LAWS(BOM)-2009-2-208

PALLONJI M. MISTRY Vs. COMMISSIONER OF INCOME TAX

Decided On February 11, 2009
Pallonji M. Mistry Appellant
V/S
COMMISSIONER OF INCOME TAX Respondents

JUDGEMENT

(1.) Income Tax Reference No. 3 of 1994 is in respect of the assessment years 1976-77, 1977-78, 1978-79, 1979-80, 1980-81, 1979-80. Income Tax Reference No. 1 of 1994 is in respect of the assessment years 1984-85 and 1985-86. In respect of both the References, the learned tribunal has referred several questions for determination of this Court. In our opinion, if question No. 2 is answered, there will be no need to answer the other questions referred to. The question for consideration before us reads as under:

(2.) A few facts may now be set out. The assessee had 1/3rd share in the property known as Bhaktawar building. The other shares were held by other persons. The property consists of five flats jointly owned by the co-owners and 32 flats occupied by the tenants. Another three flats at the relevant time were in possession of the Court Receiver. Out of 32 flats, 9 flats were sold prior to the accounting year relevant to the assessment year 1976-77. This transfer of 9 flats was accepted by the Income Tax Officer in assessment year 1975-76. Out of remaining 23 flats, 19 were sold on different dates during the accounting year relevant to the assessment year 1978-79 and in respect of the balance, conveyances were executed in the subsequent accounting years. The Assessing Officer held that the assessee was the owner of the 23 flats in dispute as mere execution of conveyance deed was not enough without the deed being registered as required under the provisions of the Registration Act. Since that has not been done, the Assessing Officer held that the assessee continued to be the owner of the 23 flats. On reference to the respective Commissioner under Section 146(3), the order of the Assessing Officer was upheld. In appeal on behalf of the assessee, an emphasis was led on the provisions of the Maharashtra Apartment Ownership Act, 1970 and the Maharashtra Apartment Rules, 1972. Based on this act and rules, it was contended that the transfer made by the assessee was complete and the ownership cannot be attached to the assessee so as to assess the income therefrom in the assessees hands. The learned Commissioner did not agree with the contention as advanced on behalf of the assessee and held that the assessee was rightly treated as owner of the property. Against which, the assessee preferred an appeal before the I.T.A.T. The contentions urged before the Commissioner were also urged before the I.T.A.T. The learned I.T.A.T. confirmed the orders of the Commissioner (Appeals). The tribunal has been pleased to make the reference. After hearing parties with their consent, the question has been reframed to address the issue which arises.

(3.) At the threshold on behalf of the appellant, the learned counsel submits that the concept of ownership considering the provisions of the Transfer of Property Act read with Registration Act is different in the context of the provisions of the Income Tax Act. What is to be considered for the purpose of Income Tax Act are the provisions of Section 22 of the Act of 1963. In support thereof, the learned Counsel has placed reliance on the judgment of the Supreme Court in Commissioner of Income Tax v. Podar Cement Pvt. Ltd. .