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TMI Blog1994 (7) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... ber 29, 1970, which was presented before the Sub-Registrar for registration on December 24, 1970. The deed so presented was registered on May 17, 1975. The assessee submitted before the assessing authority that the income from such property could not be assessed in her hands as she was legally divested of her title by the deed dated September 21, 1970, which was presented for registration on December 24, 1970, and registered on May 17, 1975. The assessing authority rejected the assessee's contention and held that the title to immovable property could pass from the date of registration and he accordingly assessed the income of Rs. 1,00,228 relating to the 1/2 share of such property in the assessments of the assessee. On appeal before the Appellate Assistant Commissioner, it was held that the said income could not be added in the total income of the assessee, and the appeal was allowed. The Income-tax Officer was directed to ask the appellant to produce the original copy of the sale deed so as to verify the fact of registration from the Sub-Registrar and if the fact of registration is found to be correct then to exclude the income of this property from the total income of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, however, say when a sale would be deemed to be complete. It only permits a document when registered, to operate from a certain date which may be earlier than the date when it was registered. The object of this section is to decide which of two or more registered instruments in respect of the same property is to have effect. The section applies to a document only after it has been registered. It has nothing to do with the completion of the registration and, therefore, nothing to do with the completion of a sale when the instrument is one of sale. A sale which is admittedly not completed until the registration of the instrument of sale is completed, cannot be said to have been completed earlier because by virtue of section 47 the instrument by which it is effected, after it has been registered, commences to operate from an earlier date. Therefore, we do not think that the sale in this case can be said in view of section 47 to have been completed on January 31, 1946. The view that we have taken of section 47 of the Registration Act seems to have been taken in Tilakdhari Singh v. Gour Narain, AIR 1921 patna 150. We believe that the same view was expressed in Naresh Chandra Dutta v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of its registration. Section 48 provides that all non-testamentary documents duly registered under the Registration Act, and relating to any property, whether movable or immovable, shall take effect against any oral agreement or declaration relating to such property, unless where the agreement or declaration has been accompanied or followed by delivery of possession and the same constitutes a valid transfer under any law for the time being in force. In the case of CIT v. Jhanzie Tea Association [1989] 179 ITR 295 (Cal), where the assessee, a non-resident company, entered into an agreement of sale of a tea estate with effect from January 1, 1969. and three other estates with effect from January 1, 1970, but the deeds of conveyance in favour of the purchasers were not executed within the relevant previous year, the Calcutta High Court held that there was diversion of income by overriding title and the income from tea business from January 1, 1969, in the case of one tea estate and from January 1, 1970, in respect of the other three tea estates was not liable to be assessed in the hands of the assessee. While interpreting the provisions of section 9 of the Indian Income-tax Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be within the province of the Income-tax Officer to find out who the real owner of the property is so as to fix the liability for income-tax on that owner in respect of that property. In the case of Nawab Sir Mir Osman Ali Khan (late) v. CWT [1986] 162 ITR 888, the apex court interpreted the Wealth-tax Act and held that the property in respect of which a registered sale deed has not been executed, though consideration for sale has been received and possession has been transferred to the purchaser, legally does not belong to the vendee and it continues with the vendor. Section 22 of the Income-tax Act has created a charge on the income in respect of annual value of the property consisting of any buildings or lands appurtenant thereto of which the assessee is the owner, other than such portions of such property as he may occupy for the purposes of any business or profession carried on by him the profits of which are chargeable to income-tax under the head "Income from house property". The question therefore arises as to whether the words "of which the assessee is the owner" can be applicable only to a registered owner or also to such person in whose favour the registered sale dee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether such a transferor can be made liable to make the payment of tax. Various decisions given by different High Courts have taken different views. The view of the Calcutta, Bombay, Delhi and Allahabad High Courts as mentioned above is on one hand, whereas the view of the Andhra Pradesh High Court in the case of CIT v. Nawab Mir Barket Ali Khan [1974] Tax LR 90 and the Karnataka High Court in the case of Ramkumar Mills P. Ltd. v. CIT [1989] 180 ITR 464 is different. So far as the view taken by the apex court in the case of Osman Ali Khan [1986] 162 ITR 888 is concerned that was in the context of the Wealth-tax Act where the language of the section was different. Section 53A debars a transferor from exercising the rights of an owner after he has received full consideration and handed over possession under the contract. The transferor in a case where he has executed the document and received consideration and even handed over possession of the property, cannot exercise any right of an owner. This court in the case of Rajputana Hotels Pvt. Ltd. v. State of Rajasthan (D. B. Civil Writ Petition No. 511 of 1989 decided on May 27, 1992), while interpreting the provisions of the Rajastha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was presented before the Sub-Registrar on December 24, 1970. Therefore, the income which was received by the transferee was liable to be taxed only in the hands of the transferee. We may also observe that in the case of Sirehmal Nawalkha [1985] 156 ITR 714, this court has held that the gift in respect of a property having the value of more than Rs. 100 is valid even if it is not registered. The decision in the case of Jodha Mal Kuthiala [1971] 82 ITR 570 (SC) was in respect of evacuee property and even if the observations made in that case are taken into consideration, it is evident that the transferor ceased to have any right, title or interest in the property after the execution and presentation of the document before the Sub-Registrar and could not have exercised any right of ownership in any manner. In these circumstances, we are of the opinion that since the assessee has already executed the sale deed and has presented the same for registration before the Sub-Registrar on December 24, 1970, and the income of the said property was received by the transferee, the assessee cannot be considered to be the owner thereof. Consequently, the reference is answered in favour of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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