Practical ownership under section 22 determines house property income where possession and enjoyment pass despite unfinished conveyance.

For section 22 of the Income-tax Act, 1961, "owner" means the person who enjoys the practical and effective incidents of ownership, including possession, use and the right to derive benefit from the property, rather than merely the holder of formal legal title. Where an agreement has transferred physical possession and full enjoyment of the house properties, with only the formal conveyance remaining to be executed and registered, the rental income is assessable in the hands of that person as income from house property. The doctrine of part performance under section 53A of the Transfer of Property Act, 1882, and a contractual bar on disturbing possession support that conclusion.

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Issues: Whether rental income from the house properties, though legal title had not been conveyed by a registered deed, was assessable in the hands of the assessee under the head income from house property as the assessee was the owner within the meaning of section 22 of the Income-tax Act, 1961.

Analysis: The agreement transferred physical possession, full enjoyment, and the power to derive income and benefits from the properties to the assessee, while reserving only the formal execution and registration of conveyance deeds. The Court held that, for section 22, ownership must be understood in a practical and juristic sense as the person who can exercise the rights of an owner and enjoy the property for his own benefit, rather than as the person retaining only the bare legal title. The doctrine of part performance under section 53A of the Transfer of Property Act, 1882, and the contractual arrangement preventing the vendor from disturbing possession supported the conclusion that the assessee had the real incidents of ownership, even though the formal conveyance had not been completed. The alternative contention under section 56 of the Income-tax Act, 1961 was not examined because the principal issue was decided against the assessee.

Conclusion: The assessee was liable to be treated as the owner for the purposes of section 22, and the house property income was correctly assessable in its hands. The answer to the referred question was against the assessee and in favour of the Revenue.

Ratio Decidendi: For the purposes of section 22 of the Income-tax Act, 1961, "owner" means the person who the practical and effective rights of ownership, including possession and enjoyment of the property and the right to exclude others, and not merely the holder of the formal legal title.

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