9911796707
TMI Blog1991 (7) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... mercial Ltd., and that the petitioners are not the owners thereof but are merely licensees. Because income therefrom has been taxed in the hands of the petitioners by virtue of the assessment orders which have been passed by the assessing authority at Delhi, the petitioners have challenged the said assessment orders and have also challenged the vires of section 27(iii) of the Act. As regards the assessment orders, the petitioners have already filed appeals against the same. In view of the fact that the petitioners have availed of the alternative remedy open to them under the Act, we do not propose to exercise our jurisdiction under article 226 of the Constitution. The petitioners have adequate alternative remedy and questions of fact and l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition to the same being applicable to co-operative societies, the said sub-section was also made applicable to companies and other associations of persons. The provision, as it now stands, provides that, if a member of a co-operative society, company or other association of persons to whom a building belongs is allotted a building or a part thereof under the scheme of the society, company or association, then that person is deemed to be the owner of that building or part thereof There is an inherent fallacy in the argument of learned counsel for the petitioners that such a member or shareholder is deemed to be the owner of the building in the genuine legal sense. As is evident from the provision of section 27(iii) itself, such a member, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 56 but will have to be computed under sections 22 to 26. This being so, it is wrong to contend that section 27(iii) vests the property of the company in the members or shareholders. In any case, we do not find any case being made out for our coming to the conclusion that section 27(iii) is ultra vires. The Income-tax Act is replete with deeming provisions, for example, if a closely held company does not declare dividend, then, under certain circumstances, dividend is deemed to have been declared. Another example is where the income of spouse and minor children are clubbed together. These are deeming provisions which are enacted by Parliament in exercise of its legislative competence under List I of the Seventh Schedule to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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