House property income treatment upheld for requisition compensation treated as recurring rent-like receipt, not capital gains.

Compensation received for requisitioned immovable property was taxable as income from house property because the assessee continued to remain the owner in substance, retaining the material incidents of ownership despite transfer of possession and enjoyment to the Government. The recurring payment under section 8(2) of the Requisitioning and Acquisition of Immovable Property Act, 1952 was treated as equivalent to rent for use and occupation, not as consideration for a capital transfer. The receipt therefore did not fall under capital gains or income from other sources, and was assessable under the head of house property.

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Issues: Whether compensation received for requisitioned immovable property was assessable as income from house property and not as income from other sources or as capital gains.

Analysis: The property remained owned by the assessee despite requisition, and only the rights of possession and enjoyment stood transferred to the Government. Compensation payable under section 8(2) of the Requisitioning and Acquisition of Immovable Property Act, 1952 was in the nature of recurring payment equivalent to rent for use and occupation. Ownership for the purposes of section 22 of the Income-tax Act, 1961 is to be understood broadly as a bundle of rights, and the assessee continued to retain material incidents of ownership, including alienation. The requisition did not amount to such a transfer as would convert the receipt into capital gains or take it outside the head of house property.

Conclusion: The compensation was rightly assessable as income from house property and not as income from other sources or capital gains.

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