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Issues: Whether, for the relevant assessment years, income from the immovable property was assessable in the hands of the assessee as owner under section 9 of the Indian Income-tax Act, 1922, and section 22 of the Income-tax Act, 1961, notwithstanding prior agreement to sell, receipt of full consideration, delivery of possession, attornment of tenants, and the bar under section 53A of the Transfer of Property Act.
Analysis: The decisive test under the property-income provisions is legal ownership of the immovable property itself, not merely receipt of rent or the ability to enjoy the income. A contract for sale, even when accompanied by payment of price and delivery of possession, does not transfer title in immovable property worth more than Rs. 100 unless completed by a registered conveyance. Section 53A of the Transfer of Property Act only protects possession; it does not confer title or make the transferee the owner for purposes of assessment. The earlier view treating the expression as referring to ownership of annual value was no longer good law, and the later authorities supported assessment on the legal owner until conveyance.
Conclusion: The assessee remained the owner for the purposes of section 9 of the Indian Income-tax Act, 1922, and section 22 of the Income-tax Act, 1961, and the income from the property was assessable in its hands; the question was answered in favour of the Revenue.
Final Conclusion: Liability to tax on house-property income followed legal title, and the absence of a registered sale deed prevented the transferees from being treated as owners for assessment purposes.
Ratio Decidendi: For income from house property, the liable person is the legal owner of the immovable property; possession, receipt of rent, or protection under section 53A of the Transfer of Property Act does not substitute for title or shift assessment.
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