Insolvency vesting counts as ownership for income-tax, so property annual value remained taxable in the Official Assignee's hands.

Property vested in the Official Assignee on adjudication in insolvency under the Presidency Towns Insolvency Act remained assessable to income-tax in his hands as owner under section 9 of the Indian Income-tax Act, 1922. The Court held that statutory vesting carried ownership for tax purposes, so the annual value of house property continued to be taxable even after the property passed from the insolvent to the Official Assignee. It declined to confine "owner" to a beneficial owner. Once liability was established under section 9, the question under section 41 did not arise. The assessment was therefore upheld.

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Issues: Whether property vested in the Official Assignee under the Presidency Towns Insolvency Act remained assessable to income-tax in the Official Assignee's hands as owner under section 9 of the Indian Income-tax Act, 1922.

Analysis: On adjudication in insolvency, the property vested in the Official Assignee under section 17 of the Presidency Towns Insolvency Act, 1909. The Court held that, for income-tax purposes, the vesting carried with it ownership of the property within section 9 of the Indian Income-tax Act, 1922. The annual value of house property continued to be taxable notwithstanding that the property had passed from the insolvent to the Official Assignee. The Court treated the income arising from the vested property as the income of the Official Assignee and declined to read the word "owner" as confined to beneficial owner. The question under section 41 was not required to be decided once liability was established under section 9.

Conclusion: The Official Assignee was liable to be assessed under section 9 of the Indian Income-tax Act, 1922, and the assessment was upheld.

Ratio Decidendi: Where insolvency legislation vests property in an Official Assignee, the assignee is the owner of that property for the purpose of taxation on its annual value under the income-tax law.

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