TMI Blog1981 (2) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... 1st May, 1966. It was, however, claimed that though the sale deed had been executed on 31st May, 1966, the property had been sold to the company even in May, 1965, and that as per the agreement between the parties, no rent was chargeable from the company in respect of the property from 1st May, 1965, onwards. No agreement of sale was produced in support of this contention. The sale deed dated 31st May, 1966, which was executed in consideration of a sale price of Rs. 11,05,002 did not also make any reference to any earlier agreement between the parties. All that the assessee produced was the copy of resolution passed by the board of directors of the company at their meeting held on 21st May, 1965, to the following effect: " Mr. D. C. Anand with the permission of the meeting took up the subject of transfer of the property presently occupied by Gabriel India Ltd. He stated that the taking over of property at Mulund was discussed at the board meeting held on 28-8-1963. In pursuance of the decision taken at that meeting, he had offered the property owners, viz., M/s. D. C. Anand Sons, to purchase the property and the company paid sum Rs. 10,00,000 as advance on 7th May, 1965, from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was a specific stipulation that rent would not be payable from 1st May, 1965, it had the implication that no income whatever accrued to the assessee, and, therefore, the property had no letting value whatsoever. Finally, it was contended that, even otherwise, rent for the period from 1st May, 1965, to 31st May, 1966, should be treated as having become unrealisable and, therefore, should be deducted in the computation of the property income under s. 24(1)(x). The Tribunal rejected all the contentions urged on behalf of the assessee. It was pointed out, referring to certain decisions of the Supreme Court and the High Courts (including a decision of this court in CIT v. Meatles Ltd. [1972] 84 ITR 37), that there could be no two opinions that the assessee-family continued to be the owner of the property till 31st May, 1966. The argument that this ownership has essentially to be correlated to the income enjoyable from the property was not accepted as a plain reading of ss. 22 and 23 made it clear that the actual enjoyment of the income or rent thereof has little to do with the assessability. It was held that the decision of the Supreme Court in the case of R. B.Jodha Mal Kuthia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh normally a reference on such a clear provision of law was not warranted, the Tribunal accepted the plea of the assessee that reference might be made because there was no Supreme Court decision on that matter. The Tribunal has, therefore, referred to this court the following only question, " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the amount of Rs. 72,000 after such deduction as may be permissible under the law, could be treated as part of the assessee's total income for assessment year 1966-67 ? " Mr. G. C. Sharma, learned counsel appearing for the assessee, frankly admitted that the scope of the question referred to this court is very narrow. The questions, therefore, (a) as to whether the title to the property had passed only on 31st May, 1966, (b) as to whether the provisions of s. 53A of the Transfer of Property Act have any application, and (c) as to whether the municipal value should have been adopted for the purpose of assessment, are all, therefore, outside the purview of this court. All that this court has to consider is whether, on the basis that the assessee continued to be the owner of the property till ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contention of the learned counsel for two reasons. In the first place, there is nothing to show that the income from the property has been diverted from the assessee by any overriding title. As pointed out by the ITO and the AAC all that is shown is that the company had intended to purchase the property, that discussions took place in 1963 and 1965, that an advance of Rs. 10 lakhs had been paid to the family on 7th May, 1965, and that a sale deed was executed for consideration of Rs. 11,05,002 on 31st May, 1966. So far as the nonpayment of rent is concerned, the only facts available on record are that the company had not paid the rent and had resolved not to do so on 21st May, 1965. It is very difficult to spell out from this resolution and the fact that no rent has been specifically shown as received by the assessee that there was any such agreement, as alleged by the learned counsel. The facts are quite consistent with the position that the assessee agreed to sell and sold that property to the company only with effect from the date of the sale deed. There is nothing to indicate that the offer referred to in the resolution of the company was accepted by the family. The resolut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led owner of the property was not the real beneficial owner of the property in the light of the provisions contained in the statute. That situation is totally different from the situation in the present case. We have pointed out earlier that this is only a case where it can at best be said that the owner of the property has disabled himself by a contract voluntarily entered into by him from being able to receive the rent for particular period though entitled in law to do so. Even if such an agreement can be construed as resulting in a diversion of the income by overriding title, the contention cannot be accepted in view of the above decision of the court. Learned counsel for the department invited our attention to the decision of the Bombay High Court in the case of CIT v. Zorastrian Building Society Ltd. [1976] 102 ITR 499, where the owner was held liable to be assessed in respect of the income from the property even though the property had been transferred in such circumstances as attracted the application of s. 53A of the Transfer of Property Act and although the assessee had written to the tenants requesting them to attorn to the transferees with effect from a date anterior t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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