Deemed ownership under lease transactions depends on the twelve-year statutory threshold and recorded factual findings.

Deemed ownership under Section 27(iiib) of the Income-tax Act applies only when rights in a building are acquired through a transaction satisfying Section 269UA(f). In the context of a lease, the transfer condition is met only if the lease term, including extended terms where applicable, is not less than twelve years. The text emphasises that factual findings on these statutory prerequisites are essential before deemed ownership can be applied, and that absence of such findings requires reconsideration on facts.

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Issues: Whether rights acquired under a lease arrangement amounted to a transfer of immovable property so as to attract deemed ownership under Section 27(iiib) of the Income-tax Act, 1961, and whether the requisite factual findings under Section 269UA(f) were recorded.

Analysis: Section 27(iiib) deems a person to be the owner only where rights in a building are acquired by virtue of a transaction falling within Section 269UA(f). In the case of a lease of immovable property, the transfer condition is satisfied only if the lease is for a term of not less than twelve years, including extended terms where the aggregate period is twelve years or more. The material on record did not show any definite finding by the Tribunal or the High Court on the essential prerequisites under Section 269UA(f)(i) and its explanation. The matter therefore required reconsideration on facts.

Conclusion: The legal test for deemed ownership depends on satisfaction of the twelve-year lease requirement under Section 269UA(f), and in the absence of factual findings on that requirement, the matter had to be remitted to the Tribunal.

Final Conclusion: The impugned orders were set aside and the matter was sent back for fresh adjudication in accordance with law.

Ratio Decidendi: Deemed ownership under Section 27(iiib) arises only when the underlying lease transaction satisfies the statutory transfer conditions under Section 269UA(f), including the twelve-year requirement computed with extended terms where applicable.

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