1. The question whether the assessees should be assessed under the head 'Income from house property' or under the head 'Income from other sources' may look simple but the answer is not easy to find especially in view of the provisions of the Income-tax Act, 1961 ('the Act'), coupled with myriad of decisions. The difficulty is further aggravated by the inelegantly drafted documents bearing on the question. To understand the implications of the question and to find out an answer thereto, it is necessary to state the facts in detail.
2. Shri Dewan Chand and Shri Badri Nath were joint lessees of a plot of land, measuring about 4,628 sq. yds., plot No. 24, Barakhamba Road, New Delhi, under a registered perpetual lease deed dated 17-9-1937.
Thereafter, the property came into the hands of Shri Prem Nath by a registered conveyance deed dated 16-5-1938. Shri Prem Nath constructed a dwelling house on the said plot and this property was treated as the property of the family of Shri Prem Nath of which he was the karta. He had three sons, Sarva Shri Rajeshwar Nath, Vishwa Nath and Jatinder Nath. His wife was Smt. Indra Devi. A family arrangement was entered into among the members of the family and the same was registered by a document dated 2-8-1941. 50 per cent of the property was allotted to Smt. Indra Devi and the remaining moiety was allotted to Shri Prem Nath himself according to, the family arrangement. Shri Prem Nath died intestate on 15-6-1949 leaving behind him his three sons and his widow Smt. Indra Devi. Subsequently, Smt. Indra Devi disclaimed all her rights and interest in the said property and she conveyed her undivided half share by a registered gift deed dated 11-9-1957 in favour of her three sons in equal shares. The result was that the three sons of Shri Prem Nath became joint owners of the entire property. They treated this property as the property belonging to the respective families. On 1-3-1972 there was an oral partial partition of the said property by the three families of three sons of Shri Prem Nath respectively. The property was divided in 12 equal parts and they were allotted to 12 persons of the families (we are not concerned with the names). Shri Rajeshwar Nath filed a declaratory civil suit-cum-partition suit in the Hon'ble Delhi High Court at New Delhi and by a decree of the Hon'ble High Court dated 17-5-1971, it was declared that each of the 12 parties was the owner of the undivided interest in the said property and that Smt. Indra Devi had no right therein. The decree was subsequently registered on 13-6-1971. Even before the division of the said property among the 12 persons aforesaid, the kartas of the three families approached Dewan Chand Builders (P.) Ltd. (hereinafter referred to as 'builders') of 33-B, Pusa Road, New Delhi, for the construction of a multi-storeyed building and on 22-6-1970, a tentative arrangement had been duly arrived at between the parties for the said purpose. Some of the parties had transferred their interest to other family members and in this manner ultimately the property vested in all the 17 co-owners.
These 17 co-owners entered into a formal written agreement on 1-3-1972 with the builders for the construction of the said multi-storeyed building which was already taken up. The consideration for this transaction was that 30 per cent of the built up area should be left to the 17 co-owners pro rata and that the balance of 70 per cent should be left for the benefit of the builders. There was a further arrangement by which the 17 co-owners transferred their entire rights, title and interest in the property (land) to a private limited company, named, Ashoka Estate (P.) Ltd., by registered conveyance deeds. Ashoka Estate (P.) Ltd. was evidently formed for the purpose of taking over the maintenance of the entire multi-storeyed building and with a view to make the several owners of the flats contained in the multi-storeyed building as shareholders. It is at this stage it is relevant to take note of the written agreement dated 1-7-1972 which incorporated the tentative arrangements arrived at between the 17 co-owners and the builders. Most of the preamble of this agreement traced the history of the title of the property from time to time, which has already been mentioned earlier and, therefore, it is not necessary to repeat the same. The consideration money for the conveyance of the entire property of land in favour of Ashoka Estate (P.) Ltd., which was to come into existence, was fixed at Rs. 18 lakhs. Clause 4 of the said agreement is relevant as much of argument was advanced on this, especially by the revenue : 4. Nothing contained herein was however, to be construed to confer upon the second party, or allottees of the space, any right, title or interest of any kind, whatsoever, into or over the said land or building or any part thereof.
