The case ITA No. 498/DEL/2021 involves Shivani Madan, a resident of New Delhi, appealing against the order of CIT(A)-24 New Delhi for the assessment years 2016-17 and 2017-18. The primary issues pertain to the assessment of notional rent from a property co-owned with her husband and the associated legal and tax implications.
The main legal issues involve the assessment of notional rent and the determination of property ownership shares. The property in question, located in Saket, New Delhi, was jointly purchased with her husband without a specified share of ownership, leading to a dispute over the income assessable from the property under the ‘income from house property’ head.
The Assessing Officer, relying on sections 22 and 23 of the Income Tax Act, assessed the property’s annual letting value at 8% of its cost, attributing half of this income to Shivani Madan. This assessment was based on the assumption of equal ownership due to the absence of specified shares in the property deed.
The appeal to the CIT(A) and subsequently to the ITAT upheld the Assessing Officer’s decision, citing precedents and legal interpretations that in the absence of specified shares in co-owned property, equal shares are assumed. This has significant implications for tax liabilities related to jointly owned properties, especially between spouses.
This detailed analysis explores the complexities of property ownership, notional rent assessment, and their impact on tax liabilities under Indian tax law, providing valuable insights for legal professionals and taxpayers dealing with similar issues.
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