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Issues involved: Interpretation of ownership u/s 22 of the Income-tax Act, 1961 regarding properties under a will.
Summary: The case involved a dispute regarding the ownership of properties under a will, specifically whether the assessee, wife of the testator, was the owner of the properties for the purpose of income tax assessment u/s 22 of the Income-tax Act, 1961. The will created a life estate in favor of the wife, with conditions regarding the occupation and rental income from the properties. The Income Tax Officer (ITO) added rental income to the assessee's assessment, which was later deleted by the Appellate Assistant Commissioner (AAC). The Tribunal held that the assessee, as the life estate holder, was the owner of the properties u/s 22 of the Act, leading to the current references challenging this conclusion for different assessment years. For the assessment year 1967-68, the AAC had previously ruled against including the rental income, but it's unclear if this decision was appealed. The key question was whether the wife, as per the will's conditions, could be considered the owner of the properties under section 22 of the Act. The will specified that the wife could enjoy the income during her lifetime, subject to conditions regarding her sons' occupation and voluntary vacation of the properties. The court analyzed the legal concept of ownership and the rights conferred on the wife in the will. It was emphasized that even a life estate holder must have some rights in the property to be considered the owner. The court cited legal definitions of ownership and precedent cases to support its interpretation. Ultimately, the court concluded that the wife did not have ownership rights in the properties as long as her sons occupied them, and therefore, she could not be deemed the owner for the purpose of income tax assessment u/s 22 of the Act. The court rejected the revenue's argument that denying ownership to the wife would create a vacuum, stating that such a situation did not exist in this case. The decision was based on the specific terms of the will and the nature of the interest created for the wife. The question referred to the court was answered in the negative, in favor of the assessee, who was awarded costs.
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