There are various clauses as to the manner in which the consideration was to be paid but as already indicated 70 per cent of the built-in-area was left for the benefit of the builders. Clause 10 again is relevant for our purpose and it reads as follows : 10. That the second party was to be free to transfer and dispose of flats, offices, showrooms and garages, covered or uncovered, pertaining to its 70 per cent share of the multi-storeyed building plus 3,000 sq. ft. transferable area on the second floor, and as hereinafter mentioned to any party and in any manner it thought fit without any interference from the vendors or any person claiming through any of them.
14. That all persons to whom the second party was to transfer any specified area in the building were to be allotted the said areas under perpetual, heritable and transferable licenses to be granted to the said persons by the said Ashoka Estate (P.) Ltd., in whom the title to the plot No. 24, Barakhamba Road, New Delhi, and the multi-storeyed building to be constructed thereon was to vest at all times. Each of the said persons to whom any such built area was to be allotted was also to be given fully paid share, against payment of the face value of the share. It was also agreed and understood that initially the said allottees were only to be granted.
'Agreement for Licences' and regular licence deeds along with requisite share-scrips were to be handed over to the allottees at the time when the building was completed in all respects arid the possession of the allotted area was handed over to the concerned allottees. It was also agreed and understood between the parties that in case the number of allottees exceed fifty (50), then the said company, known as Ashoka Estate (P.) Ltd., was to be converted into a public limited company to permit the transfer of its shares to more than fifty (50) allottees, ft was also agreed that the allottee of any space in the multi-storeyed was to be a natural person or a juristic person or an otherwise statutory person.
3. With the above arrangements, the builders started to 'book' the flats and collected moneys. Evidently the flats are from out of 70 per cent area allotted to them. The assessees are such allottees. The assessees paid the required amount as demanded by the builders by instalments. Except a receipt for the payment, there, was no formal agreement. The terms and conditions are printed at the back of the receipt. It was stipulated that licence deed would be executed in favour of the licencee within a reasonable time after the entire building is completed. Then came the articles of agreement dated 1-7-1976 wherein Ashoka Estate (P.) Ltd., who became the owner of the plot of land by virtue of the registered conveyance deeds executed by the 17 co-owners in its favour, on one part, builders on the second part and the allottees of the fiat on the third part. This is a tripartite agreement executed between the concerned parties. Apart from tracing the history by which the title in the plot of land passed to Ashoka Estate (P.) Ltd., there are various conditions and stipulations regarding the flat which is allotted to a person. The assessees are the allottees of the flats in the multi-storeyed building. The agreement itself has come into being after the full payment of the consideration for the flats by the allottees and after the completion of the building. Clause 5 of the said deed clearly mentions that after the completion of the building, possession shall be handed over by the seller and the builders to the allottees, who is described as a buyer.
Clause 6 is very relevant: 6. Transfer of legal title - The buyer upon delivery of possession will be entitled to the use and occupation of the said office, showroom/storage space/parking space without any hindrance, but subject always to the stipulation and restrictions contained herein, provided always that nothing contained in these shall ever be construed to confer upon the buyer any right, title or interest, grant, lease, demise or assignment in the land of the said office/showroom/storage space or over the said land or building or any part thereof; such conferment to take only subject to such conditions, as are herein contained or as may be imposed by any authority, and then also upon the execution of such deed or deeds as may be required to be executed in favour of the buyer/buyers. The buyers, shall, however, make payment of all amounts due and payable to the builder/seller before being entitled as aforesaid to the execution of any deed or deeds in favour of the said buyer. All necessary charges including stamp duty, New Delhi Municipal Committee transfer duty, registration charges and all other out of pocket expenses, outgoing and charges in connection with the execution and registration of the aforesaid deeds in favour of the buyer/buyers shall be paid by the buyers in proportion to the area acquired by the concerned buyer/buyers.
