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of <h1>Court rules assessee not building owner, favorable tax assessment outcome. Applicant to bear reference costs.</h1> The High Court of Bombay ruled in favor of the assessee, determining that they were not the owners of the building in question. Consequently, the court ... Advance Tax, Appeal To AAC, Balancing Charge, Business Income, Competency To Appeal Issues:Ownership of the building in questionAssessment of income-tax under section 22 of the Income-tax Act, 1961Ownership of the Building:The case involved a dispute regarding the ownership of a plot of land and a building constructed on it. The original owners leased the property to Mulchand Hukmatrai for 99 years, who then constructed a building on the land. After defaults in lease payments, a consent decree was passed, transferring the rights of the building back to the original owners, who then leased it to the assessee-company. The Revenue argued that the assessee-company should be considered the owner of the building based on agreements with Mulchand and the company's objectives. However, the court held that the legal relationship between the original owners and the assessee-company was that of lessors and lessees, as established by the lease agreement dated December 12, 1961. The court rejected the Revenue's argument and concluded that the assessee-company was not the owner of the building.Assessment of Income-tax:The Revenue contended that if the assessee was the owner of the building, they would be liable to pay income tax under section 22 of the Income-tax Act, 1961. However, since the court ruled that the assessee was not the owner, the question of income tax liability did not arise. Therefore, the court answered the questions related to income tax assessment in the negative, in favor of the assessee.In conclusion, the High Court of Bombay ruled in favor of the assessee, stating that they were not the owners of the building in question. As a result, the questions regarding income tax assessment were also answered in favor of the assessee. The court directed the applicant to pay the costs of the reference to the respondents.
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