This is appeal by Revenue which is directed against order of AAC by which he has deleted Rs. 25,000 taxed by ITO as notional income from house property. ITO in assessment order noted that assessee was assessed as HUF and no account was maintained. assessee has shown in return only share of profit from firm M/s Hotel Saluja-Cum-Bar, Siliguri. ITO asked assessee as to why no annual value of property used by firm should not be charged in hands of assessee as income form house property on notional basis. assessee submitted that s. 22 provides that annual value of property used by assessee as owner for purpose of any business or profession carried on by him, profit of which is assessable to income-tax shall be charged to income-tax under head income from house property . ITO noted that contention of assessee cannot be accepted as firm in which assessee was partner, was separate entity and it cannot be said that assessee HUF occupied property for purpose of its business. He pointed out that property was used for purpose for purpose of business carried on by firm and not by assessee itself, and, therefore annual value of property was assessable in hands of assessee under s. 23 (1) (a). He considered transfer of similar properties in town and rent paid for similar properties and computed annual value of said property at Rs. 30,000, i.e., at rate of Rs. 2,500 per month. building used as hotel by firm had twenty rooms in addition to guest room, restaurant halls etc. He also pointed out that municipal tax was paid by firm and, therefore, no deduction was to be allowed in hands of assessee. He computed annual value of property after allowing 1/6th for repair which worked out to Rs. 25,000 for whole year. assessee s share of profit as per allocation stood at Rs. 40,524. assessee took up matter before AAC raising similar contentions that when property was in occupation of he owner for purpose of business or profession carried on by him, annual value of such properties would not be chargeable to tax under head income from house property. Reliance was placed on decision of Hon ble Supreme Court of India in case of CIT vs. Ramniklal Kothari (1969) 74 ITR 57 (SC) not 232 as noted in impugned order. Reliance was also placed on decision of Hon ble Gujarat High Court in case of CIT vs. Rasiklal Balabhai (1979) 9 CTR (Guj) 116: (1979) 119 ITR 303 (Guj), which AAC considered to be conclusive on point of controversy. He noted that two conditions are laid down for exemption under s. 22,i.e., owner may occupy property for purpose of any business or profession carried on by him and that profits of which were chargeable to tax. According to AAC, assessee fulfilled these conditions in view of above two decision relied on by assessee. He was of view that business carried on by partner in firm constituted his own business and, therefore, purview of s. 22 cannot be stretched in such cases. He also reproduced commentary made at p.7 of 3rd. Edition Vol. I o f Chaturvedi & Pithisaria. He concluded that above amount added as notional income from house property cannot be sustained. Hence, this appeal by Revenue. It is submitted on behalf of Revenue that AAC was not justified in coming to above conclusion in spite of fact that it was assessee who was partner of firm and owner of property and that allowed property to be used by firm, whilst retaining ownership exclusively with partner itself. According to ld. Departmental Representative, case laws relied on by assessee have been wrongly applied by AAC in present facts. It is urged that AAC went wrong to say that business carried no by assessee. He also refers to decision of Hon ble Calcutta High Court in case of Sarvamangala Properties Ltd vs. CIT 91973) 90 ITR 267 (Cal) in which it was held that firm is entity known to law and is capable of acquiring and owning property and that 9(3) of old IT Act would not apply to case of property owned by firm and it is not partners of firm who have to be taxed on income of firm owned by firm. It is submitted that in present case, assessee partner is absolute owner of property and, therefore, income from that property was assessable in hands of assessee partner it self and that it is not correct for AAC to conclude that business carried on by firm constituted as business carried on by assessee partner. It is urged that partnership deed by which property was allowed be sued by firm clearly shown that ownership remains and continues to be so with assessee partner. That apart, it is urged that assessee has shown said property as him own property in balance sheet. It is also pointed out that running expenses only like municipal taxes etc., were borne by firm as property was utilised by said firm, which fact would not alter position that ownership was all along with assessee partner. He also refers to provisions of s. 24 (1) (vii). It is submitted, therefore, that