1992 (2) TMI 45 - HC - Income Tax

Summary

Issues:
1. Determination of ownership of a house property standing in the names of two minor sons.
2. Tax liability on income from the house property in question.

Analysis:

Issue 1: Determination of ownership of the house property
The case involved the assessment of an individual (referred to as "the assessee") for the assessment years 1977-78 and 1978-79 by the Income-tax Officer, Ward 'C', Bhubaneswar. The Assessing Officer found that a plot of land was purchased in the names of the assessee's two minor sons, but it was alleged that the funds for the purchase and construction of a house on the land actually belonged to the assessee. The Assessing Officer concluded that the investments were made by the assessee and not by the grandmother of the minor sons, as claimed. The Tribunal upheld this view, stating that the entire investment came from the assessee's funds, and the income from the property should be included in the assessee's assessments. The High Court declined to answer the question of ownership, as it was deemed a factual matter, and endorsed the Tribunal's decision that the assessee was the actual owner of the property.

Issue 2: Tax liability on income from the house property
Regarding the tax liability on the income generated from the house property, the Tribunal did not make a specific finding on whether the actual title to the property vested in the assessee's sons. However, it held that the assessee was the real owner and, even if hypothetically the title vested with the minor sons, section 64(1)(v) of the Income-tax Act would apply, making the income taxable in the hands of the assessee. The High Court found that since there was no explicit finding by the Tribunal regarding the title ownership, the second question was academic. Given the factual determination that the assessee was the actual owner of the property, the High Court declined to answer the second question.

In conclusion, the High Court disposed of the references, upholding the Tribunal's decision that the assessee was the true owner of the house property in question. The court did not find it necessary to address the specific questions raised in the references due to the factual determinations made by the Assessing Officer and affirmed by the appellate authorities.