JUDGMENT R.K. Agrawal, J.
1. The Income-tax Appellate Tribunal, Allahabad in Income-tax Reference No. 177 of 1989, which relates to the assessment years 1979-80 and 1982-83 has referred the following question of law under Section 256(2) of the Income-tax Act, 1961, hereinafter referred to as "the Act":
Whether under the facts and circumstances of the case the Income-tax Appellate Tribunal was justified in finding income of house property 64, Lajpatnagar, Varanasi, assessable in the assessee's hand ?
2. Whereas in I. T. R. No. 177 of 1991, which is at the instance of the Revenue and which relates to the assessment year 1983-84, the Income-tax Appellate Tribunal, Allahabad has referred the following question of law under Section 256(1) of the Act:
Whether, on the facts and in the circumstances of the case, the hon'ble Income-tax Appellate Tribunal was justified in holding that the income from the house property 64, Lajpat Nagar, Varanasi was assessable in the hands of Smt. Vimlawati Tandon, the wife of the assessee ?
3. As the two references relate to the same assessee, they were heard together and are being decided by a common order.
4. Briefly stated the facts giving rise to the present references are as follows:
5. Sri Ram Saran Das Tandon, the assessee became a member of Lala Lajpat Rai Grih Nirman Sahakari Samiti, Varanasi, hereinafter referred to as "the society". The object of the society was to purchase and allot land in favour of its members. As per the bye-laws, after the allotment, the plots were transferred to the members of the society. The assessee who had been allotted a plot No. 64 in Lajpat Nagar by the society constructed a house during the year 1957-58. The construction was made with the permission of the society. In the year 1975 he moved an application before the society for substituting the name of his wife-Smt. Vimlawati Tandon, in the record of the society in his place. After observing the necessary formalities, the name of Smt. Vimlawati Tandon was substituted in place of the applicant. Thereafter, he received a sum of Rs. 60,000 by cheque on March 30, 1979, from Smt. Vimlawati Tandon towards the investment made and in getting the allotment of the land and the construction of the house by way of reimbursement/compensation. The society has executed a registered sale deed in respect of the plot in question in favour of Smt. Vimlawati Tandon on April 7, 1983. In the return filed under the Act for the assessment years 1979-80 onwards the assessee did not disclose the income from the house property, 64, Lajpat Nagar, Varanasi whereupon the Income-tax Officer made an enquiry and included the income of the property in the hands of the assessee. However, on appeal the Commissioner of Income-tax (Appeals) deleted the addition. On further appeal before the Tribunal by the Revenue, the Tribunal has set aside the order of the Commissioner of Income-tax (Appeals) and restored the order of the Income-tax Officer. However, in respect of the assessment year 1983-84 the Tribunal has confirmed the order of the Commissioner of Income-tax (Appeal).
6. We have heard Sri Krishna Agrawal, learned Counsel appearing for the assessee and Sri R. K. Upadhyay, learned Counsel appearing for the Revenue in both the references.
7. Learned Counsel for the assessee submitted that it is not in dispute that plot No. 64, Lajpat Nagar, Varanasi was allotted to the assessee by the society and he had made some constructions over it with the permission of the society. However, in the year 1975, the assessee surrendered his membership in the society and in his place his wife became a member of the society. The society admitted his wife as a member in his place and thus for all practical purposes his wife Smt. Vimlawati Tandon became the owner of Plot No. 64, Lajpat Nagar, Varanasi. She had also paid the amount incurred by him for the construction of the house and other incidental expenses by cheque. According to him, in view of Section 22 of the Act, under law Smt. Vimlawati Tandon would be the owner of the plot and the house property, 64, Lajpat Nagar, Varanasi and the income from it cannot be added in his hands. He has relied upon the following decisions in support of his submissions:
(1) CTT v. Podar Cement P. Ltd. ; and (2) Nawab Mir Barkat Ali Khan v. CWT .
8. Sri R. K. Upadhyay on the other hand submitted that the assessee, namely, Sri Ram Saran Das Tandon would be treated to be the owner of the house property, 64, Lajpat Nagar, Varanasi till such time it is transferred by way of registered sale deed and the said property would continue to belong to him irrespective of the fact that in the list of members of the society his name has been deleted and in his place the name of his wife has been entered. He placed reliance on a decision of the apex court in the case of Nawab Mir Barkat Ali Khan v. CWT . He further submitted that in respect of the assessment year 1983-84, the Tribunal has committed an error in deleting the addition in respect of the income from house property, 64, Lajpat Nagar, Varanasi, in the hands of the assessee.
9. Having given our anxious consideration to the various pleas raised by learned Counsel for the parties, we find that the facts are not in dispute. The question is as to whether the house property, 64, Lajpat Nagar, Varanasi can be treated to belong to the assessee Sri Ram Saran Das Tandon or to Smt. Vimlawati Tandon after 1975 when the name of Smt. Vimlawati Tandon was entered in the members' register of the society in place of her husband. The question need not detain us any longer as we find that under Clause (iii) of Section 27 of the Act, which reads as under:
27. For the purposes of Section 22 to 26-
(iii) a member of a co-operative society to whom a building or part thereof is allotted or leased under a house building scheme of the society shall be deemed to be the owner of that building or part thereof;
10. As a person who is a member of a co-operative society to whom a building or part thereof is allotted or leased is treated to be the owner of that building or part thereof, the assessee was not the member of the co-operative society during the relevant assessment years, membership having been transferred to his wife, in his place, the assessee cannot be held to be the owner of the house property No. 64, Lajpat Nagar, Varanasi.
11. We further find that in the case of Podar Cement P. Ltd. the apex court has held as under (headnote):
... though under the common law 'owner' means a person who has got valid title legally conveyed to him after complying with the requirements of law such as the Transfer of Property Act, the Registration Act, etc., in the context of Section 22 of the Income-tax Act, 1961, having regard to the ground realities and further having regard to the object of the Income-tax Act, namely, to tax the income, 'owner' is a person who is entitled to receive income from the property in his own right. The requirement of registration of the sale deed in the context of Section 22 is not warranted.
12. Applying the principles laid down by the apex court to the facts of the present case, we are of the considered opinion that as the assessee ceased to be the member of the society in the year 1975 and in his place Smt. Vim-lawati Tandon became a member of the society, the house property, 64, Lajpat Nagar, Varanasi belongs to Smt. Vimlawati Tandon and not to the assessee.
13. We, therefore, answer the question referred to us in I. T. R. No. 177 of 1989 in the negative, i.e., in favour of the assessee and against the Revenue and the question referred to us in I. T. R. No. 177 of 1991 in the affirmative i.e. in favour of the assessee and against the Revenue.
14. The parties shall bear their own costs.