A woman whose name appeared as a co-purchaser of an immovable property has won an dispute after proving that her husband had paid the entire purchase consideration.
The Income Tax Appellate Tribunal (ITAT), Kolkata, deleted an addition of ₹7,09,781 made in her hands under Section 56(2)(vii)(b) of the Income-tax Act, 1961, holding that the evidence showed she had not contributed towards the purchase.
The ruling was delivered on 20 August 2026 by the Kolkata bench of the ITAT. The case is reported as 2026 (8) TMI 1579 – ITAT Kolkata. The bench comprised Judicial Member Yogesh Kumar U.S. and Accountant Member Rakesh Mishra.
Property was bought for ₹16.31 lakh
The dispute arose from an immovable purchased jointly by the assessee, Mrs Shome, and her husband. The purchase consideration stated in the transaction was ₹16,31,438, while the market value determined by the Stamp Valuation Authority was ₹30,51,000.
The difference between the two values was about ₹14.20 lakh.
The tax department treated 50% of this difference, or ₹7,09,781, as income in the wife’s hands under Section 56(2)(vii)(b). The provision, which applied to the relevant assessment year, dealt with situations where immovable property was acquired for inadequate consideration compared with its stamp-duty value.
The case relates to the woman’s assessment for the relevant assessment year arising from the financial year 2014-15 transaction.
The assessment was reopened after the department received information concerning the property transaction, and a notice under Section 148 of the Income-tax Act was issued.
An assessment order under Section 147 was subsequently passed on 30 May 2023, making the ₹7,09,781 addition under Section 56(2)(vii)(b).
Why the department taxed the wife
The key issue was the wife’s name on the purchase document.
The Revenue argued before the ITAT that the sale deed showed the woman as a joint owner of the property along with her husband. It therefore treated her as having a 50% interest and brought half of the difference between the purchase price and stamp valuation to tax.
The department maintained that the Assessing Officer had therefore correctly considered ₹7,09,781 as income that had escaped assessment in the wife’s hands.
The woman, however, disputed the assumption that she had a 50% financial interest in the property.
Her case was that she had not contributed any money towards the purchase and that her husband had paid the entire consideration.
Bank records helped establish who paid
During the assessment proceedings, the woman produced evidence to support her claim that the purchase consideration had been paid entirely by her husband.
The ITAT noted that the payment trail supported the wife’s contention. It also recorded that the Revenue had not made any further enquiry by issuing notice to her husband, even though the wife had consistently maintained that he had funded the entire purchase.
The tribunal further noted that the husband’s name appeared first in the sale deed as purchaser.
This evidence became central to the tribunal’s decision because the question was not simply whether the wife’s name appeared on the property document. It was also necessary to determine whether she had actually contributed to the acquisition and therefore had an interest in the property for the purpose of the disputed tax addition.
ITAT applied Section 45 of Transfer of Property Act
The tribunal referred to Section 45 of the Transfer of Property Act, 1882, which deals with the respective interests of persons who jointly acquire property.
The provision provides for an equal-interest presumption when there is no evidence about the respective or the amounts contributed by the purchasers.
In this case, however, the tribunal found that such evidence was available.
The payment records showed that the entire consideration had been paid by the husband. The tribunal therefore held that the presumption of equal ownership could not be applied to the wife when the evidence demonstrated that she had not contributed towards the purchase.
The tribunal’s reasoning was particularly relevant to Section 56(2)(vii)(b). The provision could not simply be invoked against a joint purchaser without examining who had actually contributed to the acquisition and who had received the alleged benefit arising from the difference between the stated consideration and the stamp-duty value.
₹7.09 lakh addition deleted
The ITAT ultimately held that the addition could not be sustained in the wife’s hands.
The tribunal noted that the evidence established that the husband had paid the entire purchase consideration, while the wife had made no contribution. The Revenue had also failed to rebut this evidence or conduct a corresponding enquiry against the husband.
On this basis, the Kolkata bench concluded that the ₹7,09,781 addition under Section 56(2)(vii)(b) could not be sustained in the wife’s assessment and directed that it be deleted.
For taxpayers, the ruling highlights why the source of funds and payment trail should be properly documented when a property is purchased jointly but the contributions of the co-purchasers are unequal.