The Hyderabad Income Tax Appellate Tribunal (ITAT) refused to shift a wife’s reported capital gain of Rs 75,725 to her husband under Section 64(1)(iv). Moneycontrol’s account says the claim was raised only after the time to reopen the husband’s assessment had expired; he had filed no return for the year, and the wife had not responded to earlier notices. The ruling, as reported, turned on those circumstances—not on a general exemption for gains from property gifted between spouses.
What happened in the Hyderabad case
Moneycontrol reports that the wife had not filed an income-tax return for the relevant assessment year. The Assessing Officer received information that she and another person had made a fixed deposit of Rs 31.2 lakh. A notice under Section 148 was issued on August 28, 2018, followed by a notice under Section 142(1); according to the report, she did not respond to either.
After a final show-cause notice dated December 12, 2019, she replied on December 18. She filed a return and said the fixed deposit had been funded from the proceeds of property her husband had gifted to her. She argued that Section 64(1)(iv) meant the gain should be assessed in her husband’s hands. The Assessing Officer added Rs 75,725 as capital gains to her income.
The tribunal reportedly noted that she raised the clubbing claim only after the limitation period for issuing a reassessment notice to her husband had expired. It also noted that he had filed no return for the year, leaving no return in which the Assessing Officer could assess the income. In the circumstances described by Moneycontrol, the ITAT rejected her claim and the gain remained taxable in her hands. Moneycontrol’s report reproduces the tribunal’s reasoning; the specific order’s full case name, appeal number, bench details and a primary-order link are not provided there.
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What Section 64(1)(iv) generally concerns
As described in the report, Section 64(1)(iv) provides for income arising from assets transferred directly or indirectly to a spouse without adequate consideration to be included in the transferor’s income. The report quotes tax adviser Mihir Tanna of SK Patodia LLP as saying the marital relationship must exist both when the asset is transferred and when the income or gain accrues.
That general framework is why the Hyderabad result should not be read as a rule that capital gains on property gifted by a husband are always taxable only to the wife. The report’s account emphasizes the late claim and the surrounding assessment circumstances. It does not establish that the tribunal created a general exception to spouse-income clubbing. The full statutory text and underlying order are not reproduced in the report, so a specific transaction requires advice based on the applicable law and facts.
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Why timing and the assessment record mattered
The reported decision hinged on how and when the claim was made in this assessment—not just on who originally owned the property. The wife did not respond to the earlier notices, and she raised the request to assess the gain in her husband’s hands after the period to reopen his assessment had expired. The husband had also filed no return for that year. The tribunal reportedly concluded that, given this conduct and procedural posture, it could not accept the claim.
This is a case-specific account, not a calculation of the notice or reassessment deadlines that apply to other taxpayers. A person receiving a tax notice should not assume that a clubbing argument can be raised later without consequences; the facts, applicable deadlines and available assessment procedure need to be reviewed promptly.
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A separate Bangalore ITAT decision illustrates the opposite reported tax treatment. TaxOSmart identifies it as Sushama Rajesh Rao v. DCIT, ITA No. 49/Bang/2023, dated August 18, 2025. Its summary says the tribunal treated capital gains from land gifted by a husband as taxable in the husband’s hands under Section 64(1)(iv), in a different fact pattern involving a 2009 gift and a 2011 sale. This is secondary reporting, not a basis for treating the two cases as identical. Read the TaxOSmart case summary.
A 2017 Hyderabad ITAT matter, Marri Swaroopa, involved a distinct dispute about whether the wife remained the transferor after registered sale-cum-GPA documents and a subsequent sale by the GPA holders. Its factual narrative centers on the documents and ownership sequence, not the late clubbing claim described in the later report. Read the hosted judgment transcription.
Together, these reports point to the questions that can distinguish cases: whether the income arose from the original gifted asset, whether the transfer was without adequate consideration, when a clubbing claim was raised, whether the transferor could still be assessed, and what the documents establish about transfer, title and sale.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Records to keep and steps to take after a notice
For a spousal property gift, retain documents that establish the transfer and the source and movement of funds. Tanna’s advice, as quoted by Moneycontrol, includes the donor’s PAN, bank statements, income-tax returns and, where relevant, financial statements, as well as a properly executed gift deed for immovable property recording the donor, donee, date and transfer details.
Quick Recap
- Read the notice and act by its stated deadline. Do not leave a response or a potentially relevant clubbing position until the assessment is advanced.
- Assemble the transaction record. Gather the gift deed, ownership and sale documents, bank records tracing sale proceeds, and relevant tax records for both spouses.
- Get advice on the specific assessment. A qualified Indian tax adviser or chartered accountant can assess the applicable clubbing provisions, procedure and deadlines; the reported cases do not determine liability for another person’s transaction.
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