The seventeen co-owners referred to above and the buyers of the remaining approximately 70 per cent built or unbuilt area of the said multi-storeyed building shall all become members of the Ashoka Estate (P.) Ltd. in proportion to their holdings in the said Ashoka Estate building. The decision of the seller with regard to the amount of share capital to be taken or allotted to any of the aforesaid parties, comprising the said seventeen co-owners and the said buyer/buyers shall be final and binding on the said co-owners and the said buyer/buyers.
There are conditions by which the buyer has no other right in respect of any space other than his own flat. By Clause 19 there is a restriction on the buyer to let or sub-let, transfer, convey, mortgage, charge, or in any way encumber or deal with or dispose of the property until the full payment is made. Clause 20 deals with the assignment of the rights of buyer and it reads : 20. Transfer charges - The buyer shall not assign his rights under this agreement in the office/showroom/storage space to any individual without obtaining the prior approval in writing of the seller. The transferor shall pay to the seller the transfer charges as prescribed by the seller from time to time.
Once the buyer takes possession, he shall have no claim as per Clause 22 of the agreement. Clause 26 reads : 26. Right of the buyer - The seller covenants with the buyer that on the buyer paying the dues and performing the terms of the agreement and stipulations here in on their/his/her part contained, they/he/she shall peaceably hold and enjoy the said office/showroom without any interruption by any person rightfully claiming under or in trust for the seller.
Since the building is a multi-storeyed one, containing number of flats, certain common obligations are stipulated in the agreement, which shall be the obligations of the limited company, Ashoka Estate (P.) Ltd., who became the owner of the land. By clause 31 all costs, charges and expenses in connection with the transfer of the title to the buyer or formation of the limited company, namely, Ashoka Estate (P.) Ltd., shall be borne by the buyer. The assessees being allottees, have taken possession of the flats after the payment of the full consideration.
They have been in enjoyment of the property and have let out the property to lessees on monthly tenancy basis.
4. In the above background of the facts, the question as already stated is whether the income in respect of the flats taken over by the assessees should be assessed as 'income from house property' or as 'income from other sources'. The ITO took a very simple stand stating that the assessees are not the owners of the property, since there is no legal title vested in them and as such the rental income that they receive should be assessed under the head 'Income from other sources'.
The AAC has taken a different view. According to him, the income is to be assessed under the head 'Income from house property'. The revenue is, therefore, in appeal and the matter has been referred to the Special Bench in view of the conflicting views expressed by different Benches at Delhi.
5. The main thrust of the argument of Mr. S.D. Kapila, for the revenue, is based on the language of Section 22, which reads : 22. The annual value of property consisting of any buildings or lands appurtenant thereto of which the assessee is the owner, other than such portions of such property as he may occupy for the purposes of any business or profession carried on by him the profits of which are chargeable to income-tax, shall be chargeable to income-tax under the head 'Income from house properly'.
He laid emphasis on the meaning of the word 'owner' occurring in Section 22 and according to him answer to the question raised for decision in the Special Bench case is very simple, inasmuch as, the assessee cannot be treated as owner as there is no legal title vested in him. The argument proceeded on the basis that there can be only one ownership in India and it is legal ownership and not beneficial ownership. He has particularly emphasised the point that the Delhi High Court has been consistent in holding that owner under Section 22 means only legal owner. Shri Kapila brought to our notice a passage in the Fatten on Jurisprudence, 4th edition, page 516. Besides all this, he placed strong reliance on the observations of the Supreme Court in Ram Gopal Reddy v. Addl. Custodian Evacuee Property  3 SCR 214 as also the case of Delhi Motor Co. v. U.A Basrurkar  2 SCR 720. He has also brought to our notice the observations of the Supreme Court in the case of S.G. Mercantile Corporation (P.) Ltd. v. CIT  83 ITR 6. In reply Miss Anita Nagpal, appearing for the assessee, contended that the concept of ownership under the Income-tax Act need not be the same as in the case of general law. According to her, ownership must be understood in the light of the rights of a person in possession in regard to a particular property. Strong reliance has been placed on the decision of the Bombay High Court in CIT v. Modern Flats (P.) Ltd.  65 ITR 67 apart from the decision of the Punjab and Haryana High Court in Smt. Kala Rani v. CIT  130 ITR 321.
