Ownership of house property for the purpose of Section 22 of the Income Tax Act, 1961, does not require a sale deed.

J.V.Gupta, J.

1. In these two references, under Section 256(1) of the I.T. Act, 1961 (hereinafter called "the Act"), relating to the assessment years 1968-69 and 1969-70, the following two questions of law have been referred for our opinion :

"1. Whether, on the facts and in the circumstances of the case, the assessee could be regarded as owner of the house property in question as contemplated in Section 22 of the Income-tax Act, 1961, for the assessment years 1968-69 and 1969-70?

2. Whether, on the facts and in the circumstances of the case, and having regard to the sale deed executed on April 11, 1969, the Tribunal was right in law in holding that the income from self-occupied property was rightly included as the assessees income from house property for the assessment years 1968-69 and 1969-70 ?"

2. The answer to question No. 2 depends on the answer to question No. 1.

3. The facts giving rise to these references are these. The assessee is an individual. The previous years relevant to the assessment years 1968-69 and 1969-70, ended on March 31, 1968, and March 31, 1969, respectively. By an agreement dated March 17, 1964, between Shri Pran Nath Bhatia (the vendor), the assessee (the vendee) purchased plot No. 192, street "K" Sector 18-C, Chandigarh (R.P. No. 980), measuring 50005 square yards along with certain superstructure in the nature of filled foundations and incomplete structure of garage, bathroom and W.C. for a consideration of Rs. 11,000. A loan of Rs. 12,000 sanctioned by the Punjab Govt. for the construction of the house over the aforesaid site was also transferred to the vendee. The assessee undertook the construction of the house and the same was completed in May, 1967. The sale deed was executed by the assessee and the vendor on April 11, 1969. On the ground that the assessee had become the owner of the property only during the accounting year 1969-70, relevant to the assessment year 1970-71 by virtue of the registered sale deed, income from the self-occupied property was not shown for the assessment years 1968-69 and 1969-70. The assessee actually occupied the said house during the previous years relevant to the assessment years 1968-69 and 1969-70. With a view to bring to tax the income from the self-occupied property, notices under Sections 148 of the Act, were issued by the ITO for both the years as assessments for both these years had already been completed. In compliance with the notices, the assessee filed returns for both these years on March 1, 1973. It was claimed that as the assessee was not the owner of the property in question the income from the self-occupied property was not required to be included in the assessments. This plea of the assessee was not accepted by the ITO. Consequently, he taxed the income from the self-occupied property at Rs. 1,604 for the assessment year 1968-69 and at Rs. 2,096 for the assessment year 1969-70. The assessee also failed before the AAC in appeal. A further appeal before the Income-tax Appellate Tribunal, Chandigarh Bench, filed on behalf of the assessee, was also dismissed by the Tribunal, vide its order dated January 31, 1975, giving rise to the reference of the above questions of law to this court.

4. The learned counsel for the assessee contended that unless the sale deed, dated April 11, 1969, was executed, the assessee did not become the owner of the property as contemplated under Sections 22 of the Act, which is as follows :

"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 property ."

5. According to the learned counsel, the mere possession of the property, in pursuance of an agreement to sell, is not sufficient to burden the assessee with