1984 (3) TMI 125 - AT - Income Tax

Summary

Issues:
1. Whether the income from the property should be included in the total income of the assessee.
2. Whether the assessee ceased to be the owner of the property after entering into an agreement for sale.
3. Interpretation of relevant case laws and their applicability in determining ownership of the property.
4. Correctness of the AAC's decision based on the Bombay High Court ruling.

Detailed Analysis:
1. The primary issue in this case was whether the income from the property should be included in the total income of the assessee. The assessee argued that since he had ceased to recover rents from the tenants and the property was the subject of an agreement for sale, the income should not be included. The Income Tax Officer (ITO) disagreed, citing a Supreme Court decision that ownership does not pass until the final conveyance is executed. This led to the inclusion of the property income in the assessee's hands.

2. The second issue revolved around whether the assessee ceased to be the owner of the property after entering into the agreement for sale. The Tribunal examined previous judgments, including the Bombay High Court decision in CIT vs. Sultan Bros. P. Ltd., which held that under an agreement to sell, the vendor continues to be the owner until a registered sale deed is executed, especially when the property value exceeds a certain threshold.

3. The Tribunal analyzed various case laws cited by both parties to determine the ownership status of the property. The assessee relied on the Supreme Court decision in R. B. Jodhi Mal Kuthalia vs. CIT, while the Revenue cited judgments like CIT vs. Union Land & Building Society (P) Ltd. and CIT vs. Sultan Bros. P. Ltd. from the Bombay High Court. The Tribunal considered these precedents to ascertain the legal position on property ownership in such scenarios.

4. The correctness of the Appellate Assistant Commissioner's (AAC) decision was also a crucial aspect of the analysis. The AAC had rejected the assessee's appeal based on the Bombay High Court ruling in CIT vs. Sultan Bros. P. Ltd. The Tribunal concurred with the AAC's decision, emphasizing that the vendor remains the owner until a registered sale deed is executed, as established by the Bombay High Court's consistent stance on similar cases.

In conclusion, the Tribunal dismissed the appeals filed by the assessee, upholding the inclusion of property income in the assessee's total income based on the legal principles established by relevant case laws and the Bombay High Court's consistent interpretation of property ownership under agreements to sell.