TMI Blog1983 (12) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee company as its income from house property ? " The statement of case relates to the assessment year 1963-64, the accounting period ending on September 30, 1962. M/s. D. L F. Housing and Construction (P.) Ltd. is the assessee-company which has now been amalgamated into M/s. D. L. F. United Ltd. It carried on business of colonisation and one of the colonies developed was the Kailash Colony. While developing the colony, the assessee company reserved a plot of five acres for construction of a school and for other subsidiary purposes, school known as Summer Field School was also put up on this plot of land and the same was placed under the management of a person who was formerly a Principal of Delhi Public School. On May 13, 1953, the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hip of the property has been transferred and that the property has been given on concessional rent on considerations of charity. The assessee went in appeal to the AAC. It was claimed that the establishment of the school bad benefited the business and as such it must be considered as an essential prerequisite of the business, that the lease is a perpetual one, that the assessee is not the owner of the property within the meaning of s. 22, that a building capable of being used as school can certainly have an annual letting value but a building which has been originally set apart for a trust running a school and is already used and occupied by a school, can have no annual letting value and that, relying on CIT v. R. B. Jodha Mal Kuthiala [196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . So far as the main question was concerned, the Tribunal gave reasons for the inclusion of the property income in the hands of the assessee after considering the case of R. B, Jodha Mal Kuthiala v. CIT [1971] 82 ITR 570 (SC). In that case, the assessee was technically a person in whom the ownership of the property vested but he was not in a position to deal with the property in any manner. He could not take possession of it, or lease it, or sell it, or mortgage it or to realise its income. He had only a residual interest which was also of doubtful value and for these reasons a distinction was drawn. The Tribunal recorded the following findings of fact: (1) The very process of letting out is a process of exploitation of the property and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ha Mal Kuthiala V. CIT [1971] 82 ITR 570 (SC). He reiterated the arguments before us which found favour with the AAC. We have referred to the findings of the Tribunal extracted above with the Purpose of showing that, on those findings, the inference is irresistible that the assessee is the owner within the meaning of s. 22 of the Act. The assessee continues to be the owner of the property. In the case of immovable property of the value of Rs. 100 and above, its transfer can be effected only by means of an instrument in writing duly stamped and registered. It is not the case of the assessee that there is any such transfer. The assessee's claim that he can no longer be considered the owner for the purposes of s. 22 as he was bereft of all r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he area now comprising Pakistan continue to be the owner of the property left behind by them in Pakistan within the meaning of s. 9 of the 1922 Act notwithstanding the evacuee legislation in force in Pakistan. The Supreme Court held that, in view of the provisions of Pakistan (Administration of Evacuee Property) Ordinance, 1949, the property vested in the Custodian of Evacuee Property and the assessee had only a residual beneficial interest. That residual beneficial interest was in a sense ownership but could not be considered ownership for the purpose of s. 9 of the 1922 Act. The property, having vested in the Custodian, who had all the powers of the owners, could not be considered to be the legal ownership of the assessee. The Custodian w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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