9911796707
TMI Blog1984 (12) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... learned departmental representative. The assessee purchased a house from the Madhya Pradesh Housing Board under an agreement dated 27-6-1977. The agreement is titled as a hire-purchase agreement. The Housing Board is described as the owner and the assessee as a hirer. Under the said agreement, the assessee made an initial deposit of Rs. 35,385.35 described as tenancy deposit and the balance of the price of the house was to be paid in monthly equated instalments during a period of 10 years commencing from 27-6-1977. For appreciation of the true nature of the transaction, it would be proper to reproduce below a few clauses from the deed : " 3. If the hirer shall actually pay to the owner the monthly equated instalments during the full term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot ; (b) If the hirer shall commit or suffer to be committed breach of any of the conditions of this agreement or of the regulations and terms and conditions made thereunder ; (c) If the hirer commits an act of bankruptcy or makes any composition or agreement with the creditors ; (d) The hirer shall suffer any execution to be levied against him under any judgment or order of a competent court. 9. The termination of the agreement hereunder shall not, in any manner whatsoever, absolve the hirer of this liability to pay the arrears of instalment and damages for breach of the terms and conditions of this agreement and those contained in the regulations or terms and conditions made thereunder. 10. Until the payment of the last equated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provides that only income of a building of which the assessee is an owner, shall be chargeable under the head ' Income from house property '. There the Legislature has used the word ' owner '. The use of different words ' belonging to the assessee ' in the 1957 Act, therefore, indicates that absolute legal ownership was not required. In Raja Mohammad Amir Ahmad Khan v. Municipal Board of Sitapur AIR 1965 SC 1923, the Hon'ble Supreme Court observed as under : " ... Though the word ' belonging ' no doubt is capable of denoting an absolute title, is nevertheless not confined to connoting that sense. Even possession of an interest less than that of full ownership could be signified by that word . . ." The precise sense which the word was me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of ownership on the assessee is automatic on the payment of the last instalment. This is clear from the terms of clause 3 of the deed. Therefore, the assessee is not a mere occupier of the house at the will of the Housing Board and because of the limited rights left with the Board and the automatic conferment of the right of ownership on the payment of the last instalment, it can be said that the house now really belongs to the assessee. Further, the Housing Board is not an institution letting out houses on rent. It is an institution, which constructs houses for bona fide residents of Madhya Pradesh and the houses are sold under what is known as a ' Hire-Purchase Scheme '. It may also be mentioned that under the 1961 Act, depreciation and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, the assessee has no right of refund of any amount on her own choice and, therefore, the amounts paid by the assessee to the Housing Board cannot be treated as her property. The result, therefore, is that if the house is treated as belonging to the assessee, we have to grant her exemption under section 5(1)(iv). On the other hand, if the house is not treated so, the amounts paid to the Housing Board cannot be treated as the assessee's wealth, because the assessee has no right to get them back. In either case, therefore, the sum of Rs. 49,897 deserved to be excluded from the assessee's wealth. 7. The appeal is, accordingly, allowed and the sum of Rs. 49,897 is hereby deleted from the assessee's wealth. - - TaxTMI - TMITax - Wealt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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