TMI Blog1993 (12) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... ividends, interest, etc., and capital gains. They had no income from house property. The assessees carried the matter in appeal to the Commissioner of Income-tax (Appeals) challenging their assessment in the status of a body of individuals. The Commissioner of Income-tax (Appeals) held that their assessment in the status of body of individuals was wrong in law. He, accordingly, cancelled the said assessment and directed the Income-tax Officer to assess both the members of the communion individually. The Revenue's appeal before the Tribunal was dismissed. The Tribunal observed that the case was covered by the decision of the Bombay High Court in the case of Purushotam Gangadhar Bhende [1977] 106 ITR 932. From the decision of the Tribunal, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich can be ascertained on the termination of the communion by divorce, separation or death. What is important in this connection is that it is an admitted position that on the death of one of the spouses, communion property does not devolve by survivorship, but the half share of the deceased spouse goes by succession to his or her own heirs or legatees. Therefore, by virtue of the Portuguese Civil Code both the spouses in the present case have a fixed half share in the income from other sources, namely, income from dividends, interest as well as income arising from capital gains. If this is so, and each of them has a fixed and determined share in such income then the Tribunal was right in holding that the ascertained share of each of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alf share in the properties and hence no assessment could be made on the footing of their having made the gifts as a body of individuals. The gifts will have to be assessed separately and in equal shares in the hands of each of the two spouses. Similarly, in the case of Addl. CIT v. Mr. and Mrs. Valentino F. Pinto [1984] 150 ITR 408 (Bom), another Division Bench of this court held, in view of the judgment of this court in the case of Purushotam Gangadhar Bhende [1977] 106 ITR 932, that the respective half shares of the husband and wife in the income from business run by the communion of the husband and wife, married according to the custom of Goa, should be assessed separately in equal shares in the hands of each of them and not in the hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usband and wife in the status of individual. The same ratio, in our view, would also apply to capital gains which merely arise from the sale of such investments which are held both by the husband and wife in equal shares. In the present case, when two persons got married as a result of which a communion of interest in various types of property or income arises under the Portuguese Civil Code, they cannot be considered as having come together with the object of producing an income. Therefore, they cannot be considered as a body of individuals. In the case of CWT v. Vasudeo V. Dempo [1992] 196 ITR 216, the Supreme Court considered the case of the very assessees on the question of wealth-tax. The Supreme Court has cited with approval the dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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