7. Shri S.B. Gupta, appearing for one of the interveners, has dealt with the matter from different angles in an elaborate manner. According to him the concept of full ownership is not necessary for the purpose of Section 22. He relied on a number of decisions and the observations thereunder. His main reliance, however, was on the case of R.B. Jodha Mai Kuthiala v. CIT  82 ITR 570 (SC). He also placed reliance on some of the passages from the Full Bench decision of the Delhi High Court, which was confirmed by the Supreme Court as above. Based on the decision of the Supreme Court. He argued that it is not necessary that there should be a legal title vested in the assessee and it is enough if there is dominion and control over the property as if the assessee is an owner. Based on the tenor of the documents, he contended that the document should be construed either as a lease or as a licence and in either of the two, the assessee can be treated as the owner for the purpose of Section 22. Mr. Gupta further argued that since the assessee has an interest in the property, the income arising therefrom must be assessed under the head 'Income from house property'. He pointed out that by virtue of the agreement there is an interest in the property possessed by the assessee.
8. Mr. T.R. Chadha, for another intervener, argued that all those cases-which were dealt by the Courts were in respect of a transferor and not in respect of a transferee, who accepts the income as income from property.
9. In reply Mr. Kapila tried to distinguish the decisions cited by the other side and he has also argued that the document can never be treated as a licence or a lease and that it is only an agreement to sell, whereby no rights of ownership could be transferred except in accordance with law relating to transfer of the immovable property.
10. We may also mention that there was an alternative argument advanced on behalf of the assessees that if in case the income is not to be treated as income from property, there is no income to be assessed at all as such income cannot come under the head 'Income from other sources' and this argument is evidently sought to be supported by the decision of the Bombay High Court in CIT v. Smt. T.P. Sidhwa  133 ITR 840. This argument is also sought to be repelled by Mr. Kapila by placing reliance on a contrary decision of the Calcutta High Court in Mrs. Roma Base v. ITO  95 ITR 299. He has particularly emphasised the difference in the wording of the provisions of the Indian Income-tax Act and the Income-tax Act. He also referred to some of the notes on clauses. We may also state that catena of decisions were placed by both the sides and we feel that all of them need not be referred to. We will consider some of them at the relevant stage.
11. But before dealing with the authorities and the arguments, it is necessary to notice the scheme of the Act relating to assessment of income from house property. Every kind of income is sought to be brought in the net of taxation by the Income-tax Act. The charging section under the 1961 Act is Section 4. This brings to charge the total income of the previous year of every person. The total income may consist of income from different sources but the income from different sources is divided into six heads as per Section 14. However, the heads of income merely indicate the class of income but do not exhaustively deal with the sources from which the income arises. Head (C) is income from house property. Head (F) is income from other sources, which is the residuary source. It is necessary to look into the intrinsic nature of the income which is earned to determine the head of the income. It is also well settled that to find out whether income falls under one head or other, it is to be decided according to the common notion of practical men [see CIT v. National Storage (P.) Ltd.  66 ITR 596 (SC)]. Now if we stop here and look into the facts of the case, one can easily say from a practical point of view that what the assessees are getting is income from house property. The assessees got possession of the flats having paid full consideration for the same and are in enjoyment of the property. The property either he may enjoy himself or he may put to any use by which he earns income. In this case, he has let out the property on a monthly tenancy basis and is earning income.
