Wife gets income tax notice after husband sells joint property Rs 14 lakh below market price; she fights back and wins the case in ITAT Kolkata

Mrs Shome from Birati received an income tax notice after her husband sold their joint property for Rs 16.31 lakh in FY2014-2015. Although the money was deposited into his State Bank of India (SBI) account, the tax notice was triggered because the stamp duty valuation authority assessed the property’s market value at Rs 30.51 lakh

It’s hard to believe that anybody would want to sell their property at such a significant loss, i.e about Rs 14.2 lakh below market value. This led the income tax Assessing Officer (AO) to suspect that the Shome family had some undisclosed income, prompting a reopening of her tax file.

On May 30, 2023, the AO issued an assessment order which added Rs 7.09 lakh (which is 50% of the Rs 14.2 lakh difference) to Mrs Shome’s income and made her liable to pay income tax on this amount. This addition was made under Section 56(2)(vii)(b). Feeling aggrieved, Mrs Shome filed an appeal with the Commissioner of Appeals (CIT A). On August 26, 2025, CIT (A) dismissed her appeal.


She next appealed to the Income Tax Appellate Tribunal (ITAT) Kolkata. Judicial member Yogesh Kumar U.S and Accountant member Rakesh Mishra heard her case in ITAT Kolkata. On August 20, 2026 she won the case in ITAT Kolkata. Chartered Accountant Miraj D Shah represented her before ITAT Kolkata. The Income Tax Department was represented by Senior representative Ujjawal Mandal.

Miraj D Shah argued before ITAT Kolkata that Mrs Shome is a nominal co-owner of the property which Mr Shome had sold. Mrs Shome did not contribute any money to purchase this property and didn’t get any benefit from the sale. Shah told the ITAT that Mr Shome had financed the property investment entirely from his own resources and under Section 45 of the Transfer of Property Act, 1882, which deals with joint transactions, the full sale consideration was paid by her husband who was shown as the first purchaser in the sale deed.

Thus for taxation purposes, her husband needed to be treated as the owner and not Mrs Shome. Shah also argued that since she got no benefit from this sale, any income which might have escaped assessment should not be clubbed with her income.

Senior Income Tax Department representative Ujjawal Mandal argued that Mrs Shome is the owner of the property which was jointly purchased by her husband. Therefore, the Assessing Officer rightly considered that Mrs Shome has income which escaped assessment (which is 50%: Rs 7,09,781).

Also read: Paid Rs 6.5 crore and bought a property with stamp duty value of Rs 8.85 crore, got income tax notice for unexplained investment; He fought back won relief in ITAT

On August 20, 2026 she won the case in ITAT Kolkata.

Why did she win the case in ITAT Kolkata?

Karanjot Singh Khurana, Partner, DMD Advocates, said to ET Wealth Online Mrs Shome won the case in ITAT Kolkata by producing evidence that though she was co-owner to the property acquired, she had not made any contributions for the acquisition of said property.

According to Khurana, Section 56(2)(vii)(b) of the Income Tax Act is triggered in cases where the properties were acquired below circle rates and the difference between the cost of acquisition and circle rate is deemed as the income of the acquirer. To reiterate, in Mrs Shome's case the Income Tax Department alleged that the property was sold for Rs 14.2 lakh less than the market rate.

However, in Mrs Shome's case, since the registered sale deed bore name of two acquirers (i.e. her husband and she), the Income Tax Department presumed that both had equal share in the properties and taxed half of the concession (i.e. difference between stamp duty value and acquisition price) in Mrs Shome's name. However, the ITAT Kolkata held that the presumption of equal share cannot be sustained where there is proof to the contrary.

According to Khurana, Section 45 of the Transfer of Property Act presumes co-purchasers to be equally interested only ‘in the absence of evidence’ as to what each purchaser had advanced. The wife placed her husband’s bank statement and a cheque-wise trail demonstrating that the entire consideration for this property was paid to the builder by her husband.

Thus Khurana says that once that payment trail was established the default presumption of wife owning half the share of this property collapsed and accordingly the ITAT Kolkata held that in absence of her share in the property, the income representing the concession (i.e. sold Rs 14 lakh below market price) could not be taxed in the hands of wife (Mrs Shome).

Also read: Stamp duty vs deal value: Homebuyer gets relief as ITAT Mumbai rejects addition of Rs 18 lakh income by tax dept for property valuation gap

ITAT Kolkata order and discussion

Here’s a summary of what ITAT Kolkata said in its judgement:

Transfer of Property Act, 1882

As per Section 45 of the Transfer of Property Act, 1882, ‘in the absence of evidence as to the interest in the fund to which they were respectively entitled, or as to the share which they respectively advanced, such persons shall be presumed to be equally interested in the property.’

ITAT Kolkata said that in the present case, there is specific evidence adduced by Mrs Shome that the entire sale amount was paid by her husband, and therefore, only her husband can be presumed to be having an interest over the property.

Only husband liable to pay income tax

Further, ITAT Kolkata said that for the purpose of computing the capital gain, the respective sale consideration paid by the respective purchasers of the property will be taken into account.

ITAT Kolkata said: “Therefore even for the purpose of making addition u/s 56(2)(vii)(b), the Income Tax Department shall consider the respective shares which the purchasers advanced shall be taken into account.”

In the present case, ITAT Kolkata said that if at all an addition of income has to be made, it needs to be made in her husband’s hands as he paid the entire sale consideration.

ITAT Kolkata said: “Invocation of the provision of Section 56(2)(vii)(b) of the Act against the Assessee (Mrs Shome) who has not contributed any amount for the purchase of the immovable property cannot be sustained.”

Accordingly, ITAT Kolkata ordered the AO to delete the addition of income made in Mrs Shome’s income.