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TMI Blog1981 (12) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... . The ITO had, however, computed the income in respect of the three assessment years much before the registration of the document. He had included the income from this property in the assessee's hands on the ground that till the document was registered the assessee was the owner of the property. 3. The CIT (A), however, accepted that the assessee had given possession of the property to the purchaser w.e.f. 1st April, 1970 and therefore from that date onwards no income could be assessed in the assessee's hands. He examined the provisions of the Indian Registration Act in order to ascertain whether the registration of the document in 1976 would relate back to the date on which possession was given to the vendee. According to him, the Supreme Court decision in Ramasaran vs. Domale Daur AIR 1961 SC 1747 is an authority for the proposition that a sale deed is operative from the date of execution of the deed. He also relied on the decision of the Calcutta High Court in the case of CIT vs. Ganga Properties Ltd. (1970) 77 ITR 637 (Cal) and held that on the registration of the sale deed the sale will be effective and operative from the date of the execution of the sale deed, i.e., 7th Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision. A copy of the decision of the tribunal has been supplied to us and it is at page 35 of the paper book given by the assessee. In ITA Nos. 49 to 52/JP/1975-76 dt 9th Feb., 1981, the Jaipur Bench has made the following observation on this point: "A perusal of s. 47 of the Registration Act makes it clear that the moment registration is done, the fetters created by s. 17 are automatically removed and the sale deed becomes operative immediately in the same manner as it would have operative had there been no condition of registration u/s 17. Once sale deed is registered, the importance of s. 17 is completely lost. The importance of section 17 is there so long as sale deed is not registered. After registration of a sale deed is done it would release back to the date of its execution. It means that after the registration, there is no informity in a sale deed and like the other document on which no condition is imposed by any law, it becomes operative right from the date of its execution. So the sale deed would have been operative right from the date of its execution, i.e. 5th August 1970 but its immediate operation was suspended by virtue of the fact that a condition, compulso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he had left a number of properties, some of which are : (1) City Palace; (2) Sahelionki-bari; (3) Nahar Magra (Diwan Odi Building); (4) Shil Nikunj Buildings; (5) Haridasji-ki-Magri and (6) Nahar Magra Properties. The income from these properties had been assessed in the hands of the assessee individual from the asst. yr. 1956-57 till 1969-70. On 1st April, 1969, the assessee made a declaration. In the declaration he stated that he along with his wife, his mother and stepmother and his two sons constitute an HUF. The properties noticed earlier belonged to the HUF. He then stated: "I hereby declare that the said properties be treated as HUF properties from today i.e. 1st April, 1969 and the income accruing, arising or receivable from the said properties would also be the income of the above HUF from the date". 9. As a consequence of this declaration, the assessee did not show the income from these properties in the returns filed by him as an individual. However, a return was filed for the HUF wherein these incomes were declared. The ITO was of opinion that the assessee ought to be assessed on these incomes because the properties belonged to an impartible estate of the Rulers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndari in Bihar and an impartible estate, but it was not immune from Indian Laws as would be apparent from the innumerable litigations even on tax matters by both Zamindari and they being reported cases need not be referred or supported the proposition that the Zamindari/impartible estate were amenable to the Indian Laws. That being so, the question that arises for determination is whether the Maharaja of Jaipur was a holder of the impartible estate. The history of Jaipur lies deep in the hearty past which may be called mediaeval and it cannot be held that it was an impartible estate as understood in law. The Rulers of Jaipur were absolute Rulers, Monarchs and if we may call them Kings, who made all laws, who were the fountain of all Laws and administered them in the manner they wanted. Upto 1947, when India attained Independence, no Indian Law was applicable to the Rule including the IPC and the Tax Laws. He administered the estate as an absolute Over Lord and the King was undisturbed by any Laws of the British India, if we may call it so before 1947. That being the position, though of course, the characteristic of the impartible estate of being the absolute holder was there in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder s. 10(19), the income from this Palace was exempt. However, it would appear that the assessee had converted this Palace into a Hotel. The assessee was claiming that even after converting this Palace into a hotel, he would continue to enjoy the exemption u/s 10(19A). The ITO did not accept this contention. But the CIT (A) held that the assessee would continue to have the benefit of the exemption. The department is in appeal. We find that this point is covered by an earlier decision of the Jaipur Bench for the asst. yrs. 1968-69 and 1969-70. For the reasons stated in that order, we hold that the assessee would continue to enjoy the exemption for the asst. yr. 1971-72. The provision has been amended w.e.f. 1st April, 1972 and the assessee would no longer be entitled to the exemption if it is not used for his occupation. 12. For the asst. yr. 1972-73, one additional point has been raised. The assessee had a small curio shop in the City Palace which was being run as a hotel. For the accounting year relevant to the asst. yr. 1972-73, the assessee claimed a loss of Rs. 27,846. The loss was rejected by the ITO on the ground that no details had been given as to how the loss was arri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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