Anybody in the common parlance would immediately state that what the assessee is earning is really income from property. The property is fetching the income- for him. It is admitted on both sides that it is not that the income which the assessee is deriving can be brought under the head 'Business'. There could be, therefore, no difficulty in straightaway bringing the income under the head 'Income from house property'. But then the difficulty that arises is on account of the language used in Section 22. This leads us to the consideration of the provisions of Section 22 in the context of the above reasoning and whether both are in conflict and whether there can be a harmonious view of the matter especially having regard to the facts of the case and the recent developments in the matter of construction of flats in the multi-storeyed building enjoyed by different persons. It is common knowledge that construction of multi-storeyed buildings in big cities has come into vogue on account of paucity of space and for various other practical considerations. It is also well settled in India that the ownership of the land may vest in one but of the super-structure in another. In this case the land admittedly has been transferred by the several co-owners in favour of a limited company but the question is whether the super-structure can be treated as belonging to the flat occupiers (we advisedly do not want to use that they are flat owners for the present). Coming to the wording of Section 22, the computation of property income is on the basis of annual value of the property. How the annual value is to be determined is contained in Section 23. To some extent the income from house property is on an artificial basis especially in the case of owner-occupied property. Prior to the amendment of Section 23 in the year 1979, the annual value is to be determined on the basis of the rent at which the property may be let from year to year. But after the amendment, the annual value is to be computed on the basis of the actual rent received provided it is in excess of the rent which it is expected to fetch. Undoubtedly we are concerned with the provisions as existing prior to the amendment which was brought into force with effect from 1-4-1979. The basic question, however, is whether having regard to the provisions of the Income-tax Act and also the documents which are on record, the assessees can be taxed under the head 'Income from house property'. Here actually lies the difficult part of the matter. We may straightaway state that Mr.
Kapila is right in his submissions that ownership does not pass unless there is a valid conveyance deed duly registered. Many of the authorities cited by him are in support of this proposition about which there can possibly be no quarrel. But, however, the question before us is whether the assessees can be treated as owners having regard to the nature of the documents and the concept of ownership under Section 22, especially in the context of modern way of life in big cities in multi-storeyed flats. The argument on behalf of the assessees proceed on the basis that what the assessees have obtained under the agreement is absolute right of enjoyment and possession without any hindrance whatsoever. The rights according to them are transferable and heritable. There is only husk of title, if at all, that is left out and that would not make any difference for the purpose of treating the assessees as owners under Section 22. We may now consider the decision of the Supreme Court in R.B. Jodha Mai Kuthiala (supra) which has considered the provisions of Section 22 and especially the meaning of the word 'owner' occurring in Section 22. The facts of the case are no doubt peculiar. This was in respect of a property in Pakistan, which was declared as an evacuee property and it vested in the Custodian in Pakistan. It is in that context the question arose whether the assessee can still be considered to be the owner of the property for the purpose of Section 9 of the 1922 Act, which is equivalent to Section 22 of the 1961 Act. The contention on behalf of the assessee was that the expression 'owner' means the persons having the ultimate right to the property. On the other hand, the revenue contended that for the purpose of the Income-tax Act, the owner is that person who is entitled to the income. Their Lordships examined the provisions of the Custodian of Evacuee Property Ordinance, 1947 and their Lordships posed the following question : ... Is it the person in whom the property vests or is it he who is entitled to some beneficial interest in the property . . . (p.
575) ... It must be remembered that Section 9 brings to tax the income from property and not the interest of a person in the property. 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.(p. 575) Incidentally we may mention here that the argument of Mr. Gupta that since the assessee has undoubtedly an interest in the property, he should be assessed under the head 'Income from house property' is completely answered by the above observations. But still we have to find out whether in these cases the assessees will satisfy the tests laid down by the Supreme Court. Coming back to the some other observations of the Supreme Court, it was held that : For determining the person liable to pay tax, the test laid down by the court was to find out the person entitled to that income . . .
