Legal ownership of immovable property requires valid conveyance and registration; prior errors do not bind later assessments.

Title to immovable property did not pass merely because a director's affidavit, board resolution, possession or rent receipt treated the asset as belonging to the company; without an executed and registered conveyance, legal ownership remained with the registered owner. An earlier erroneous year-wise view did not bind the appellate authority or create a right to repetition of the same error. As the company was not the owner and the alleged borrowing and related expenditure were not established as incurred wholly for earning the income, deductions for corporation tax, salary, audit fees and interest on loan were disallowed when assessing income under the head "other sources".

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Issues: (i) whether the assessee-company became the owner of the immovable property on the basis of the director's affidavit, the board resolution, possession and receipt of rent, (ii) whether the appellate authority was bound to follow the order passed in the assessee's favour in earlier years, and (iii) whether deductions such as corporation tax, salary, audit fees and interest on loan were allowable while computing income under the head "other sources".

Issue (i): whether the assessee-company became the owner of the immovable property on the basis of the director's affidavit, the board resolution, possession and receipt of rent.

Analysis: Ownership of immovable property could not pass merely because the property was treated in accounts as a company asset or because an affidavit and board resolution expressed an intention to treat it as such. In the absence of an executed and registered conveyance, and in view of the statutory scheme governing transfer of immovable property, the title remained with the person in whose name the property stood. Possession and enjoyment of rent did not by themselves constitute transfer of legal ownership.

Conclusion: The assessee-company was not the owner of the property.

Issue (ii): whether the appellate authority was bound to follow the order passed in the assessee's favour in earlier years.

Analysis: An erroneous order in an earlier year did not confer a vested right on the assessee to demand repetition of the same error. Where the earlier view was inconsistent with the governing legal position on transfer of immovable property, the appellate authority was justified in declining to follow it.

Conclusion: The appellate authority was not bound to follow the earlier erroneous order.

Issue (iii): whether deductions such as corporation tax, salary, audit fees and interest on loan were allowable while computing income under the head "other sources".

Analysis: The claimed deductions depended on the assessee being the owner of the property or on a real borrowing and expenditure incurred wholly for earning the income. Since the assessee was not the owner and the alleged loan and supporting expenditure were not established on the facts, no deduction was allowable.

Conclusion: The claimed deductions were not allowable.

Final Conclusion: The assessment made by treating the property income as income from other sources and disallowing the claimed deductions was upheld.

Ratio Decidendi: Title to immovable property does not pass without a valid conveyance and registration, and a prior erroneous order cannot be treated as creating a binding right to repetition of the same error in later proceedings.

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