1989 (4) TMI 66

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....as delivered by GOKAL CHAND MITAL J. -Against the assessee-company, proceedings for liquidation were started. During the pendency of the proceedings, to discharge debts owed to its directors, the company passed a resolution on January 27, 1978, to give the building of the company to the directors. The resolution was approved by the shareholders on January 28, 1978. On January 31, 1978, the comp....

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....ally, the company was not receiving the rent and it was the directors who were receiving the rent. The Income-tax Officer decided the matter against the company and so did the Appellate Assistant Commissioner. When the matter came to the Tribunal, it took notice of the decision reported as Smt. Kala Rani v. CIT [1981] 130 ITR 321, of this court in which a converse proposition was being propound....

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....earlier, the facts of that case were converse. There, an assessee had agreed to purchase the building on March 17, 1964, and got possession but the sale deed was executed only on April 11, 1969. In the returns filed for the assessment years 1968-69 and 1969-70, the assessee did not include the income from the property agreed to be purchased on the ground that he had become an owner thereof, vide s....

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....the assessment years 1968-69 and 1969-70." There, the Department wanted to tax the income received by a person who was in occupation of the property but did not possess title and here the Department wants to tax a person who has given up possession on the basis of the agreement after squaring up the debt payable against the value of the building. This cannot be permitted. Following the afore....