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2015 (2) TMI 1305 - ITAT AHMEDABADIncome from House Property OR busniss income - rental income from let out of “premises only” - HELD THAT:- A bare reading of the lease agreement between the assessee-firm and “VCPL” shows that the rent was charged by the assessee-firm only for the “premises” as provided in the lease agreement. Providing of electrical panel and space for generator could not be said to be a separate service or asset and in fact no separate rent is charged for the same. We find that there was no provision of any services to be provided by the assessee to the “VCPL” or to the partner of the assessee-firm in the upper floor. CIT(A) has recorded in his appellate order that the value of the building was shown at ₹ 3.86 crores whereas the value of the furniture and fixtures is of ₹ 87,226/- only, which are of insignificant value vis-ŕ-vis value of the building. We are of the view that in the absence of any facilities or business infrastructure provided by the assessee-firm to its lessee, rental income from let out of “premises only” was rightly taxed by the department under the head “Income from House Property” and no interference in the order of the CIT(A) on this issue is called for, which is confirmed and the ground of the appeal on this issue is dismissed. Determination of the notional value of the second floor to fifth floor of the building let out to one of the partners of the assessee-firm, who runs a hotel business - HELD THAT:- Allowance of deduction at 10% per higher floor from the bottom ground and first floor of the property, was on the lower side, and that upper second floor to fifth floor not having any hall type construction to suit for commercial use for any departmental stores etc., and construction of building consisted of small rooms only and the claim of the assessee that covered area on the higher floors were less as compared to the ground and first floor of the property, and also considering the undisputed fact that the partner of the assessee-firm, who is running a hotel “Sudarshan Palace” business has advanced deposit of ₹ 1.63 crores to the assessee-firm without charging any interest, we are of the view that the ends of justice shall be met, if the rental value of second floor to fifth floor of the property used for hotel business is determined at ₹ 30.00 lakhs per annum for the relevant year, as against ₹ 49.95 lakhs determined by the AO, and after allowing ₹ 2 lakhs for municipal tax paid by the assessee, and also 30% of the annual value of the property, the income from second floor to fifth floor of the property let out to M/s.Sudarshan Palace, should be assessed at ₹ 19.00 lakhs as against ₹ 32,96,882/- assessed by the AO and the grounds of the appeal of the assessee, on this issue, are partly allowed.
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