P C LALL CHOUDHARY Vs. COMMROF INCOME-TAX

JUDGEMENT

(1.) This is a reference by the Income-tax Tribunal under Section 66(1), Income- tax Act, and the question which has been referred to us is: Whether, in the facts and circumstances of the case, the net annual value of the house properties under the management of the Receiver has been rightly included in the assessee's assessment?

(2.) The assessee is a Hindu undivided family. The reference relates to the assessment for the charge year 1943-44. The assessee borrowed money from one Kumar Pramatha Nath Roy and others, and in order to secure the loan, executed a mortgage in the English form, transferring the mortgaged property absolutely to the mortgagees, but subject to a proviso for re-transfer to the mortgagor on payment of the mortgage-money as agreed. The mortgagees brought an action upon the mortgage on the original side of the Calcutta High Court, and, during the pendency of the suit the High Court appointed a Receiver of the rents, issues and profits of the immovable properties comprised in the mortgage with power to him to get in and collect the outstanding debts and claims due in respect of the said property and with all the powers provided for in Order 40, Rule 1, Clause (d), Civil P.C. The mortgagor defendants and all persons claiming under them were directed to deliver up quiet possession of the said property to the Receiver, and the Receiver was given liberty to pay one-half of the net collection accumulated in his hands after payment of his commission and other expenses to the plaintiffs and the other half to the defendants. The Receiver accordingly took possession.

(3.) In the relevant year of account the Receiver made certain realizations from sairat, fisheries, hats, etc. We are not concerned with that income. There was, however, house property in the possession of the Receiver, and the annual value was determined at Be. 6279 which sum was brought under assessment by the Income-tax Officer on the footing that the assessee was liable under Section 9 of the Act. The Appellate Assistant Commissioner reduced the quantum of the annual value to Rs. 4879 but maintained the decision that the assessee was liable to pay the tax.