This appeal filed by revenue relates to assessment year 1977-78 and is directed against order dated 19-2-1983 passed by Commissioner (Appeals). 2. first ground raised by revenue states that on facts and in circumstances of case Commissioner (Appeals) erred in deleting notional income of Rs. 7,298 under head ' Income from house property '. 3. assessee is limited company. accounting period for assessment year with which we are concerned in this appeal is calendar year 1976. assessment was framed by ITO under section 143(3)/144B of Income-tax Act, 1961 (' Act '). It will be seen that assessee purchased flat at 4-H Rajashree, 6, Hastings Park Road, Alipore, Calcutta, from Ashoke Marketing Ltd. deed of conveyance was executed and registered on 10-2-1978. This flat was purchased by assessee with intention of providing residence to its general manager. Before ITO it was submitted on behalf of assessee that it had no intention to let out this property. amount equal to 10 per cent of salary of general manager was recovered from him and credited in account. In return filed by assessee net income of Rs. 235 was shown under head ' Income from house property ' with reference to recovery made from general manager. ITO, in draft assessment order prepared by him, took view that assessee was liable to tax on notional income in respect of this flat. Considering prevailing rent in neighbourhood, ITO estimated rent of Rs. 1,200 per month in respect of this property. As assessee was in possession of same in accounting year for period of 9 months, income from this property was computed on basis of rental income for 9 months at rate of Rs. 1,200 per month at Rs. 10,800. After making allowance for outgoings net rental income was computed at Rs. 7,298. It further appears that against draft assessment order proposing to bring to tax notional income of Rs. 7,298 under head ' Income from house property ', no objection was filed on behalf of assessee. computation of income from this property as done in draft assessment order was approved by IAC vide his order dated 6-8- 1979 under section 144B(4). perusal of order of IAC goes to show that before him it was contended on behalf of assessee that income from aforesaid property should be considered under head ' Profits and gains of business or profession ' and not under head ' Income from house property '. It was also submitted that assessee would be filing revised return in accordance with their present claim. In accordance with direction of IAC, ITO, however, computed notional income of Rs. 7,298 from said property under head ' Income from house property ' in assessment order framed by him under section 143(3)/144B. 4. matter was carried in appeal before Commissioner (Appeals) before whom it was submitted that on appraisal of correct legal position assessee was informed that it would not be liable to tax under head ' Income from house property ' at all in respect of said flat as same was intended only to be given to its general manager for his residence. Reliance was also placed on decisions in CIT v. Delhi Cloth & General Mills Co. Ltd. [1966] 59 ITR 152 (Punj.) and Jamshedpur Engg. & Machine Mfg. Co. Ltd. v. CIT [1957] 32 ITR 41 (Pat.). It was further submitted that rent receipt from assessee's employee was only business receipt and was chargeable under head ' Profits and gains of business or profession '. Commissioner (Appeals) o n basis of fact that conveyance for purchase of flat was executed and registered only on 10-2-1978 held that assessee cannot be charged this year to tax on any notional income from said flat under head ' Income from house property ' on basis of ratio of decision of Calcutta High Court in CIT v. Ganga Properties Ltd. [1970] 77 ITR 637. Commissioner (Appeals) further found that there is no evidence on record to dispute assessee's submission that flat was purchased by assessee i n order to provide residence to its general manager and that flat has not been let out to any person who is not employee of assessee-company. He also found that activity of letting out flat to assessee's employee has definite nexus with its business and so income received by assessee in such circumstance is income received in course of carrying on of business. Consequently, Commissioner (Appeals) recorded finding that assessee is not liable to be assessed in respect of any notional income from flat under head ' Income from house property ' and that rent received from general manager is to be regarded as taxable business receipt. ITO was, accordingly, directed to include said receipt in computation of business income. In accordance with these findings Commissioner (Appeals) deleted inclusion of Rs. 7,298 in total income as ' Income from house property '. Aggrieved, revenue has come up in appeal before us. 5. Shri S.P. Chaliha, learned departmental representative, has contended before us that as full consideration for flat had been paid by assessee