TMI Blog1992 (2) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... led appeal before the CIT(Appeals) and in the statement of facts submitted before him along with the memo of appeal it was submitted that in view of provisions of section 27(iii) of the IT Act, 1961 the assessee should be regarded as lawful owner of the flat in question and that the rental income was assessable as income from house property and not as income from other sources. The CIT(Appeals) observed that the point in controversy had been decided against the assessee by the Appellate Tribunal in the appeal for assessment year 1981-82. He accordingly held that the said income was assessable as income from other sources and not income from house property. 3. An additional ground had been raised before the CIT(Appeals) by the assessee which was to the effect that the rental income was not at all assessable under any of the heads and was not liable to tax. This plea was based on the decision of the Bombay High Court in the case of CIT v. Smt. T.P. Sidhwa [1982] 133 ITR 840 and the decision of the Andhra Pradesh High Court in the case of CIT v. Trustees of H.E.H. the Nizam's Miscellaneous Trust [1986] 160 ITR 253. It was submitted on behalf of the assessee that the additional grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not have held that income was assessable as income from other sources. An additional ground was sought to be raised before the Tribunal for assessment year 1981-82 which was to the effect that in view of the decision of the Bombay High Court and the decision of the Andhra Pradesh High Court (referred to above) the rental income should be held as non-taxable under any of the provisions of IT Act, 1961. The Tribunal held that the said additional ground did not arise out of the order of the A.A.C. and as such the assessee was not entitled to raise that ground. The Tribunal recorded a finding that the said rental income was assessable as income from other sources and not as income from house property. As far as assessment year 1983-84 is concerned, the additional ground has been raised before the first appellate authority. The jurisdiction of the first appellate authority is co-extensive with that of the Assessing Officer while the jurisdiction of the Appellate Tribunal in second appeal is confined to the matter arising out of the order of the first appellate authority. We are of the opinion that the CIT(Appeals) ought to have held that the additional ground was entertainable by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essional work done by him while he was a practising Advocate and the question arose as to whether he was liable to pay income-tax on those receipts. The Commissioner of Income-tax had held that the receipts were chargeable to tax under the head " Income from other sources ". After enumerating the six sources or heads of income which are chargeable to tax as specified in section 6 of the IT Act, 1922, (corresponding to section 14 of the IT Act, 1961) their Lordships observed that " several heads of income mentioned in section 6 are mutually exclusive and that a particular income can come only under one of them ". Adverting to the facts of the case, their Lordships added that the receipts in said case were outstanding dues of professional work done and were clearly the fruits of the assessee's professional activity and were the profits and gains of a profession and as such would fall under the fourth head viz., Profits and gains of business, profession or vocation but they were not chargeable to tax under the computing section because of the fact that in the relevant accounting year, the provisions had not been relied on by the assessee. Consequently according to their Lordships, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances said income would have arisen. If a person takes on lease a property belonging to the legal owner and subsequently sublets the same, there was no reason why the said person should not be taxed in respect of the income which he actually derived by subletting the property. The principle laid down in the case of Nalinikant Ambala Mody would not be applicable in such cases. As far as sections 22 to 27 were concemed, the charge is on the owner of the house property. If the person is not the owner of the house property he would not be assessable under said provisions. The charge under sections 22 to 27 is on the owner in respect of income which he actually or notionally derives from the property and the fact that lessee who derived income by subletting the property was being taxed in respect of the amount received by him by subletting, could not be a ground for assessing the owner in respect of the income of property or vice versa. The same principle would apply when the assessee, as in the present case, derives income by way of rent after obtaining possession of the property in pursuance of agreement from the real owner. The income which the assessee was deriving by way of ren ..... X X X X Extracts X X X X X X X X Extracts X X X X
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