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1963 (3) TMI 46 - SC - Income TaxWhether income arising to Mrs. C. M. Kothari and Mrs. D. C. Kothari from the property arose indirectly out of the assets transferred indirectly by their husbands so as to attract the provisions of section 16(3)(a)(iii)? Held that:- Appeal allowed. An intimate connection between the two transactions, which were prima facie separate, is thus clearly established and they attract the words of the section, namely, " transferred directly or indirectly to the wife ". The High Court was in error in ignoring these pertinent matters. The High Court also overlooked the fact that the purchase of the house at first was intended to be in the names of the three partners of the firm. It is difficult to see why the ladies were named as the vendees if they did not have sufficient funds of their own. They could only buy the property if someone gave them the money. It is reasonable to infer from the facts that before the respective husbands paid the amounts, they looked up the law and found that the income of the property would still be regarded as their own income if they transferred any assets to their wives.
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