Husband Adds Wife's Name As Flat's Joint Holder; Tax Department Sends Her Notice

A homemaker from Mumbai, who earns barely a few lakhs a year, recently found herself facing a tax reassessment notice for a flat worth Rs 6.75 crore, according to a recent report by The Economic Times. The property in question had been bought outright by her husband, using his own funds from HDFC Bank. Her name appeared on the sale deed as a joint holder, nothing more. That small detail, however, was enough for the tax department to send her a notice under Section 148, alleging that income had “escaped assessment.”

She explained her position — she had not contributed a single rupee, her income that year was only Rs 4.36 lakh, and her husband had entirely funded the flat. The paperwork supported her statement: bank transfers, payment receipts, and the purchase deed all indicated that her husband was the actual buyer. Yet the Assessing Officer brushed her reply aside and pressed on.

The Bombay High Court was not impressed. Justices B.P. Colabawalla and Firdosh P. Pooniwalla quashed the notice, remarking that the officer had no reason to assume hidden income on her part. “When the records clearly show that the entire consideration came from her husband’s account,” the bench observed, “we fail to understand how the officer could have concluded otherwise.”

Ironically, the husband, too, received a similar notice for the same transaction — that matter is still pending. But for the wife, at least, the cloud has lifted.

This is not an isolated case. Only last year, in Kalpita Arun Lanjekar v. ITO, a homemaker’s joint ownership of a flat led to an identical dispute, and the court reached the same conclusion. These rulings acknowledge something deeply rooted in Indian family life: it is common for a spouse’s or relative’s name to be added to a property deed out of convenience, affection, or security, without any financial contribution.

For homeowners, the lesson is clear. If only one person pays for a property, the sale deed should say so. Declarations, gift deeds, or loan agreements must be properly drawn up when money is exchanged. Otherwise, an innocent co-owner risks being dragged into proceedings unnecessarily.

The wider message is equally important. Tax reassessment cannot be based on assumptions tied to names on paper. It requires evidence of actual income. In striking down the notice, the High Court has reminded the tax department of that principle — and given some comfort to thousands of homemakers in similar situations.