.(p. 577) ... 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 . . . (p. 578) They further pointed out that the meaning that has to be given to the word 'owner' in Section 9 must not be such as to make that provision capable of being made an instrument- of oppression. It must be in consonance with the principles underlying the Act. Their Lordships repelled the argument based on the statement of law by Pollock on Jurisprudence, 6th Edition (1929), at pages 178-80, by observing as follows : It is not necessary to consider whether those observations hold good even now because of the various legislative measures enacted during the last about forty years after those observations were made.
Suffice it to say that those observations are inapplicable to the case of the 'owner' under Section 9 of the Act.(p. 579) 12. If only we have to apply the tests laid down by their Lordships of the Supreme Court to the facts of the case, we find really no difficulty in answering the question in favour of the assessees. From a bare perusal of the various terms and conditions of the two documents, we have referred to, what we find is that the assessees have got an absolute right of enjoyment and possession of the flats allotted to them. Since they are the owners of flats in multi-storeyed building, which require certain common facilities, some obligations are imposed, which appear to be restrictions on the use of the flats but, in effect, they are not in any way derogatory to the right of exclusive enjoyment by each of the flat owners. They are merely for the purpose of effective and efficient use of the building for the common benefit of all the flat owners. Such provisions are absolutely necessary to be made in the context of the present day living in multi-storeyed flats.
This sort of living is of recent origin and this was not at all thought of at the time when the laws were made. It is, therefore, necessary to give a practical meaning to the provisions of the taxing statute in the light of various developments that take place in the style of living as in the case of flats in a multi-storeyed building. The flat owners can transfer their rights, the only condition stipulated is that they have to pay to the owner of the building the 'transfer charges', as is it loosely called. The document dated 1-7-1976 clearly points out that there are no other restrictions for the use and enjoyment of the flat by each of the flat owners. They exercise full control and dominion over the flats allotted to them and of which they are in possession.
The income that is received, is from the flats belonging to them. In a situation like this, can we not call the allottees of the flat as the owners of the flat Can it be called that Ashoka Estate (P.) Ltd. is the owner of the flat It is true that the wording of some of the clauses, which we have already extracted, especially in the document dated 1-3-1972, may give scope for an argument that the entire building, which means also the flats, vests with the Ashoka Estate (P.) Ltd. and, therefore, Ashoka Estate (P.) Ltd. can alone be called as the owner. In the beginning itself we have indicated that the documents have not been drafted with proper care. The builders were entitled to build and 70 per cent of the flats built by them are for their benefit.
They are the persons, who have allotted the flats to several allottees and the assessees are the allottees of these flats. The builders are entitled to use those flats in their own way and they are free to give the flats to any of the persons, to whom they want and it is they, that received the consideration for the flats from the flat owners. It is only with a view to have some control about certain amenities and also to provide certain facilities to the flat owners that Ashoka Estate (P.) Ltd. is treated as the owner and not that the ownership of the flats vested with the Ashoka Estate (P.) Ltd. It is a matter of convenience that such provisions were made in the documents as if to show that Ashoka Estate (P.) Ltd. is the owner of the building. By no stretch of imagination or logic, one can call Ashoka Estate (P.) Ltd. as the owner of the flats comprised in the multi-storeyed building.
13. The matter can also be looked into from a different approach on the basis of the documents placed before us. By virtue of an original oral understanding sometime in 1970 the builders have already started constructing the flats on the plot of land. They are given the right in respect of 70 per cent of the flats and that is the consideration which they have received for their work. They are entitled to use those flats in any manner whatsoever. They have constructed the flats with the moneys received from each of the flat owners, to whom they have allotted the flats. They have virtually constructed the flats on behalf of the allottees with their moneys. At the time of allotment the particular flat number is indicated and it is that flat that is allotted ultimately to the allottees after the receipt of the consideration fully by the builders. Possession is delivered to the allottees after the completion. Each of the flat is built for the benefit of the allottees. The moment the flats are completed and handed over to each of the allottees, they can be treated as the owners of those flats, but as already indicated subject to certain restrictions in view of the fact that the flats are in one building.
