TMI Blog1992 (1) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... omputed the total income of the assessee at Rs. 31,710. While doing so he had included a sum of Rs. 12,000 towards the annual letting value (ALV) over her property at 17/6 Mathura Road, Faridabad as against the nil income disclosed by the assessee. The ITO held that though the assessee might have sold away the property under the agreement dt. 6th Jan., 1980 to M/s Jagit Engineering Works(P) Ltd. who used to occupy the same business premises as tenants, under the assessee and though they took over the possession from the assessee even on 6th July, 1980 inasmuch as no regular registered sale deed was as yet executed by the assessee and inasmuch as the assessee continued to remain the legal owner of the said property, following the decision of the Calcutta High Court in CIT vs. Ganga Properties Ltd. (1970) 77 ITR 637 (Cal) the assessee is obliged to disclose the ALV over the said property and also should pay tax on the notional income derived over the said property. The ITO determined the notional income over the said property at Rs. 12,000 as in the previous year and included it as part of her income for asst. yr. 1982-83. Further, the ITO did not take into consideration the sum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee should not be penalised. The Tribunal also held that since no action was taken by the ITO on the original return filed by the assessee for the asst. yr. 1980-81, reopening under s. 148 is not permissible or valid. However, the Tribunal had the following to say with regard to the loss claim of Rs. 18,359. "Coming now to the question of carry forward of loss, it is pertinent to note that unless the loss is determined it cannot be carried forward. The present appeal concerns with the assessment made under s. 148. Therefore, this issue is not arising out of the impugned order. In view of this we decline to comment over the same." Thus, the appeal filed against the ex parte assessment order passed under s. 144/148 for asst. yr. 1980-81 was allowed by the Tribunal, the loss claim was neither determined nor allowed to be carried forward. So much is about the carry forward loss. 2. Now with regard to notional income added in the assessee s total income for asst. yr. 1982-83 on the quantum side the assessee had taken a plea that the assessee was the owner of a factory building situated at 17/6 Mathura Road, Faridabad. For asst. yr. 1982-83, the assessee declared nil income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emains as a legal owner of a house property, liability to pay tax on the house property income always remains with her and for that proposition, the learned Departmental Representative relies upon the Supreme Court s decision in Alapati Venkataramiah vs. CIT (1965) 57 ITR 185 (SC) and the Clacutta High Court decision in CIT vs. Ganga Properties Ltd. (1970) 77 ITR 637 (Cal). 3. Having heard both sides I am of the view that as per the Supreme Court s decision in (1965) 57 ITR 185 (SC) cited supra, it is not proper to apply the ratio to the case to the facts on hand. That was a case dealing with capital gains and the question in that case was when the transfer takes place. Now in this case on the question whether there was any deliberate omission on the part of the assessee in not filing the return within the prescribed time. Though the case of Ganga Properties Ltd., decided by the Calcutta High Court was on the question of assessing the property income in the hands of the legal owner, according to me it is not proper to apply the ratio of the case to the facts on hand. Now we are not on the question whether it is legally bound to pay the tax on the property income when once the leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al was in error in holding that the assessee should be assessed on the income from the house properties." Just like in that case, the facts of this case also, it cannot be said that M/s Jagjit Engineering Works (P) Ltd., cannot be called as tenants under the assessee any more. Having delivered possession and having received the full consideration of sale from them, the assessee would not be in a position to let out the premises to any others or realise any rents from out of the said property. Therefore, it can be said that the property was neither occupied by the owner nor by any tenant and therefore the ALV cannot be assessed in the hands of the assessee. Thus, applying the Madras High Court s decision, it cannot be said that the assessee s belief that because she is neither the owner nor can induct any person as tenant and because she is not in a position to realise any rent from out of the property, she need not show the ALV over the property in her IT return cannot be said to be non-bona fide or without reasonable cause. 4. We had already observed that as regards the claim of loss for asst. yr. 1980-81 is concerned, though the assessee had filed her IT return for asst. yr. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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