and it had been put in possession thereof and was in full enjoyment of t h e property, for all practical purposes, it became owner of property within meaning of section 22 of Act, with result that notional income in respect of property was chargeable to income-tax under head ' Income from house property '. In support of this contention reliance has been placed on behalf of revenue on decision of Supreme Court in R.B. Jodha Mal Kuthiala v. CIT [1971] 82 ITR 570 and decision of Patna High Court in Addl. CIT v. Sahay Properties & Investment Co. (P.) Ltd. [1983] 144 ITR 357. Reliance has also been placed on decision of Calcutta High Court in case of CIT v. Salkia Transport Associates [1983] 143 ITR 39. It was further submitted that in return filed by assessee itself income from flat purchased by it was shown under head ' Income from house property '. In this connection, it was further pointed out that against draft assessment order prepared by ITO, no objection was filed on behalf of assessee, regarding proposed inclusion of income from flat under head ' Income from house property '. In this connection it was further pointed out that in balance sheet also this property has been shown as house property of assessee. It was, thus, submitted that ITO was justified in bringing to tax notional income from this property under head ' Income from house property '. It has also been submitted before us that in case of Ganga Properties Ltd. relied upon by Commissioner, Supreme Court decision in R.B. Jodha Mal Kuthiala's case has not been considered and that, therefore, Calcutta High Court decision in aforesaid case should not be considered as laying down good law. 6. Shri R.N. Bajoria, learned authorised representative for 6. Shri R.N. Bajoria, learned authorised representative for assessee, has made two-fold submissions before us. It was submitted that in view of fact that assessee did not become legal owner of flat in question in accounting year relevant to assessment year under appeal, income from this property is not chargeable under head ' Income from house property ' under section 22. In support of this contention reliance has been placed on two decisions of Calcutta High Court in Ganga Properties Ltd. and S.B. (House & Land) (P.) Ltd. v. CIT [1979] 119 ITR 785. It was also pointed out that Calcutta High Court in its decision in case of S.B. (House & Land) (P.) Ltd. has considered Supreme Court decision in case of R.B. Jodhamal Kuthiala. It was further submitted that in case of Salkia Transport Associates, cited on behalf of revenue, question involved related to allowance of depreciation under section 32 of Act on motor vehicles and that ratio laid down in that case by Calcutta High Court does not at all support contention advanced on behalf of revenue. 7. second limb of argument advanced on behalf of assessee by Shri R.N. Bajoria, is that income derived from flat let out to assessee's general manager for his residence has to be assessed as business income. Elaborating, it was submitted that flat purchased by assessee with intention of providing residence to its general manager constituted its business asset and, therefore, income derived therefrom accrued to assessee, while carrying on its business activity, income so derived in course of carrying on of business is taxable as business income. In support of this submission reliance was placed on decision of Patna High Court in Jamshedpur Engg. & Machine Mfg. Co. Ltd.'s case, decision of Punjab High Court in Delhi Cloth & General Mills Co. Ltd.'s case and decision of Madhya Pradesh High Court in CIT v. National Newsprint & Paper Mills Ltd. [1978] 114 ITR 388. 8. Shri R.N. Bajoria then contended that even if no objection was filed by assessee against draft assessment order to proposed inclusion of notional income under head ' Income from house property ' assessee was not debarred from assailing order of ITO on point in appeal filed before Commissioner (Appeals). In support of this contention reliance has been placed on decision of Tribunal, Bombay Bench ' C ' (Special Bench), in ITO v. Sippy Films [1982] 1 ITD 1031. 9. We have considered rival submissions and facts on record. We have also gone through various authorities cited before us on behalf of parties. In Ganga Properties Ltd.'s case, it has been held by Calcutta High Court that in case of sale of immovable property registered document is necessary to give effect to sale and sale takes effect only from date of execution of document. It was further held that in Indian law beneficial owner is unknown. There is but one owner, namely, legal owner both in respect of vendor and purchaser. It was further held that expression ' Income from house property ' used in sections 6 and 9 of Indian Income-tax Act, 1922 (' 1922 Act '), refers to income of legal owner of property and he is only person assessable to tax on basis of bona fide annual value thereof. ratio laid down is this authority is fully applicable to facts of case in hand. In instant case, since deed of conveyance in respect of flat in question was executed and registered only on 10-2-1978, i.e., beyond accounting period relevant to assessment year under appeal, notional income from this property was not chargeable under section 22 under head ' Income from house property ' simply for reason that during that period assessee was not legal owner of this property. Income from this property cannot be assessed under head ' Income from house property ' only because during relevant accounting period or any part thereof, assessee was in possession and enjoyment of this property. 