Issue : – The respondent in Tax References Cases Nos. 9-10 of 1986 is a company and an assessee under the Act (hereinafter called the “assessee”). It owns four flats bearing Nos. 231, 232, 241 and 242 in a building called “Silver Arch” on Nepean Sea Road, Bombay. The builders of the said building are Malabar Industries Pvt. Ltd. Out of the four aforesaid flats, two were directly purchased by the respondent-company from the builders and the other two were purchased by its sister concern and subsequently by the assessee. The possession of the flats was taken after payment of consideration in full some time in August, 1973. It is common ground that all these flats have been let out to various persons. The rental income from these flats was included in the return for the assessment years in question, namely, 1975-76 and 1976-77. It was the case of the assessee that the rental income from the flats was asses sable as “income from other sources” under section 56 of the Act inasmuch as the assessee-company was not the “legal owner” of the property in the flats. Such a claim was put forward before the Assessing Officer mainly on the ground that the title to the property (four flats) had not been conveyed to the co-operative society which was formed by the purchasers of the flats and that so long as the ownership was not transferred in the name of the assessee, the rental income from the flats could not be assessed as “income from house property” (under section 22 of the Act).
Held : – We are conscious of the settled position that under the common law, “owner” means a person who has got valid title legally conveyed to him after complying with the requirements of law such as the Transfer of Property Act, Registration Act, etc. But, in the context of section 22 of the Income-tax Act, having regard to the ground realities and further having regard to the object of the Income-tax Act, namely, “to tax the income”, we are of the view, “owner” is a person who is entitled to receive income from the property in his own right.
Supreme Court of India
Commissioner Of Income-Tax
vs
M/S. Podar Cement Pvt. Ltd. Etc.
Date : 27 May, 1997
TAX REFERENCES CASE NOS. 9 AND 10 OF 1986 AND
CA NOS. 4165 OF 1994 AND 4549 OF 1995
Equivalent citations: AIR 1997 SC 2523, 1997 226 ITR 625 SC
Author: K Venkataswami.
Bench: K Paripoornan, K Venkataswami, B Kirpal
ORDER
