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TMI Blog1992 (5) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... ties under the Transfer of Property Act and the Indian Registration Act. The assessee-company had handed over possession to SOL and also received full consideration in anticipation of the proposed sale by the assessee-company. As a result of this arrangement the SOL realised rents to the extent of Rs. 4,48,345 in each of the years from the tenants of the said godowns. It was contended by the assessee-company before the assessing Officer at the original assessment stage that since it was not the owner of the godowns and also did not enjoy or receive any income therefrom it cannot be assessed in respect of the rental income of the said godowns under section 22 of the Income-tax Act, 1961. The Assessing Officer did not agree with the contention of the assessee-company for the reason that since no registered deed of conveyance has been executed by the assessee-company in favour of SOL the assessee-company continued to be the 'legal owner' of the said godowns/house properties and as such it has to be assessed under the head 'income from house property' in respect of rental income of the godowns for the two assessment years. While assessing the assessee under section 22 the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that since the assessee has not executed and registered a proper deed of conveyance in favour of SOL it continued to be the legal owner and the title still vested in it and, therefore, as per the provision of sections 22 to 24 the assessee-company was rightly assessed in respect of the rental income though received by M/s. SOL. To support his submissions the departmental representative has also relied on the decision of the Hon'ble Calcutta High Court in the case of Ganga Properties Ltd. The departmental representative also brought to our notice from the discussion made by the CIT(Appeals) in the impugned order at page 5 (para 2) that the assessee had re-transferred the said godowns during the previous year relevant to assessment year 1979-80. According to the departmental representative this arrangement with M/s. SOL was a make believe arrangement. It is, therefore, pleaded by the learned departmental representative that the order of the learned CIT(Appeals) was erroneous and as such should not be upheld by us. 5. The learned counsel for the assessee, Sri A. K. Roychowdhury while supporting the order of the CIT(Appeals) submitted that no doubt the assessee-company had not ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the assessee's counsel that the Assessing Officer was not right in taking the aid and recourse to the provision of section 60 of the Income-tax Act, 1961 as there was no direction by 'C' Bench of this Tribunal in its order dated 26-6-1979. In fact, in para 6 of that order of the Tribunal, we find that the Tribunal has stated that there is no dispute that in the absence of a registered deed of conveyance the assessee continued to be the legal owner of the godowns during the relevant accounting years. In the said para the Tribunal has further observed as under : " We do not also have before us all the documents which are necessary for a proper determination of the point at issue. In the circumstances we would dispose of this ground by setting aside the decision of the Assessing Officer on this limited question and restoring the appeals to his file, direct him to adjudicate the point afresh in accordance with law bearing in mind the observation made by us hereinabove. " Thus, no particular or specific direction was given by the Tribunal while remanding the matter. The matter was left to be decided afresh in accordance with law. The only direction was that the observation m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on were constructed and sold as stock-in-trade and not as capital assets. Earlier cases including the case of Ganga Properties [1970] 77 ITR 637 are, therefore, clearly distinguishable on facts. The question of notional income should not arise in relation to stock-in-trade particularly when the business income arising on sale has already been assessed in the hands of the assessee-firm in respective years in which the construction was completed and possession was handed over. " In our opinion, therefore, the judgment of the Hon'ble Calcutta High Court in Ganga Properties Ltd's case still rules the field in the interpretation and application of the provision of section 22 of the Income-tax Act, 1961 for facts and controversy as found in the present appeals. The decision of the Calcutta High Court in Park Hotel (P.) Ltd's case is distinguishable on facts. 8. Very curious results will follow if we accept the contention of the assessee's counsel that since full consideration was received by the assessee-company and it had handed over physical possession of the property to the intending purchaser it has ceased to be owner and therefore, cannot be assessed under section 22. We wish to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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