Income-tax ownership in substance defeats provisional attachment where full consideration and possession have passed without registered conveyance.

For income-tax purposes, a purchaser who has paid full consideration and obtained possession in law may be treated as the owner even without a registered conveyance, because the transfer and deeming provisions give legal effect to a completed transaction in substance. On that basis, provisional attachment under section 281B cannot be sustained against property that has already passed to the purchaser in substance, and attachment over such property is without jurisdiction and excessive. The writ challenge was also maintainable because it raised legality and jurisdictional error rather than disputed facts requiring relegation to a civil suit.

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Issues: (i) whether the writ petition was maintainable despite the Revenue's plea of disputed questions of fact and alternative remedy; (ii) whether the provisional attachment of the property could survive when the petitioner had paid the full consideration, obtained possession in law, and was treated as the deemed owner under the Income-tax Act, 1961.

Issue (i): whether the writ petition was maintainable despite the Revenue's plea of disputed questions of fact and alternative remedy.

Analysis: The Court held that the earlier observations in the connected proceeding did not operate as res judicata because they had been modified. It further found that the Revenue had not shown such disputed factual issues as would compel relegation to a civil suit, particularly because the petitioner's documents evidencing agreement, payment and possession had not been duly considered. The Court also held that the challenge involved legality and jurisdictional error, and therefore could be examined in writ jurisdiction.

Conclusion: The writ petition was maintainable and could be entertained.

Issue (ii): whether the provisional attachment of the property could survive when the petitioner had paid the full consideration, obtained possession in law, and was treated as the deemed owner under the Income-tax Act, 1961.

Analysis: The Court held that for the purposes of the Income-tax Act, 1961, the definition of transfer in section 2(47) and the deeming provision in section 27(iiia) gave legal effect to a completed transaction where consideration had been paid and possession had been handed over, even though a registered conveyance had not yet been executed. It relied on the principle that ownership in this context is not confined to bare legal title and accepted that possession may be constructive and can be proved by the surrounding acts and documents. The Court further held that section 281B could not be invoked against property which had already passed to the petitioner in substance, and that the Commissioner had acted without jurisdiction in treating the property as still belonging to the assessee. The Court also held that the attachment over the petitioner's portion was excessive and unsustainable.

Conclusion: The provisional attachment, so far as it related to the petitioner's property, was invalid and liable to be set aside.

Final Conclusion: The petitioner succeeded, and the attachment affecting the property claimed by it was quashed, leaving no basis for continued restraint over that portion of the property.

Ratio Decidendi: For income-tax purposes, a purchaser who has paid full consideration and obtained possession in law can be treated as the owner notwithstanding the absence of a registered conveyance, and an attachment cannot be sustained under section 281B of the Income-tax Act, 1961 against property that has already passed in substance to such purchaser.

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