order of AAC on facts of case may be reversed and that of ITO may be restored. assessee s Ld. counsel supports order of AAC while stressing ratio of decision relied in by him before AAC in particular, it is urged that business carried on by firm was actually business carried on by assessee partner itself and, therefore, exemption allowed by AAC was quite justified and valid. It is stated that hotel business was there earlier and on partition, assessee received hotel premises as share. It is pointed out that assessee took one partner Shri Gurujit Sing who provided finance for carrying on hotel premises. It is also urged that even if notional income had to be assessed in hands of assessee partner, then such rental income in hands of assessee partner, would also constitute business expenditure in hands of firm and same should be allowed. In this connection he refers to provisions of s. 67(2) of IT Act. According to him, said property was commercial asset used for purpose of business and, therefore, ACC has rightly deleted amount. He also refers to Balance Sheet of firm to show that assessee partner had debit balance in order to stress his arguments that there was no justification for making addition on account of notional income from said property. He relied very kly on decision in Gujarat case as pointed out earlier. It is urged that there was no quarrel in respect of ownership point and that in allocation of profit made consequential to assessment order, there was no change in income allocated partners. He also referred to decision of Hon ble Calcutta High Court in case of CIT vs. Premchand Jute Mills Ltd. (1978) 114 ITR 769 (Cal) in which on facts of that case, it was held that exploitation of commercial asset does not necessarily mean exploitation by assessee himself at all material times and that property was leased out as business asset, income therefrom would be treated as income from business. It is submitted, therefore, that on whole order of ACC suffers from no infirmity and same may be sustained. It is also urged that in past for asst. yr. 1978-79, Department accepted position and municipal tax paid by firm was also allowed and, therefore, there is no merit in present appeal by Revenue. In reply, ld. Departmental Representative submits that in taxation, there is no estoppel and that paying of municipal tax by firm would not convert property owned by assessee as property of firm. It is also urged that in case of premchand Jute Mills. facts and context of matter were different and, therefore, ratio of that decision cannot be applied to facts of present case. We have heard both sides and have perused orders of authorities below for our consideration. We have also gone through orders as relied on by both sides. We have also perused copy of agreement dt. 11th Oct., 1977, by which assessee as first party expressed him desire to make addition and extension to his building used as Hotel Saluja-cum-Bar, Siliguri and that he was not capable to invest capital in partnership firm and he cannot afford any finance. At same time, he would be busy in supervising construction work and would not be able to give his personal skill to manage business. second partner Shri Gurmit Singh would provide finance on which no interest would be paid and no salary was also to be paid to him for skill and labour given in management and in running of business. It was also stipulated that building of first party shall be utilised fully for purpose of partnership business and that first party shall not be entitled to any rent or remuneration for use of said building and that firm shall pay expenses like municipal tax, while washing expenses, wear and tear etc. Thus, we are to ascertain intention of parties concerned before applying ratio of any decision. It is seen that assessee was owner of that building which he obtained on partition of family. But due to his financial difficulty coupled by his desire to make addition and alteration in construction, agreement was reached with second part on terms as construction, agreement was reached with second part on terms as specified in said agreement. said agreement indicates fully that ownership continues with assessee and there was no transfer at all. In fact, it cannot be said that assessee partner has brought this property as his capital contribution to firm. Actually it has been pointed out before us that this partner has got debit balance as reflected in Balance Sheet of firm. One thing is clear and, that is, assessee in fact allowed firm to utilise said property for purpose of partnership business. Of course, there is no necessity for effecting transfer by assessee in respect of immovable property, as his capital contribution to firm, as firm itself being legal entity can also own property and on such income, firm would be liable to pay tax on property owned by it. For