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TMI Blog1992 (6) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... ng. He, therefore, came to the conclusion that the assessee cannot be said to be the ' owner ' of the property under section 22 of the IT Act. He, therefore, held that the income from the property should be assessed under the head ' Other sources '. 3. The assessee, though it had offered the income for taxation under the head " Income from house property ", appealed to the CIT(A) and contended that the rental income was not taxable at all. The contention of the assessee was that income from property can be assessed under the head " House property " only if the assessee is found to be the legal owner of the property. Since in the present case the assessee was admittedly not the legal owner, inasmuch as there was no sale deed executed and registered in its favour, the income from the property cannot be assessed under section 22 of the IT Act. The assessee further submitted that if the income cannot be taxed under the head ' Income from house property ' it cannot be taxed even under the head ' Other sources ' and the rental income should be held to be not taxable at all under the IT Act. The CIT(A) did not accept this submission. He upheld the order of the ITO. 4. In the further a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court has held that the term in " owner " should be interpreted in its broadest possible meaning and that if a person has paid the sale consideration and is also in possession of the property, the fact that a formal sale deed was not executed and registered in his favour conveying the title in the property to him cannot stand in the way of treating the person as the owner of the property for the purpose of section 22 of the IT Act. He further pointed out that in the present case it was not in dispute that the assessee has factually let out the property and was in receipt of rental income. He submitted that the assessee having derived a benefit from the property cannot demur to an assessment of the income, whether, it be under the head " property " or " other sources ". He lastly submitted that if it is found by the Tribunal that the income is not assessable under the head ' other sources ' it should be directed by the Tribunal to be assessed under the head ' property ' following the decision of the Calcutta High Court in Madgul Udyog's case. As for the decisions relied on by Mr. Poddar, Mr. Sen submitted that they are all distinguishable on facts. He further drew our attentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers were also assessed on the notional income or actual income arising from the flats from the date of their taking possession. The question arose as to whether the assessee, the builder of the flats, was assessable under section 22 of the Act in respect of the notional income from the property even after the flats had been handed over to the buyers. It was in this context that the High Court was called upon to decide the true meaning and import of the word " owner " appearing in section 22. It was submitted in that case on behalf of the assessee that even though no formal sale deeds were executed and registered in favour of the purchasers of the flats since the assessee-builder had transferred all its light, title and interest in the flats sold by it and had also handed over possession, it was not assessable as " owner " in respect of the notional income from the property under section 22 of the Act. It was held by the High Court that the word ' owner ' appearing in section 22 of the Act was comprehensive and generic and must be construed in the setting of the socio-economic development in the concept of owner. It was held that for the purpose of section 22, the owner must be that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rinciple of the decision in Madgul Udyog's case should be confined to cases of flat-builders or sellers of the properties. Such an understanding of the decision is not, in our view, justified, in view of the broad meaning attributed by the Hon'ble High Court to the word " owner " in section 22. It is true that the Hon'ble High Court was concerned with the case of a seller of the property. However, the decision of the Hon'ble High Court on the scope and ambit of the term ' owner ' appearing in section 22 of the Act is in general terms and it is not for us to attempt any subtle distinction, as suggested by Mr. Poddar, as to the application of the ratio of the decision. 8. There is one more reason why the submission of Mr. Poddar that the decision of the Calcutta High Court in Madgul Udyog's case cannot be applied to the facts of the present case cannot be accepted. Mr. Poddar cited the decision of the Calcutta High Court in the case of Ganga Properties Ltd. in support of his contention that in the absence of a registered deed conveying the title to the property to the assessee, the assessee cannot be taxed in respect of the income therefrom. This decision was also considered by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the meaning to be given to the word " owner " must be in consonance with the principles underlying the Income-tax Act. Since the focus of section 22 of the 1961 Act is also on the receipt of the income, it is the assessee in the present case who is to be treated as " owner " of the property. Such an interpretation would be in consonance with the principles underlying the Act, since one of the basic objects of the Act is to tax income where it is found. The treatment of the assessee in the present case as ' owner ' of the property cannot also be said to be oppressive, since it is the assessee which is in receipt of the income from the property for which it is asked to pay tax. 11. At this juncture, we have to notice an agreement put forward by Mr. Poddar based on the provisions of section 2(47)(v) of the Act. This clause was inserted by the Finance Act, 1987, with effect from 1-4-1988. By this clause, the meaning of the word " transfer " in relation to capital assets was expanded to include transactions involving the allowing of possession of an immovable property in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act. According ..... X X X X Extracts X X X X X X X X Extracts X X X X
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