Husband Paid For Jointly Bought Property; So Wife Cannot Be Taxed, Says Income Tax Tribunal

The Income Tax Appellate Tribunal (ITAT) in Kolkata has ruled in favour of a woman, deleting the additional income of Rs 7.09 lakh from her records after examining that her husband, although named as a joint purchaser of the property, had paid entirely for the property. The property was bought in financial year 2014-15 for Rs 16,31,438. The stamp valuation authority placed its value at Rs 30,51,000. The difference between the two figures came to Rs 14,19,562.

Why Her Name Drew A Tax Addition

The assessing officer (AO) treated the couple as equal purchasers as both names were mentioned in the deed. The Rs 14.19 lakh difference was split into two, and Mrs Shome’s half—Rs 7,09,781—was added to her income under Section 56(2)(vii)(b) of the Income-tax Act, 1961.

The provision applies when an immovable property is acquired for less than its stamp duty value. The difference could be taxed in the buyer’s hands. The addition was made through an order dated May 30, 2023, according to a report in the Economic Times. Mrs Shome appealed, but the Commissioner of Income Tax (Appeals) rejected her case on August 26, 2025. She then moved the ITAT.

Bank Records Told A Different Story

Her case before the tribunal was that a name in the deed did not prove that she had paid half the price. In fact, she had paid nothing. Mrs Shome said her husband funded the property and paid the builder directly. She produced his bank statement and cheque-wise payment details. She also said she received no financial benefit from the transaction.

The Income Tax Department, however, justified the addition on the ground that she was a joint purchaser.

What The ITAT Found

The tribunal referred to Section 45 of the Transfer of Property Act, 1882. It permits equal ownership to be presumed when there is no evidence of how much each joint purchaser had contributed. Here, such evidence was available.

The records showed that the husband paid the entire purchase consideration. The Income Tax Department did not produce anything to contradict them or make a corresponding inquiry in his case.

The ITAT said the amount contributed by each purchaser had to be examined before Section 56(2)(vii)(b) could be applied. Since Mrs Shome had not put any money into the purchase, the addition could not be made in her hands. The ITAT directed the AO to delete Rs 7,09,781 from her income.

Married couples often buy property jointly even when only one spouse provides the money. If their contributions are unequal, bank statements, loan records and builder receipts can help show who actually funded the purchase if questions arise later.

FAQs

1. Does being named as a joint property buyer automatically mean equal tax liability?
No. The contribution made by each buyer and the supporting payment records must also be examined.

 2. Why was Rs 7.09 lakh added to Mrs Shome’s income?
The AO presumed that she owned half the property and taxed half the difference between the property’s purchase price and the stamp duty value.

3. Which records should joint property buyers preserve?
They should retain bank statements, cheque details, loan documents and builder receipts showing how much each buyer contributed.