this, we may refer to decision of Hon ble Punjab & Haryana High Court in case of Pearl Woollen Mills vs. CIT (1980) 14 CTR (P & H) 199: (1980) 123 ITR 658 (P & H). In fact, Supreme Court of India in case of S. G. Mercantile Corporation (P) Ltd. vs. CIT 1972 CTR (SC) 8: (1972) 83 ITR 700 (SC) on facts of that case held that since assessee company was not owner of property, there was no question of making assessment under s. 9 of old Act as liability to tax was of owner of buildings. In present case, owner of buildings was and continues to be in hands of assessee. In case of CIT vs. Ganga Properties Ltd. (1970) 77 ITR 637 (Cal) Hon ble Calcutta High Court has also observed that income from property used in s. 6 and s. 9 of old IT Act refer to income of legal owner of property who is only person assessable on basis of bona fide annual value thereof. As indicated earlier, assessee relied on decision in case of Ramniklal Kothari (supra). In our opinion, facts of present case are distinguishable. In fact, text and back-ground in decided case above, were completely different and that question before Hon ble Supreme Court was materially different. In that case, business was carried on by firm and profits were considered to have been earned by all partners in carrying on business and share of partner is business income for purpose of s. 10 of old Act and being business income, expenditure necessary for earning that income would be liable. In our opinion, ratio of decision in case of Ramniklal Kothari was wrongly applied by AAC to facts of present case. Hon ble Supreme Court of India in case of R. B. Jodha Mal Kuthiala vs. CIT (1971) 82 ITR 571 (SC) on facts of that case held that for purpose of s. 9 of old Income-tax owner must be person who exercises rights of owner, not on behalf of owner, but in his own right. Here in present case before us, it is assessee partner who is owner who can exercise right of owner as such and not any one on his behalf. assessee also relied on decision in case of CIT vs. K. N. Guruswamy (1984) 41 CTR (Kar) 303: (1984) 146 ITR 35 (Kar). It was held in that Karnataka case that s. 22 of IT Act, 1961 clearly lays down that it is owner of house property who is liable to tax under head income from house property unless house property is used by him for purpose of his own business or profession and that this section which provides for exemption, should be strictly construed and that only owner can claim for exemption. It was also held that occupation of property in this context must mean "occupation as owner or his own occupation" . It was also held that if property owned by assessee being partner of firm was used for business of firm, notional income form house property was includible in income of partner. Hon ble Karnataka High Court dissented from decision in case of Rasiklal Balabhai (supra) and applied decision of Hon ble Calcutta High Court in case of Sarbamangal Properties Ltd. (supra). In our opinion, by agreement dt. 11th Oct., 1977, assessee did not transfer in any way or in any form to firm in respect of house property owned by him and there was no sale or any divesting of all rights of ownership by assessee partner to firm and assessee, therefore, remained legal owner of property and was assessable as such. Having regard to facts of case and findings of authorities below and submissions made before us and having terms of agreement made by assessee as indicated earlier and decisions discussed briefly above, we are of opinion that ITO was justified in assessing notional income in respect of house property owned by assessee although said property was utilised by firm, keeping in view ratio of decision in case of R. N. Gurusway (supra). From materials available it is seen further that there was no intention of assessee partner to part with ownership of property and in fact nothing was done to divest ownership right by assessee partner in favour of firm and that same property has not been brought as capital contribution to firm. There is k force in submission made on behalf of Revenue that mere paying of municipal taxes, repairing charges etc. by firm will not alter legal position. Before we part with matter, we would meet contention of assessee, when he says that past record of case is to be followed and, therefore, ITO should not be allowed to be inconsistent in his approach. It has no force in view of fact that principles of estoppel and res judicata is not applicable to taxation matters. On totality of facts of case, it is applicable, We reject contention of learned representative in this view of matter. In view of what we have discussed above, we are of opinion that AAC went wrong in deleting addition of Rs. 25,000 added in assessment order. Accordingly, we reverse his order and restore that of ITO. In result, appeal by Revenue is allowed. *** INCOME TAX OFFICER v. SURJIT SINGH