Income from other sources applies where the assessee actually receives and enjoys land income despite lacking legal title.

Income from vacant lands can be assessed under the head "Income from other sources" where the company actually received and enjoyed the income, even though legal title to the lands remained with individual family members. Section 56 was treated as wide enough to tax income of any kind not excluded from total income, and formal conveyance was not essential where the properties had in substance been transferred for consideration and the company was in possession. Section 60 was held inapplicable because this was not a mere transfer of income without transfer of the asset. Authorities on diversion of income and family arrangements were distinguished on the facts.

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Issues: Whether income from vacant lands was assessable in the hands of the company under the head "Income from other sources" even though legal ownership in the lands vested in individual members of the family.

Analysis: The reference arose in respect of assessment of income from vacant lands received and enjoyed by the company after the family properties had been pooled for the company's benefit. The Court held that section 56 of the Income-tax Act, 1961 is wide enough to bring to tax income of every kind not excluded from total income and that legal ownership of the underlying asset is not a necessary condition for assessment under that head. The absence of a formal conveyance did not alter the position, since the properties had been transferred for consideration in substance and the company was in possession and receiving the income. Section 60 of the Income-tax Act, 1961 was held inapplicable because the case concerned transfer of the property and receipt of the income by the company, not a mere transfer of income without transfer of the asset. The cited authorities on diversion of income and family arrangements were found distinguishable on the facts.

Conclusion: The income from the vacant lands was correctly assessable in the hands of the company as income from other sources, and the reference was answered in favour of the Revenue.

Ratio Decidendi: For assessment under section 56 of the Income-tax Act, 1961, actual receipt and enjoyment of income by the assessee can suffice even if legal title in the asset remains with others, and section 60 does not apply where the asset itself has effectively been transferred for consideration.

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