TaxTMI 
TaxTMI 
1993 (10) TMI 123
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....oceedings, however, he had contended before the Assessing Officer that since he was the owner of the property, only for a period of 10 months during the year, there was no annual value to be determined and hence no income was to be assessed under the head "Income from house property". The CIT (Appeals) states thereafter that the Assessing Officer does not appear to have examined this contention of the assessee. 2.1 The assessee relied on the decision of the Special Bench of ITAT, Madras Bench "B" in the case of M. Raghunandan v. ITO [1985] 11 ITD 298 in support of his claim that the income from the house property was not taxable in his hands in this year, inasmuch as, he was not the owner of the house property, nor did he derive rental income therefrom for the full year corresponding to this assessment year. The CIT (Appeals) discussed the decision of the abovementioned Special Bench case of the ITAT to the effect that where a property does not give rise to an annual income or gives income for a lesser period, notional or otherwise, the income from that property cannot be included in the total income. The CIT (Appeals) also took into consideration the observation of the Special ....
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....1] 9 ITR 695 (PC); 3.2 The learned departmental representative finally attracted our notice to the provisions of sections 5 and 56 of the Income-tax Act, 1961 and argued that in accordance with the said provisions all income accruing to an assessee have necessarily got to be assessed to tax and if it is not possible to assess the said income under any specific head, it will have to be assessed as "Income from other sources". The departmental representative thus came up with the alternative contention that the rental income from the property under consideration should at least be assessed to tax as "Income from other sources". 4. The learned counsel for the assessee, on the other hand, strongly argued that all the cases as relied upon by the departmental representative related to the provisions of 1922 Act and that the definition of "annual value" as per the 1961 Act is different from that as in the 1922 Act. It has been stated by him that in the 1922 Act, there was no concept of "annual value" at all. He thereafter quoted extensively from the order of the ITAT, Special Bench, Madras, in M. Raghunandan's case to argue that since in the instant case, the assessee was not the ow....
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....erty cannot be subjected to tax as "Income from house property" by recourse to the provisions of section 22 of the Income-tax Act, 1961. 5.2 At the same time, again, we feel that no income which actually accrues to an assessee during an year and which is not specifically exempt from taxation by some particular provisions of the Act, should go untaxed. In this connection, we want to make a difference between the concept of "receipt" and "income". It is of common knowledge that all the receipts are not income and hence even such receipts which are not of the nature of income and for which there is no specific provision for exemption under the Income-tax Act, would not be taxable. The same, however, cannot be said about the "income" actually accruing to an assessee. The basic idea behind the Income-tax Law is that whatever is income must be subjected to tax unless it is exempted by a specific provision. We find ample support for this view from the; wording of the charging sections 4 and 5 of the Income-tax Act, 1961. The first paragraph of sub-section (1) of section 4 reads as below: "Where any Central Act enacts that income-tax shall be charged for any assessment year at any ra....
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....me from house property is a special type of income, for which certain conditions like ownership of the property and assessing of "annual value" are necessary. There are ample decisions to show that rental income actually derived from house properties can be assessed to tax as business income or as income from other sources. In the instant case also, therefore, since the rental income accruing to the assessee is found to be not chargeable to tax as income from house property and it cannot also be said that the intention of the assessee was to exploit the house property constructed by him commercially, the rental income has necessarily got to be assessed as income from other sources in accordance with the provisions of section 56. Enumeration of different types of income in sub-section (2) of section 56 is merely illustrative and not exhaustive as is evident from the wording of the said sub-section (2). We are, therefore, finally of the view that the rental income derived by the assessee from the house property constructed by him is to be assessed to tax as income from other sources for this year, inasmuch as, it is not possible to arrive at its "annual value" for this year. 5.3 H....