Suhas Chandra Sen, J. - (1.) THE Tribunal has forwarded the following question of law to this Court under s. 256(1) of the IT Act, 1961 : "Whether, on the facts and in the circumstances of the case and having regard to the fact that the assessee entered into an agreement for the purchase of a flat and paid the full consideration and took possession of the said flat, the Tribunal was justified in upholding the order of the AAC that the notional income from the said flat cannot be assessed in the hands of the assessee who was not the legal owner of the flat inasmuch as the deed of conveyance for transfer of the flat was neither executed nor registered ?"
(2.) THE assessment year involved is 1979-80 for which the relevant accounting period ended on 31st March, 1979. The ITO in his order recorded the following facts : The assessee had purchased a flat. He had paid full consideration and took possession of the flat. The assessee was getting all the benefits from the flat. But there was no registered deed of conveyance. The ITO also noted that the assessee was raising the question of legal ownership for the last few years to avoid taxation under the head "Income from house property." The ITO observed "The peculiar position of the assessee in relation to the flat may be accepted for a limited period but not for year after year. Hence the explanation submitted by the assessee is not accepted and the notional income is computed and added to the total income of the assessee." The AAC on appeal held that since the legal ownership of the flat had not been acquired by the assessee by a registered deed of conveyance, he could not be treated as owner and the notional income could not be added to his income on account of ownership of the flat. On further appeal, the Tribunal held that although there were judgements of other Courts to the contrary, in view of the decision of the Calcutta High Court in the case of CIT vs. Ganga Properties Ltd. (1970) 77 ITR 637 (Cal), it must be held that the assessee could not be treated as owner of the flat till a registered deed of conveyance was executed.
(3.) NOTHING has been argued or shown on behalf of Revenue to induce us to take a contrary view. It was held by this Court in the case of Ganga Properties Ltd. (supra) that in Indian law, beneficial ownership was unknown. There was but one owner of a property namely, the legal owner, both in respect of vendor and purchaser, and trustee and cestui que trust. In view of this judgment, the question raised has to be answered in the affirmative and in favour of the assessee. There will be no order as to costs.;