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Issues Involved:
1. Whether the property income of Rs. 1,00,228 pertaining to 1/2 share of Tiecicon House, Bombay, is assessable in the assessment of the assessee for the assessment year 1972-73. Summary: Issue 1: Assessability of Property Income The Income-tax Appellate Tribunal referred the question of whether the property income of Rs. 1,00,228 from 1/2 share of Tiecicon House, Bombay, is assessable in the hands of the assessee for the assessment year 1972-73. The assessee had purchased a 1/2 share in Tiecicon House by an unregistered assignment deed dated March 29, 1967, and sold it to Eklingji Trust by another assignment deed dated September 29, 1970, which was presented for registration on December 24, 1970, and registered on May 17, 1975. The assessing authority held that the title to immovable property passes from the date of registration and assessed the income in the hands of the assessee. The Appellate Assistant Commissioner, however, allowed the appeal, directing the Income-tax Officer to verify the registration and exclude the income if the registration was found correct. The Tribunal concluded that the title does not pass without a registered sale deed, and thus, the income should be assessed in the hands of the assessee. The assessee contended that the sale was complete on the date of execution or at least on the date of presentation for registration, invoking section 47 of the Indian Registration Act and section 53A of the Transfer of Property Act, arguing that Eklingji Trust was the owner during the relevant assessment year. The Department argued that immovable property can only be transferred by a registered instrument as per section 54 of the Transfer of Property Act, and the registration was completed in 1975, making the transfer effective only then. The court considered various precedents, including Ram Saran Lall v. Mst. Domini Kuer and Hiralal Agrawal v. Rampadarath Singh, which emphasized that a sale is not complete until the registration is completed. The court also reviewed section 22 of the Income-tax Act, which charges the income from property to the owner, and section 53A of the Transfer of Property Act, which protects the transferee in possession under an unregistered contract. The court concluded that the income received by the transferee should be taxed in the hands of the transferee, not the transferor, especially since the sale deed was executed and presented for registration before the relevant assessment year. The court held that the assessee ceased to have any right, title, or interest in the property after the execution and presentation of the sale deed. Conclusion: The reference was answered in favor of the assessee, holding that the Tribunal was not justified in assessing the property income of Rs. 1,00,228 in the hands of the assessee for the assessment year 1972-73. No order as to costs.
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