TMI Blog2013 (12) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... ory deduction u/s 24(a) - In all the earlier years the entire rental income from this property based on these agreements has been considered as income from house property - Following Radhasoami Satsang Vs. CIT [1991 (11) TMI 2 - SUPREME Court] - When facts and circumstances being same the revenue should not deviate and adopt contrary view unless there are extra ordinary circumstances - Decided against Revenue. - ITA No. 3874/Del/2011 - - - Dated:- 11-10-2013 - R P Tolani And Shamim Yahya, JJ. For the Appellant : Ms Vanita R Sharma, DR For the Respondent : Shri Yogesh Aggarwal, CA ORDER:- PER : R P Tolani This is Revenue s appeal against CIT(A) s order dated 22-6-2011 relating to A.Y. 2008-09. Sole effective ground raised is as under: "On the facts and in the circumstances of the case and in law, the learned CIT(Appeals) has erred in directing the A.O. to treat income from house property at Rs. 76,40,161/- as against Rs. 30,93,639/- assessed." 2. Brief facts are: The assessee claimed to have earned gross rental receipts of Rs. 1,07,3,800/- from Max New York Life Insurance Co. Ltd. During the course of assessment it was found by assessing officer that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k to the total income of the assessee company." 2.2. Aggrieved, assessee preferred first appeal, challenging that all the five agreements constitute a composite transaction for letting out of one house property along with amenities therein and the remaining amount of Rs. 76,40,161/- should also be allowed as income from house property and deduction u/s 24(a) should be allowed. 2.3. Alternatively, it was prayed that the depreciation and other expenditure incurred by the assessee for earning the alleged income from other sources out of rental income should also be allowed. 2.4. CIT(A) allowed the main claim of the assessee by observing as under: "(b) Regarding the income of Rs.7,57,626/- on account of renting out car parking spaces I am of the considered view that car parking spaces are part and parcel of the property and the annual value thereof will fall under the head "Income from house property"; (c) Regarding the incomes of Rs.19,06,692/- and Rs.26,89,572/- appearing in columns (d) and (e) respectively in para 3.4 above, I am of the opinion that the high end air conditioning plant, lift, water supply with power back up, fittings, furnishings and fixtures like woo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and gains of business or profession' and it has to be determined from the point of view of a businessman in that business depending upon the fact and circumstances of each case and there is no readymade jacket formula. One has to see the intention of the assessee whether the letting was the doing of a business or to exploitation of his property by an owner. The assessee exploited the derive rental income it has to be held that the income realized by him by way rental income from a building if the property with other assets attached to the building to be assessed as 'income from house property' only. The only exceptions are cases where the letting of the building is inseparable from letting of the machinery, plant and furniture. In such cases, it has to be held that the rental would not have been realized but for the letting out of the machinery, plant or furniture along with such building and therefore, rental received for the building is to be assessed under the head 'Income from other sources'. In the present case, on the facts of the case, it is clear that the assessee as the owner of the building was only exploiting the property as owner by letting out the same and realizing in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement are clear and unambiguous by which the appellant has allowed the licensee to enjoy the said property upon payment of comprehensive monthly rent. By the aid agreement, the prime object of the assessee was to let out the said property with various rights to use the facility attached o the aid property. Composite rental income was charged covering all the facilities. Thus, the main intention was to let out the property on rent rather than exploitation of property by way of complex commercial activity. The rental income was, therefore, assessable as income from house property. Reliance 1S also placed on the decision of CIT v. Bhaktawar Construction (P.) Ltd. [19861162 ITR 452/27 Taxman 7 (Bom), in which building along with centrally air-conditioning facility was let out and income was treated as income from house property. The decision of ITAT Delhi Bench 'A' in the case of Neelam Cable Mfg. Co. v. Asstt. CIT [19971 63 ITD 1 (Delhi) is relied upon in which the Tribunal after concluding that predominant object of giving property was to derive income by way of rent, held that rental income so received was concluded as assessable under the head "Income from house property". In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not applicable for rent of car parking and other facilities. The five agreements were executed to demarcate the individual agreement which was liable for ratable purposes for levy of municipal taxes on house property the remaining four agreements had nothing to do with ratability. This arrangement which is permissible in law cannot be held against the assessee so as to convert other equipments and facilities which are integral part for the enjoyment of the house property as divorced from letting out of property. The components have been considered by various courts as part and parcel of house property and income there from has been held as liable to be treated as income from house property. CIT(A) has rightly relied on the decision of Hon ble Supreme Court in the case of Shambhu Investment (P) Ltd. (supra). 5. We have heard rival contentions and perused the material available on record. In our considered view what is to be seen is whether the property and amenities let out by the assessee together constitute letting out of property with amenities and income there from payable under the head "house property income" or not. The treatment of an income under the head "house proper ..... X X X X Extracts X X X X X X X X Extracts X X X X
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