Ownership requirement for house property income excludes a mere lessee without construction from section 22 treatment

Income from a leasehold property is assessable as "income from house property" only where the assessee is the owner for the purposes of section 22. A lessee who has not raised any construction on the leased land cannot be treated as the owner merely because the property is held on lease. The earlier precedent relied on by the Tribunal was inapplicable because it concerned a lessee who had itself erected the construction and earned income from it. On these facts, the income could not be brought to tax under the head "Income from house property" in the assessee's hands.

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Issues: Whether income from a leasehold property, where the assessee was only a lessee and had not raised any construction thereon, could be assessed as income from "house property" under section 22 of the Income-tax Act, 1961.

Analysis: Section 22 applies where the assessee is the owner of the property. The Tribunal had treated the lessee as owner by relying on an earlier decision concerning a lessee who had actually erected construction and derived income from it. That precedent was held inapplicable because, in the present case, the assessee had not raised any structure on the leased land and was deriving income merely from the existing house property let out by the lessor. On those facts, the assessee could not be treated as the owner for the purpose of section 22.

Conclusion: The income could not be assessed under the head "Income from house property" in the assessee's hands on the footing of ownership; the question was answered in the negative and in favour of the Revenue.

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