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TMI Blog1986 (8) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... s not a registered person, the owner of the property, but the assessee was the owner. The appeal by the assessee is that the property in question has been in possession of the assessee for several years and the assessee was enjoying the benefits of the rental income and there was no other claimant over the property and, therefore, the department could not hold that the assessee was not the owner of the property. 4. The ITO noted in the assessment order that the assessee submitted that the assessee may be completed as per the appellate order passed by the CIT(A) earlier and the assessee had nothing more to say. The ITO pointed out that the assessee claimed the ownership of the property whereas in the past the assessment has been completed on the ground that the assessee was not the owner and as such, the property income should be assessed under the head 'other sources'. The ITO noted that the predecessor CIT(A) held that the assessee was the owner of the property on the basis of the affidavit filed by Shri. P.L. Murarka in whose name the property was standing and also on the basis of a resolution of the Board of Directors passed by the assessee company to the effect that the prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of the assessee. He emphasised that the property was in actual possession and enjoyment of Shri Muraka, director of the company and that there was no transfer of the property and that the arrangement between the director and the company was, therefore, sham and colourable. In addition, he referred to the decision of the Hon'ble Patna High Court in the case of Addl. CIT vs. Sahay Properties and Investment (1983) 34 CTR (Pat) 382 : (1983) 144 ITR 357 (Pat). The ITO found that the assessee company did not enjoy any of the rights of an owner and mere payment of rent by the director to the company was only ritual. The ITO referred to the decision of the Hon'ble Calcutta High Court in the case of CIT vs. Ganga Properties Ltd. (1970) 77 ITR 637 (Cal) before holding that the company in the present case was not the owner of the property in the absence of legal transfer and registration of the Deed. He also noted that the case of R.S. Jodhamal Kuthiala has been distinguished in number of cases, i.e. S.B. House & Land (P) Ltd. vs. CIT (1979) 119 ITR 785 (Cal) : CIT vs. Zoroastrian Building Society Ltd. (1976) 102 ITR 499 (Bom), D.C. Anand & Sons vs. CIT (1981) 131 ITR 77 (Del) Hansraj Gup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... six months before the assessee company was incorporated and therefore, it cannot be contended that Shri Muaraka had purchased the property on behalf of the assessee company. He also pointed out that till date no transfer deed was executed or registered in favour of the assessee which indicates that Shri Muaraka had no intention to transfer the property to the assessee. He, therefore, concluded that Shri Muaraka continued to be the owner of the property. Hence, these appeals by the assessee. 9. Before us, the assessee's ld. counsel emphasises the submissions and arguments made before the authorities below. It is reiteration that the assessee company was in possession of the property in question although the property stands in the name of the director. It is clarified that the Tribunal has held the point against the assessee in view of the decision in the case of Ganga Properties. It is urged that in the present case the property was in the adverse possession of the company which fact was not in dispute and, therefore, on that fact alone, the company-assessee could be treated to be the owner of the property particularly when the company factually and legally realises rent from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the Hon'ble Supreme Court was also considered by the Hon'ble Calcutta High Court in the case of Ganga Properties Ltd., in which amongst other things, it was also held that in Indian Law beneficial ownership is not known and there is but one owner, namely, the legal owner. 13. It may not be out of place to refer to another decision of the Hon'ble Supreme Court in the case of Ram Baran Prasad vs. Ram Mohit Hazara AIR 1967 (SC) 744 in which on the facts of that case, it was held, inter alia, that s. 54 of the Transfer of Property Act states that contract for sale of immovable, property does not of itself create any interest in or charge of such property. Thus, it is seen that even if there was any contract for sale of immovable property, such contract would not create any interest in the immovable property in view of s. 14 r/w s. 54 of the Transfer of Property Act. In the present case before us, there was of course no agreement for sale. But the assessee has simply relied on the affidavit of Shri Murarka and a resolution by the Board of Directors that the property in question purchased by Shri Murarka earlier, shall be taken over by the assessee company at the cost price and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , was erroneous. It may be true that there was no departmental appeal against the order of the then CIT(A) for the earlier year or against the order of the AAC in the appeal of Shri P.L. Murarka. But that would not give a right to the assessee to contend that the CIT(A) in the present case erred in not following in order of his predecessor given for the earlier years. No one gets a vested interest in as erroneous order. This is the view of the Hon'ble Supreme Court in the case of CIT vs. Central India Industries Ltd. (1971) 82 ITR 555 (SC) in which it was noted that the fact that the department incorrectly valued the shares in the hands of the parent company did not confer a right on the assessee company to insist that the error should also be carried to the assessment of the assessee company. in the circumstances this common ground of appeal by the assessee cannot be accepted. 16. The other common ground of appeal has been raised in the alternative that the CIT(A) erred in not allowing expenses in the computation of rental income under the head 'other sources', namely, Corporation Tax, salary, audit fees, interest on loan etc. We have heard both the sides and have gone through t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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