly purchased the house in 2011 for Rs 3.5 crore. Following this, people began to wonder why the income tax on this house property was not disclosed in her tax return.
In proportion to her ownership interest in the property, Madan reacted with the income from the residence. She had only put down Rs. 20 lakh (or around 5.4% of the total value) in the property.
The proportional income idea was rejected at various points throughout the debate. The submissions were ultimately rejected by the ITAT. It was observed that the Calcutta High Court had ruled that property income should only be taxed in the name of the husband because the wife was a housewife with no other source of income and the husband had made all of the investment decisions. Madan, on the other hand, was a paid employee.
