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TMI Blog2005 (2) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... e and used for the business carried on by him in partnership was not liable to be included in his total income under section 22 of the Income-tax Act, 1961?" The reference relates to the assessment year 1981-82. Briefly stated the facts giving rise to the present reference are as under: The assessee-respondent is the owner of a house property bearing municipal No. 174/2 situate on plot Nos. 824/2, 823/1 and 825. The assessee is also a partner in a firm known as M/s. Sikandar Shahi Zarda Factory. A major portion of the aforesaid house property has been in occupation of M/s. Sikandar Shahi Zarda Factory for the business purposes and a small part was let out for residence. The Income-tax Officer found that no income from house property was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by him for the purpose of his own business or profession. Under section 22 of the Act it is only the owner of the property who can claim exemption and that owner must be an assessee and the property concerned must be used or occupied for the assessee's (owner) business. Placing strong reliance upon the judgment of the Karnataka High Court in the case of CIT v. K.N. Guruswamy [1984] 146 ITR 34, it was submitted that the words "occupation of the property" in the context of section 22, must mean "occupation" as "owner". Further reliance was placed by him on the following two cases: (1) CIT v. Podar Cement Pvt. Ltd. [1997] 226 ITR 625 (SC); and (2) CIT v. Bhoopalam Commercial Complex and Industries (P.) Ltd. [2003] 262 ITR 517 (Karn). Lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced by counsel for the Revenue. Section 22 of the Act reads as follows: "The annual value of property consisting of any buildings or lands appurtenant thereto of which the assessee is the owner, other than such portions of such property as he may occupy for the purposes of any business or profession carried on by him the profits of which are chargeable to income-tax, shall be chargeable to income-tax under the head 'Income from house property." A plain meaning of section 22 of the Act undoubtedly supports the contention of learned standing counsel for the Department. The Karnataka High Court in the case of CIT v. K.N. Guruswamy [1984] 146 ITR 34 has held that property owned by an assessee and occupied by him for the purpose of his own bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ership is merely an association of individuals and the firm name is only a collective name of those individuals who constitute the firm. The Gujarat High Court has relied upon the following passage from the judgment of the Supreme Court in the case of CIT v. R.M. Chidambaram Pillai [1977] 106 ITR 292: "Nevertheless, the general concept of a partnership, firmly established in both systems of law, still is that a firm is not an entity or 'person' in law but is merely an association of individuals and a firm name is only a collective name of those individuals who constitute the firm. In other words, a firm name is merely an expression, only a compendious mode of designating the persons who have agreed to carry on business in partnership." Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons. We respectfully follow the interpretation put by the Gujarat and other High Courts and respectfully dissent from the view taken by the Karnataka High Court on the aforesaid phrase. We prefer to follow the view taken by the majority of the High Courts on interpretation of the word "occupation" in section 22 of the Act. The cases relied upon by learned standing counsel, namely, CIT v. Podar Cement Pvt. Ltd. [1997] 226 ITR 625 (SC) and CIT v. Bhoopalam Commercial Complex and Industries (P.) Ltd. [2003] 262 ITR 517 (Karn) have no bearing on the issue involved in the present case. The ratio of these cases is not material and helpful for the decision of the controversy involved in the present case. The upshot of the above discussion is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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