Ownership of mortgaged house property under court receiver control stays with the mortgagor for income-tax purposes.

For house property under a court-appointed receiver, the decisive question under section 9 of the Income-tax Act, 1922, was who qualified as the "owner". The provision fastened liability on the owner, and the allowance for mortgage interest indicated that a mortgagor remained liable despite an English mortgage. A receiver in possession and management under court directions did not acquire ownership, and the mortgagee was not treated as owner because the legal estate remained with the mortgagor. The annual value was therefore includible in the assessee's assessment, and the mortgagor was treated as the owner for section 9.

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Issues: Whether the annual value of house property under the management of a court-appointed receiver was assessable in the assessee's hands under section 9 of the Income-tax Act, 1922, and, in particular, who was the "owner" for the purpose of that provision.

Analysis: The reference arose from assessment of house property comprised in an English mortgage where a receiver had been appointed pending the mortgage suit. The decisive question was the meaning of "owner" in section 9(1) of the Income-tax Act, 1922. The provision fastens liability on the owner of property, and section 9(1)(iv) contemplates a mortgage burden by allowing deduction of interest on the mortgage, which indicates that the mortgagor remains the person liable in respect of the property notwithstanding the mortgage. The receiver, being only an officer of the Court in possession and management of the property under the Court's directions, does not acquire ownership. The mortgagee also is not the owner for this purpose, because even under an English form mortgage executed in India the legal estate remains with the mortgagor.

Conclusion: The mortgagor was the owner within section 9, the receiver was not the owner, and the annual value was rightly included in the assessee's assessment; the reference was answered against the assessee on that point.

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