14. At this stage we are tempted to refer to the decision of the Bombay High Court in the case of Modern Flats (P.) Ltd. (supra). More or less the facts were similar and in that case the revenue sought to assess the builder and in that connection their Lordships held that the builder cannot be treated as an owner and that the individual flat owners are the real owners. Their Lordships held : From these provisions it is clear that the assessee has sold whatever right, title and interest it had to the individual flat owners who are called the purchasers under the document. What is more, the purchaser is given the right in his turn to sell or assign the rights given to him by the document. The proviso does not in any way fetter that right. The proviso is only incorporated in order to safeguard the company's interest which is that the company continues to exist for the purposes of management of the entire property, but it has no other right, title or interest in the building as such after the transfer of the rights to the individual flat holders.
Mr. Joshi pointed to some clauses in this agreement to suggest that all rights had not been transferred-particularly to Clause (7) which contains an undertaking on the part of the purchaser to co-operate with the company and/or other purchasers in the observance and performance of the rules and regulations that the said company may adopt at its inception and from time to time conforming to the building rules and the municipal bye-laws and the strict observance of the various stipulations and conditions laid down by the said company respecting the use and occupation of the particular tenements by particular member for the unexpired residue of the said term of 99 years. These are in no sense limitations upon the right, title and interest in the property which the flat-holders had acquired. These are stipulations entered into by each flat-holder for the common good of all flat-holders. They do not in any way restrict the rights acquired by the flat-holders nor their right to sell or assign their rights to others given by Clause (14). Such stipulations are necessary in the common interest of all the flat-holders and are stipulations which are usually found in all agreements where ownership flats exist in one building.(p. 79) The above observations, in our opinion, are clearly applicable to the facts of the case. However, Mr. Kapila referred to us the decision of the Delhi High Court in the case of Addl. CIT v. Mercury General Corporation (P.) Ltd.  133 ITR 525 wherein the aforesaid decision of the Bombay High Court has been explained. Therefore, Mr. Kapila pointed out that the Bombay High Court decision should not be applied to the facts of the case. But we find that there is no inconsistency between the view expressed by the Bombay High Court in Mercury General Corpn. (supra) (sic). In fact this decision is altogether in a different context and the issue involved is different.
15. We may now refer to the decision of the Bombay High Court in the case of CIT v. Fazalbhoy Investment Co. (P.) Ltd.  109 ITR 802.
There also the building was constructed by the builder out of the contribution made by the flat owners towards the cost of construction and when the construction was completed, the flat owners actually went into possession of their respective portions. No doubt in that case the builder was sought to be assessed. But from the reasoning which the Hon'ble High Court adopted, it indicates that the flat owners are considered to be the owners.
16. The Madras High Court had an occasion to consider the meaning of the word 'owner' in the case of Mrs. M.P. Gnanambai v. CIT [l982] 136 ITR 103 and their Lordships observed that it is not necessary for the purpose of assessment under Section 22 that the assessee should be absolute owner of the properties and in given cases even a life estate holder can be equated to the owner of the property so long as he or she was in a position to enjoy the property or the income therefrom.
17. In S.G. Mercantile Corporation (P.) Ltd. (supra), the Supreme Court was concerned with the issue as to whether the income from sub-letting of shops and stalls can be treated as business income or income from other sources. But in the course of discussion, their Lordships referred to the provisions of Section 9 of the 1922 Act. There their Lordships held that the liability to tax under Section 9 is on the owners of the building or lands appurtenant thereto. We do not think that this decision is of much assistance to the revenue as it is nobody's case that income under Section 22 is not to be assessed in respect of house on the basis of ownership. What we are trying to find out is whether having regard to the connotation of the word 'ownership' coupled with the material on record, the assessees can be treated as owners of the house.
