9911796707
TMI Blog2000 (2) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessment years 1975-76, 1976-77, 1977-78 and 1979-80, the Income-tax Officer has questioned the assessee why the income from leasehold property, which has been sub-leased to Surendra Overseas Limited, should not be taxed in the hands of the assessee and also why that income should not be taxed as income from house property. After hearing the assessee, the gross rent estimated in the aforesaid years was taxed in the hands of the assessee as income from house property. In appeal, the Commissioner of Income-tax (Appeals) has directed that income from the leasehold property should be assessed under the head "Business". Being aggrieved, the Revenue carried the matter before the Tribunal and the Tribunal has taken the view that as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited was on certain terms. Their Lord ships further observed that no new facts can be introduced by the High Court. Their Lordships further observed that the High Court has not addressed itself to the main issue upon which the Tribunal had allowed the Revenue's appeal inasmuch as the sub-lease was not effected under a registered document, the interest in the property does not pass and, there fore, the income in question continues to be the income of the assessee. Their Lordships further observed that the High Court has also not dealt with the question on the finding of the Tribunal that if income is not taxed in the hands of the assessee, it can go untaxed. For these reasons, the judgment of the High Court was set aside and the matter was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee-company and spent an additional sum of Rs. 73,43,613, from 30th November, 1970, till 30th September, 1977. During this period, the assessee-company did not incur any expenditure for construction of the property. (c) It is specifically stated by the Assistant Commissioner of Income tax that the assessee-company did not incur any expenditure for construction of the superstructure on the leasehold land during the period from 1st October, 1970, to 30th September, 1977. This was confirmed by the Assessing Officer while passing the order under section 254 of the Act in respect of the assessee-company for the assessment years 1975-76, 1976-77 and 1977-78. This finding of the Assessing Officer was also confirmed by the Commissioner of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom that multi-storeyed building, which has been constructed by Surendra Overseas Limited. That income cannot be taxed in the hands of the assessee. He placed reliance on the decision of the apex court in the case of CIT v. Podar Cement Pvt. Ltd. [1997] 226 ITR 625. Now, the facts are not in dispute that the property in question has been subleased by the assessee to Surendra Overseas Limited. The possession has been taken over by Surendra Overseas Limited. The rent has been received after that sublease by Surendra Overseas Limited, of that property from October 1, 1972 (sic) to September 30, 1977, which includes the previous years relevant to the years under consideration. We have gone through the decision of the apex court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the settled position that under the common law, 'owner' means a person who has got valid title legally conveyed to him after complying with the requirements of law such as the Transfer of Property Act, Registration Act, etc. But, in the context of section 22 of the Income-tax Act, having regard to the ground realities and further having regard to the object of the Income-tax Act, namely, 'to tax the income', we are of the view, 'owner' is a person who is entitled to receive income from the property in his own right." Their Lordships made it clear that they are conscious of the settled position that under the common law, "owner" means "a person who has got valid title legally conveyed to him after complying with the provisions of the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer that when the income is not taxed in the hands of the assessee who is liable to pay tax under the Act, can that be taxed in the hands of any other person, only on the ground that the income has not been taxed in the hands who is liable to pay tax under the Act, 1961 ? He failed to show any provision to this effect. Considering this factual position and the provision of the law, we found no substance in the view taken by the Tribunal that if income has not been taxed in the hands of "A" who is liable to pay tax under the Act, that can be taxed in the hands of "B", when under the provisions, that is not taxable in the hands of "B". In the result, we answer the question in the negative, i.e., in favour of the assessee and against ..... X X X X Extracts X X X X X X X X Extracts X X X X
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