LALITHA BODA,NELLORE vs. ITO, WARD -1, GUDUR

ITA 887/HYD/2026Status: DisposedITAT Hyderabad30 September 2026AY 2012-1310 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that while ordinarily, income arising from a property received as a gift from a spouse is assessable in the hands of the spouse under Section 64 of the Act, the facts of this case warranted a different conclusion. The assessee failed to disclose this fact to the AO in response to the notice under Section 148 or by filing a return of income. The claim was made only in response to a show cause notice after the limitation period for issuing a notice under Section 148 to the husband had expired. The Tribunal found this conduct to be mischievous, aimed at avoiding tax liability either in the assessee's hands or the husband's hands. Furthermore, the husband had also not filed any return of income for the relevant assessment year, leaving no opportunity for the AO to assess the income in his hands. Consequently, the Tribunal found no reason to interfere with the orders of the authorities below and upheld the addition. No issue was expressly left undecided.

What were the facts?

The assessee, Lalitha Boda, is an individual who did not file a return of income for Assessment Year 2012-2013. The Assessing Officer (AO) received information about a joint fixed deposit of Rs. 31,20,000/- made by the assessee and Smt. Boda Siddamma. A notice under Section 148 was issued on 28.08.2018. The assessee did not reply to this notice or a subsequent notice under Section 142(1). After a show cause notice dated 12.12.2019, the assessee filed a reply on 18.12.2019, submitting a return of income and explaining the source of the fixed deposit as sale of property gifted by her husband. The AO made an addition of Rs. 75,725/- on account of capital gains from the sale of this property. The assessee's appeal to the CIT(A) was unsuccessful. The appeal is now before the ITAT.

What were the issues?

1. Whether the capital gains arising from the sale of immovable property gifted by the appellant's husband are taxable in the hands of the appellant, or should be clubbed in the hands of the husband under Section 64(1)(iv) of the Income Tax Act, 1961, despite the delay in disclosure. Assessee's contentions: The assessee argued that as per Section 64(1)(iv) of the Act, income arising from an asset received as a gift from a spouse is to be assessed in the hands of the spouse (husband in this case), not the assessee. They relied on the ITAT Bangalore Bench decision in Sushama Rajesh Rao vs. DCIT, and Supreme Court judgments in CIT vs. Maharaj Kumar Kamal Singh, ITO vs. Ch. Atchaiah, and Sevantilal Maneklal Sheth vs. CIT. The assessee further contended that the CIT(A) erred in rejecting judicial precedents solely on the ground that the husband had not filed an income tax return, as this is not a precondition under Section 64(1)(iv). Revenue's contentions: The revenue argued that the assessee deliberately delayed disclosing the source of income and the applicability of Section 64(1)(iv) until after the limitation period for issuing a notice under Section 148 to the husband had expired. This conduct was seen as an attempt to avoid tax liability in the hands of either the assessee or the husband. The revenue relied on the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 64(1)(iv),Section 143(3),Section 147,Section 148,Section 142(1),Section 139,Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD

Before: SHRI VIJAY PAL RAO

Pronounced: 30.09.2026

This appeal by the Assessee is directed against the Order dated 30.01.2026 of the learned ADDL/JCIT(A)-1, Nashik, for the Assessment Year 2012-2013. 2. The Assessee has raised the following grounds of appeal:

“Ground 1. That under the facts and circumstances of the 1) case, the orders passed by the Commissioner of Income-tax (Appeals) (in short CIT(A)) us 250 of IT Act dated 30.01.2026, confirming the order passed by Assessing Officer (AO) us. 143(3) r.w.s 147 of the IT Act

The order continues below.

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