18. It is now, therefore, necessary to refer to the decisions of the Delhi High Court on which very strong reliance is placed by Shri Kapila. The first one is reported in D.C. Anand & Sons v. CIT  131 ITR 77 (Cal.)- It was held that where there was a transfer but without a registered deed, the transferor is still liable as owner for being taxed under Section 22 under the head 'Income from house property'. This is a case where the facts are totally different. Their Lordships had no occasion to consider a case of a flat owner. One of the questions argued was whether there was an overriding title, and their Lordships held that there was no such overriding title. Their Lordships further held that it was only a case of the owner having disabled himself by contract, voluntarily entered into by him, from being able to receive the rent. Undoubtedly their Lordships have ruled that so far as the property income is concerned, once it is established that the assessee is the owner of the property, he is assessable on the annual value of the property. We have tried to show that the flat owners are the owners in this case. We do not say that they are not the owners but still they have to be assessed under the head 'Income from house property'. All that we have tried to show is that the assessees can be equated as owners and as such their income should be assessed under the head 'Income from house property'. We may also mention here that the above decision followed the earlier decision of the Delhi High Court in CIT v. Col. H.H. Raja Sir Harinder Singh  73 ITR 433.
19. In 11 ILR 542, the transferor was held to be liable to tax in respect of the property transferred without a registered document.
There also their Lordships held that the transferor was still the owner of the property and the transferee did not become the owner. That is a clear case of a transfer made but not registered. The situation and the facts are totally different. Once it was held that the transferor continued to be the owner and the transferee did not become the owner, the natural consequence would be that the transferor as owner would be liable to tax and not the transferee because he cannot be treated as the owner.
20. Similarly, all other cases, which have been cited by Shri Kapila, which only show that whenever there is a transfer without a registered conveyance deed, the transferor is treated as the owner liable to tax and not the transferee. These decisions proceed on the footing that the transferor continued to be the owner and, therefore, he is liable to be assessed as owner in respect of the house property. In these decisions, there was no occasion for considering as to whether an assessee can be treated as an owner. They proceeded on the assumption that there was an original owner and the ownership rights were sought to be transferred without a proper and valid conveyance deed. Similarly, the decision cited by Shri Kapila in Delhi Motor Co. (supra) is distinguishable and it cannot help us to decide the issue before us.
21. Finally we may add that the Punjab and Haryana High Court in the case of Smt. Kala Rani (supra) have held, following the decision of the Supreme Court in the case of R.B Jodha Mai Kuthiala (supra), that the assessee, who occupied the property after execution of the agreement for sale, could be held as owner. But the facts are totally different and we cannot straightaway apply the law as laid down by the Hon'ble High Court, especially when on this issue the Hon'ble Delhi High Court holds a different view. We have, however, tried to show that the decisions of the Delhi High Court are distinguishable so far as the facts of this case before us are concerned.
22. In the view that we have taken, it is not necessary to decide the alternative contention raised by the assessees. The assessees want that the income should be assessed under the head 'Income from house property' and in fact there is no cross-objection and, therefore, their plea, in the alternative, that no income could be assessed at all is unnecessary to be decided. We, accordingly, express no opinion on the point.
23. Before concluding we would like to point out that so far as the flats in a multi-storeyed building belonging to a co-operative society is concerned, there is no difficulty. Prior to the amendment of Section 27, whereby a member of the house building co-operative society shall be deemed to be the owner of the flat, by executive instructions, the Central Board of Direct Taxes treated the members of the co-operative society occupying each of the flats as the owners thereof and the income is being assessed under the head 'Income from house property'.
The matter was clarified beyond any doubt. There is absolutely no difference between the flat owners in a building managed and maintained by a co-operative society and the flat owners in a multi-storeyed building, which is managed and maintained by a limited company.