TMI Blog1993 (7) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... ng income at Rs. 19,737. The Income-tax Officer completed the assessment on March 23, 1976, at Rs. 37,750. The assessee had shown a capital gain of Rs. 32,390 arising from the sale of house property and claimed the same to be a long-term capital gain. The dispute arose as to the nature of the capital gain between the assessee and the Department. The Department taking a cue from the agreement entered into by the assessee with Messrs. Ansal and Seigal Properties (P.) Ltd., New Delhi, the builder, took the view that, in fact, the assessee became the owner of the property on February 13, 1973, when the last instalment was paid and so construing the capital gain could not be termed a long-term capital gain. On the other hand, the assessee claime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that the assessee was put in possession way back on May 29, 1970, and was enjoying the property held him to be the beneficial owner of the property, treated the capital gain as a long-term capital gain. Learned counsel for the applicant has challenged this conclusion of the Tribunal terming it to be against the provisions of the Income-tax Act and otherwise contrary to the judicial pronouncements of the various High Courts. The precise submission of learned counsel for the applicant is that the assessee became the owner of the property on February 10, 1973, when the last instalment of Rs. 5,000 was paid by him to the builder. Before this date, he was in possession of the property on the basis of the agreement dated May 29, 1970. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or other foreign exchange (as defined respectively in clause (c) and clause (d) of the said section) to India from country outside India in accordance with the provisions of the said Act and any rules made thereunder, during the period commencing on the 26th day of October, 1965, and ending on the 28th day of February, 1966, or such later date as the Central Government may, by notification in the Official Gazette, specify in this behalf, notwithstanding that such capital asset has been held by the assessee for not more than twenty-four months immediately preceding the date of its transfer." From a perusal of the above section of the Income-tax Act, it becomes clear that a capital asset/capital gain would be deemed to be a short-term capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch an income would be deemed to be an income from "other sources". Though the court noticed various decisions of the other High Courts taking contrary view, notably Kala Rani v. CIT [1981] 130 ITR 321 (P H), CIT v. Steelcrete (P.) Ltd. [1983] 142 ITR 45 (Cal), and a few others, yet it chose to follow the view of its own High Court. This authority does not apply to the facts of the present case. In the instant case, we have to examine the provisions of section 2(42A) of the Act. Sections 22 and 23 of the Act referred to income from the house property owned by the assessee. In R. B. Jodha Mal's case [1971] 82 ITR 570 (SC), the court examined the provisions of section 9 of the Indian Income-tax Act, 1922, which envisages ownership of prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determination before the income-tax authorities. The Income-tax Officer assessed the gain as a short-term gain holding that sale of plot was within 12 months from its purchase. On appeal by the assessee, the Appellate Assistant Commissioner took the view that the capital gain made by the assessee was a long-term gain and his decision too was affirmed by the Tribunal. The question of law as to whether on the facts of the case the gain from the sale of plot can be treated as a long-term capital gain was referred to the High Court by the Tribunal. The court without dilating upon the terminology used in section 2(14) and section 2(42A) of the Act held that mere agreement to purchase did not convey any title to the land or create any interest in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt performance of an agreement, etc. Conversely, all such other persons who may be termed is lessees, mortgagees with possession or persons in possession as part performance of the contract would not in strict parlance come within the purview of "owner". As per the Shorter Oxford Dictionary, edition 1985, "owner" means one who owns or holds something; one who has the right to claim title to a thing. The apex court in the case Jagdish Chand Radhey Shyam v. State of Punjab, AIR 1972 SC 2587 ; [1972] PLJ 566, while examining the provisions of the Capital of Punjab (Development and Regulation) Act (27 of 1952) held that the event of some default with regard to payment of instalments which might have been committed by an allottee does not give ..... X X X X Extracts X X X X X X X X Extracts X X X X
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