TMI Blog1979 (1) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... cerned in this reference with the assessment of the assessee in respect of the assessment years 1960-61 and 1961-62. The State of Bombay had originally granted a lease in favour of a company by name Karimjee Properties Limited of an open plot for construction of a building. This lease was assigned on November 6, 1950, by the said company in favour of one Khetan. Khetan formed a company by name Khetan Estate Ltd. with an issued capital of Rs. 17.50 lakhs on November 24, 1950. This company started construction of a building on the land and the building was completed in September, 1952. In October, 1952, the company allotted flats to its shareholders in proportion to the shares held by the shareholders. The assessee was one such shareholder to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be assessed under 'Other sources' is not tenable. Once it is conceded that it represents income and is an exempted item (sic) it has to be assessed to income-tax and if it is not assessable under any of the specific heads provided in the Act, it will be assessable under the residuary head 'Other sources'. In this case there cannot be any doubt that the benefit the assessee received by the free use of the flat is income. It is not necessary that income should always be in cash. Benefits which are in kind do constitute income. " We may at this stage point out that there are two glaring infirmities in the observations made by the Commissioner. Firstly, it is difficult to appreciate his observation that it was conceded that the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l has taken the view that s. 12, unlike s. 9, did not permit inclusion of notional income. An argument was raised before the Tribunal on behalf of the revenue that if the assessee were to lease out the flat on rent, he would have earned income therefrom and by occupying the flat himself, the assessee has denied the income to himself. This argument was rejected and, in our opinion, rightly by the Tribunal when the Tribunal observed that the ITO cannot tax the assessee on the basis that if he had permitted other persons to use the flat, he would have earned income. An argument was also advanced before the Tribunal that income from the property of the assessee should be taxed as dividend because the definition of dividend in s. 2(xxii) was an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation for the use of the flat when he became the shareholder of the company and invested his moneys in the company. It is obvious, therefore, that the Commissioner had proceeded to exercise his jurisdiction on an entirely erroneous assumption that the assessee was getting a free use of the flat. Since this was the only ground on which the income which was shown under the head "Property" was sought to be brought in under the head " From other sources ", it is obvious that the Tribunal was more than justified when it decided to set aside the orders of the Commissioner. In our view, on the facts of this case, no further discussion is necessary and we are satisfied that the Tribunal acted rightly in setting aside the orders of the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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