By your conduct, you have gifted to your brother in law the right to receive rental income, without transferring property. If the income is transferred without the transfer of property, it will be clubbed in the hands of the transferor u/s 60 of the Income Tax Act. For your ready reference, I am quoting the section:
"Transfer of income where there is no transfer of assets.
60. All income arising to any person by virtue of a transfer whether revocable or not and whether effected before or after the commencement of this Act shall, where there is no transfer of the assets from which the income arises, be chargeable to income-tax as the income of the transferor and shall be included in his total income. "
Hence, the rental income received by you should have been clubbed with your income, as you did not transfer the property.
However, in your case, you want the property also to be gifted to your brother in law. Transfer of immoveable property requires registration, which is not done in your case. Nor there was a will of your wife to give the property to your brother in law.
I suggest that you may execute a gift deed now and recite specifically that you allowed the use of the property to your brother in law and this gift deed is to record the gift made by you verbally.