{"id":70953,"date":"2001-09-26T00:00:00","date_gmt":"2001-09-25T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/cit-vs-sarabhai-chemicals-p-ltd-on-26-september-2001"},"modified":"2019-02-10T13:39:47","modified_gmt":"2019-02-10T08:09:47","slug":"cit-vs-sarabhai-chemicals-p-ltd-on-26-september-2001","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/cit-vs-sarabhai-chemicals-p-ltd-on-26-september-2001","title":{"rendered":"Cit vs Sarabhai Chemicals (P) Ltd. on 26 September, 2001"},"content":{"rendered":"<div class=\"docsource_main\">Gujarat High Court<\/div>\n<div class=\"doc_title\">Cit vs Sarabhai Chemicals (P) Ltd. on 26 September, 2001<\/div>\n<div class=\"doc_citations\">Equivalent citations: 2001 119 TAXMAN 611 Guj<\/div>\n<div class=\"doc_author\">Author: Mehta<\/div>\n<\/p>\n<pre><\/pre>\n<p>JUDGMENT<\/p>\n<p>Mehta, J. <\/p>\n<p>At the instance of the Commissioner, the Tribunal, Ahmedabad Bench &#8216;C&#8217;, has referred the following question of law for the opinion of this court :\n<\/p>\n<p>&#8220;Whether, the Appellate Tribunal is right in law in allowing reduction of Rs. 2,69,194 on account of property income ?&#8221;\n<\/p>\n<p>2. The assessment year is 1979-80 and the relevant accounting period is commencing from 1-7-1977 and ending on 30-6-1978. The assessee entered into an agreement for sale on 28-2-1977 whereby the industrial undertaking and the business of the assessee were transferred to one Elscop (P) Ltd.; pursuant to the aforesaid agreement for sale a deed of assignment was executed on 28-6-1977. Immovable properties which were part and parcel of the industrial undertaking were transferred under duly executed registered document on 2-2-1978. In view of these facts, the Income Tax Officer was of the view that as the assessee was the legal owner of the property in question, till conveyance was duly registered, proportionate property income, i.e., from 1-7-1977 to 2-7-1978 should be assessed in the hands of the assessee. He, accordingly, brought to tax a sum of Rs. 6,69,194 being the proportionate ALV for seven months.\n<\/p>\n<p>3. The Commissioner (Appeals) came to the conclusion that the assessee-company was left with merely a technical or formal ownership of the immovable property and as the immovable property formed part of the industrial undertaking whose control and management vested with the vendee, there was no question of assessing the proportionate income from property in hands of the assessee. The Tribunal confirmed the view taken by Commissioner (Appeals) in the appeal of the revenue and, hence, this reference.\n<\/p>\n<p>4. We have heard Mr. Akil Oureshi, the learned standing counsel for the revenue and Mr. R.K. Patel, the learned counsel representing the assessee-respondent. In our opinion, the question is concluded by the decision of the Apex Court in the case of CIT v. Podar Cement (P) Ltd. (1997) 226 ITR 625 (SC) as well as Full Bench decision of this court in CIT v. Mormasji Mancharji Vaid( 2001) 250 ITR 542 (Guj). In the case of Podar Cement (P) Ltd. (supra) the Apex Court has held that the property cannot be owned by two persons, each one having independent and exclusive right over it. Hence, for the purpose of section 9 of the Indian Income Tax Act, 1922, the owner must be &#8220;that person who can exercise the rights of the owner, not on behalf of the owner but in his own right&#8221;. Therefore, in light of the aforesaid ratio, the liability to pay tax on income from property is clearly on the person who receives or is entitled to receive the income from property in his own right.\n<\/p>\n<p>5. In light of the facts stated hereinbefore and applying the ratio of the aforesaid decisions to the facts of the case, we do not find any infirmity in the order of the Tribunal. The Tribunal was right in allowing the reduction of Rs. 2,69,194 on account of property income. The question is answered in the affirmative, i.e., in favour of the assessee and against the revenue.\n<\/p>\n<p>6. The reference is disposed of, accordingly, with no order as to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Gujarat High Court Cit vs Sarabhai Chemicals (P) Ltd. on 26 September, 2001 Equivalent citations: 2001 119 TAXMAN 611 Guj Author: Mehta JUDGMENT Mehta, J. At the instance of the Commissioner, the Tribunal, Ahmedabad Bench &#8216;C&#8217;, has referred the following question of law for the opinion of this court : &#8220;Whether, the Appellate Tribunal is [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[16,8],"tags":[],"class_list":["post-70953","post","type-post","status-publish","format-standard","hentry","category-gujarat-high-court","category-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Cit vs Sarabhai Chemicals (P) Ltd. on 26 September, 2001 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/cit-vs-sarabhai-chemicals-p-ltd-on-26-september-2001\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Cit vs Sarabhai Chemicals (P) Ltd. on 26 September, 2001 - Free Judgements of Supreme Court &amp; 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