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Issues:
1. Whether the Tribunal was right in holding that no addition can be made as 'income from house property' in a case where the ownership of a building is disputed due to pending civil court action? 2. Whether the rent or compensation from a sub-tenant is chargeable only in the year of receipt under the head 'Income from other sources'? Analysis: Issue 1: The case involved a dispute regarding the ownership of a building on a leased plot of land. The assessee had sublet the plot to a company, and when the sub-tenant defaulted on rent, the assessee exercised her right to forfeit the lease. The Income-tax Officer added the rental income as 'income from house property,' but the assessee contended that she could not be considered the owner until the civil court resolved the dispute. The Commissioner (Appeals) and the Tribunal agreed with the assessee, stating that until the court made a final determination, the assessee's right to the building remained uncertain. The Tribunal correctly noted that the right of an assessee in a disputed matter only becomes permanent upon a court's final decision. Additionally, the Transfer of Property Act allows for relief against forfeiture, further supporting the view that the assessee's right was inchoate. Therefore, the Tribunal's decision to not add house property income under section 22 of the Act was upheld. Issue 2: Regarding the second issue, the Commissioner (Appeals) directed the Income-tax Officer to tax the lease amount due to the assessee for the accounting period. The assessee argued that under the cash system of accounting, the lease amount should be taxed as 'Income from other sources' in the year of receipt. The Tribunal agreed with the assessee, noting her consistent accounting method and commitment to offering rent or compensation for taxation in the year of receipt. The Tribunal's decision that rent or compensation should be chargeable only in the year of receipt was found to be correct. The court upheld this finding, indicating no error in the Tribunal's decision. In conclusion, both questions were answered in the affirmative and against the Revenue, affirming the Tribunal's decisions on both issues.
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