TMI Blog1991 (2) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... ication dated March 18, 1972, the approval of the President for the transfer of the ownership and management with effect from April 1, 1972 was conveyed and it was stated that this approval was subject to the vote of Parliament. The consideration was the allotment of 50% of shares to the Government of India by the assessee-company. Accordingly, with effect from April 1, 1972, the assessee-company took over the undertaking and has been carrying on the operations as absolute owner of the assets. In fact, when the postal department wanted a site in the area, the department was asked to negotiate and purchase the same from the assessee-company. The Central Government was allotted 50 per cent. of the shares and the entire terms of the sale were satisfied. However, the sale deed was executed only on March 28, 1977, in respect of the immovable properties comprised in the assets of the undertaking. There is also no dispute that the immovable properties were used for the purpose of the industrial activities of the assessee company. The assessee-company claimed depreciation in respect of these assets under section 32 of the Income-tax Act, 1961 ( "the Act", for short). The Appellate Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emember that in the scheme of the administration of justice, tax laws like any other laws will have to be interpreted reasonably and whenever possible in consonance with equity and justice. Therefore, the fact that the Legislature has deliberately and significantly not used the expression 'assets owned by the assessee' but 'assets belonging to the assessee', in our opinion, is an aspect which has to be borne in mind." The considerations of equity and the factual realities are such that we were almost persuaded to accept the assessee's claim. The Central Government having transferred the entire assets and liabilities and having accepted 50 per cent. of the share capital in the assessee-company, the transaction of sale was almost complete, except for the registration of the sale deed. Even prior to the execution of the sale deed, earlier, when the postal department (a wing of the Central Government) required some site out of the assets held by the assessee, the postal department was asked to deal with the assessee directly, in view of the holding being with the assessee as the owner. For several years, the assessee and the Central Government acted as if the title vested in the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to prevail upon me to take the view that the property belongs to the vendee and not to the assessee. I am conscious that it will work some amount of injustice in such a situation because the assessee would be made liable to bear the tax burden in such situations without having the enjoyment of the property in question. But times perhaps are yet not ripe to transmute equity on this aspect in the interpretation of law-much as I would have personally liked to do that. As Benjamin Cardozo has said, 'The judge, even when he be free, is not wholly free'. The judge cannot innovate at pleasure. It may be said that the Legislature having designedly used the expression 'belonging to' and not the expression 'owned by' had perhaps expected judicial statesmanship in the interpretation of this expression as leading to an interpretation that in a situation like this, it should not be treated as belonging to the assessee but, as said before, times are not yet ripe and in spite of some hesitation, I have persuaded myself to come to the conclusion that for all legal purposes, the property must be treated as belonging to the assessee and perhaps the Legislature would remedy the hardship of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntention. It held that the expression "administration" in relation to an estate, in law, means management and settling of the estate ; it is a power to deal with the estate ; the evacuee cannot take possession of his property nor lease it ; he cannot sell it without the consent of the custodian. It was further held that (at p. 575) : "a property cannot be owned by two persons, each one having independent and exclusive right over it. Hence, for the purpose of section 9, the owner must be that person who can exercise the rights of the owner, not on behalf of the owner but in his own right." After considering a few decisions, the Supreme Court said at p. 578: "As mentioned earlier that section seeks to bring to tax income of the property in the hands of the owner. Hence, the focus of that section is on the receipt of the income. The word 'owner' has different meanings in different contexts. Under certain circumstances a lessee may be considered as the owner of the property leased to him. In Stroud's judicial Dictionary, 3rd edition, various meanings of the word 'owner' are given. It is not necessary for our present purpose to examine what the word 'owner' means in different cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also with the view taken by the Delhi High Court that whoever is the owner of a property in the eye of law is also the owner for purposes of section 22 of the Income-tax Act and that the decision in Kuthiala's case [1971] 82 ITR 570 (SC) constitutes no basis to take contrary view." At p. 477, Rajendra Babu J., held regarding Kuthiala's case [1971] 82 ITR 570 (SC) : "Therefore, the principles that could be applicable to a case where, by operation of law, a person is deprived of the control in regard to property stand entirely on a different footing from a situation where a person voluntarily places himself in a situation where he does not wish to collect the income in regard to a property. Therefore, the principles stated in Kuthiala's case [1971] 82 ITR 570 (SC) cannot be applied to the facts of the present case." Thus, a Bench of this court has clearly confined the applicability of the decision in Kuthiala's case [1971] 82 ITR 570 (SC) to the particular facts involved therein and held it inapplicable to other cases under section 22. The consequences of Kuthiala's case [1971] 82 ITR 570 (SC) were statutory and not contractual. The facts of the present case before us have ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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