COMMISSIONER OF INCOME TAX Vs. GANGA PROPERTIES LTD

JUDGEMENT

(1.) This is a reference under Section 66(1) of the Indian Income-tax Act, 1922. The assessment year is 1957-58. The corresponding previous year was the financial year ending on the 31st March, 1957. At the relevant time the assessee was a private limited company. In the years preceding the financial year aforesaid the assessee was the owner of premises No. 17B, Gurusaday Road, Calcutta. The assessee claimed for the assessment year 1957-58, that the bona fide annual value of this property was not assessable in the assessee's hands as the property had been sold on the 29th March, 1956, to Messrs. Punjab Produce & Investment Co. Ltd. before the beginning of the accounting year in question. It was stated that under an oral agreement dated March 27, 1956, the assessee agreed to sell the property to the aforesaid purchaser and in accordance with this agreement delivery of possession was given to the purchaser on March 29, 1956. It was stated further that the purchaser paid the whole of the consideration money on the 16th April, 1956, which was credited in the assessee's books in the suspense account. An agreement for sale was drawn up on April 28, 1956. The deed of conveyance transferring the property was executed on the 17th March, 1958, and was registered on 8th July, 1958.

(2.) The Income-tax Officer was of opinion that ownership was not transferred until registration of the deed of conveyance. In the premises, during the accounting year in question the ownership remained vested in the assessee. The Income-tax Officer included the property's bona fide annual value in the assessee's total income.

(3.) The Appellate Assistant Commissioner was also of the same view. He said that the property had not legally passed to the purchaser on the 29th March, 1956, as claimed by the assessee and he sustained the Income-tax Officer's order.