1990 (1) TMI 120 - AT - Income Tax

Summary

Issues:
Assessment of income from a property sold without a registered document transferring the title.

Analysis:
The appeal concerns the assessment of income from a property sold by the assessee without transferring the title through a registered document. The property, a nursing home, was sold to a company, converted into commercial flats, and further sold. The assessing officer determined the annual letting value of the property and assessed a share of it on the assessee. The AAC, relying on a Delhi High Court decision, deleted the income assessment. The revenue contended that without a registered transfer, the vendors remained owners for tax purposes. The assessee argued that the AAC's decision aligned with legal precedents and that the property's conversion into flats altered its assessment. The Tribunal considered the legal provisions of sections 22 and 23 of the Income-tax Act, emphasizing the definition of 'owner' and the determination of annual letting value. It noted that if a property is not capable of yielding rent, the letting value would be nil. The Tribunal referenced a Supreme Court decision emphasizing that ownership must entail the right to exercise control over the property. It also highlighted legislative amendments regarding possession in part performance of a contract under section 53A of the Transfer of Property Act. The Tribunal concluded that the assessee could not be taxed on the property sold and converted into flats due to the change in its form and the legislative provisions regarding ownership in such circumstances. The Tribunal upheld the AAC's decision, dismissing the revenue's appeal.