The main legal point established in the judgment is that for the purpose of Section 22 of the Income Tax Act, 1961, the ownership of property is transferred only by execution and registration of sale deed and not by other acts such as delivering vacant possession and giving all rights of interest in the property including the right of realization of rent.

( 1 ) THIS is a reference made by the Income tax Appellate Tribunal, Bangalore Bench, under Section 256 (1) of the Income Tax Act, 1961. The question of law referred for our opinion reads:"whether for purposes of Section 22 of the Income Tax Act 1961 the ownership of property is transferred only by execution and registration of sale deed and not by other acts such as delivering vacant possession and giving all rights of interest in the property including the right of realisation of rent?"

( 2 ) THE relevant facts are these: The assessment year is 1978-79. The assessee being the owner of certain industrial sheds at ahmedabad, had leased them to one Y. G. Panduranga Setty and four others, from 31-7-1974 for a period of 98 years on an annual rent of Rs. 35,000-00. The assessee with the consent of the lessee entered into an agreement on 1st September 1975 with a partnership firm styled Lakshmi Commercial corporation for the sale of the property for a consideration of Rs. 4,20,000-00. In part performance of the agreement, the assessee delivered vacant possession of the property to lakshmi Commercial Corporation giving the firm all rights, title and interest which the assessee had in the property including the right to collect the rent from the property. The assessee could not execute the sale deed so as to bring about the transfer of property in favour of Lakshmi Commercial Corporation. The question raised by the assessee before the income Tax Officer was that the income from the said property was not chargeable to tax at the hands of the assessee. The assessee also invoked the provisions of Section 53a of the transfer of Property Act and contended that in part performance of the contract for sale, the possession of the property had been handed over to Lakshmi Commercial corporation and the assessee retained no right to receive any income from the property and therefore the income from that house property was not chargeable to tax under the Act. The claim of the assessee was negatived by the income Tax Officer. He held that in the eye of law the assessee was the owner of the property and therefore it was chargeable to tax under section 22 of the Act. The Appellate Assistant commissioner also held that the transfer of immovable property of the value of Rs. 100/- and above could be only by means of registered instrument and in the absence of such an instrument, the assessee continued to be the owner of the property and therefore liable to pay tax. The assessee appealed to the tribunal. The Tribunal also affirmed the view taken by the Income Tax Officer and the appellate Assistant Commissioner. Thereafter, at the instance of the assessee, the question set out earlier, had been referred for our opinion.

( 3 ) THE learned counsel for the Revenue submitted that in view of the ratio of the decision in Nawab Sir Mir Qsman All Khan v commissioner of Wealth Tax - (AIR 1987 SC 522) the question has to be answered in the affirmative and against the assessee.

( 4 ) THE question for consideration in Ali khan's case - (AIR 1987 SC 522) was, whether under the provisions of the Wealth tax Act a property in respect of which consideration had been received and the possession has been handed over to the intending purchaser, though sale deed was not executed, was property belonging to the person concerned and therefore liable to wealth tax under the provisions of the Wealth Tax Act 1957? The expression "net wealth" has been defined under Section 2 (m) of the Wealth tax Act, which reads thus:"2 (M) 'net wealth' means the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date. . . "the Supreme Court on an interpretation of the above provi