10. In case of S.B. (House & Land) (P.) Ltd. their Lordships of Calcutta High Court did take into consideration decision of Supreme Court in R.B. Jodha Mal Kuthiala's case relied upon by assessee in that case it was found that there has been only transfer by way of sub-lease and not sale divesting transferor of all rights of ownership in property. It was, thus, held by Calcutta High Court that assessee remained owner of property and was assessable as such. This authority also goes to support submissions made before us on behalf of assessee. 11. Patna High Court in case of Sahay Properties & Investment Co. (P.) Ltd. has no doubt taken view which is favourable to assessee. However, as we are bound by decisions of Calcutta High Court in cases referred to above, we hold that for assessment year under appeal, notional income from flat purchased by assessee cannot be assessed under head ' Income from house property '. 12. From facts found by Commissioner (Appeals) it is evident that t h e assessee purchased aforesaid flat with intention of providing residence for its general manager. Till today this property has not been let out to any person other than employee of assessee-company. dominant purpose of letting out this property by assessee to its employee is to carry on its business more efficiently and smoothly. In view of these facts, we are in agreement with finding of Commissioner (Appeals) that activity of such letting out has definite nexus with business carried on by assessee-company and so income received by assessee from this property i s income received in course of carrying on of its business. In Jamshedpur Engg. & Machine Mfg. Co. Ltd.'s case it was held by Patna High Court that as letting out of residential quarters by assessee to its employees was subservient to and incidental to main business, section 9 of 1922 Act did not apply and expenditure incurred by assessee for repairs and maintenance of residential quarters was allowable as deduction from profits of business of assessee-company under section 10(2)(xv) of 1922 Act. In Delhi Cloth & General Mills Co. Ltd.'s case assessee company owned several buildings, most of which were let out to its employees. It was held that income of assessee from buildings rented out to its employees was income from business and fell for assessment under section 10 as ' Income from business ' and not under section 9 as ' Income from house property '. In case of National Newsprint & Papers Mills Ltd., it has been held by Madhya Pradesh High Court that rent received by assessee-company from residential quarters of employees is to be treated as business income. So all these authorities cited on behalf of assessee support its claim that income from aforesaid flat is to be assessed as business income and not as income from house property. 13. It is true that during assessment proceedings, it was stated on 13. It is true that during assessment proceedings, it was stated on behalf of assessee that income from flat should be assessed under head ' Income from house property ' as it was de facto owner of same. However, before assessment could be finalised, assessee took up stand before IAC that income from flat should be assessed as business income. Moreover, even if inclusion of income from flat under head ' Income from house property ' was not objected to by assessee before ITO, it was not prevented from doing so before appellate authority. Special Bench of Tribunal in Sippy Films' case has held that assessee's right to appeal against order passed under section 143(3) could not be taken away or abrogated on ground that no objection was filed by assessee against draft assessment order prepared by ITO under section 144B. We are, thus, clearly of opinion that nothing turns on fact that at initial stage assessee itself asserted that income from flat should be assessed under head ' Income from house property ' and that it did not file any objection on this point against draft assessment order prepared by ITO under section 144B. In view of what has been said above, ground No. 1 is rejected. 14 to 27. [These paras are not reproduced here as they involve minor issues.] 28. For foregoing reasons, appeal filed by revenue stands dismissed. *** INCOME TAX OFFICER v. LIONEL EDWARDS LTD.