TMI Blog2014 (12) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... AO came to the correct conclusion that real rental value was bifurcated into two separate income viz., one is rental income of house property and another is hire charges of the equipment. No precise test can be laid out to ascertain whether income referred to by whatever nomenclature, lease amount, rent or licence fee received by an assessee from leasing or letting out of assets would fall under the head ‘profit 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 - the intention of the assessee has to be seen as to whether the letting was the doing of a business or to exploitation of his property by an owner - The assessee when exploited the property to derive rental income it has to be held that the income realized by him by way of rental income from a building if the property with other asset attached to the building to be assessed as ‘income from house property’ only - the rental would not have been realized but for the letting out of the machinery, plant or furniture along with such building and therefore, renta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the return of income filed for the impugned assessment year, assessee offered the rental income under the head house property whereas income received towards amenities was shown as business income and assessee also claimed deduction towards interest expenditure and depreciation from such business income. The AO, however, rejecting assessee s claim treated the entire amount received from leasing of building to M/s Satyam Computers as income from house property and accordingly completed the assessment. Being aggrieved of the assessment order, so passed, assessee preferred appeal before CIT(A). 5. During the appeal hearing before ld. CIT(A), assessee relying upon a decision of the ITAT, Hyderabad Bench in case of Lulla Brothers Trust Vs. ACIT in ITA Nos. 528/Hyd/2005 dated 07/03/2008 tried to make out a case that amount received towards amenities should be treated as business income. However, ld. CIT(A) taking note of the fact that while considering identical nature of dispute in assessee s own case for AYs 2005-06 and 2006-07 in ITA Nos. 67 to 70/Hyd/2010 dated 30/04/2010, ITAT has held that assessee as the owner of the building was only exploiting the property by letting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecided on its own facts and as such, we have to see the facts of the present case. As we have gone through the entire facts of the case and also agreement entered between the parties i.e. the Rent agreement and also we have gone through various items given on hire charges to the tenants. We have also gone through the amenities provided to the tenants. 9. The annual rent in a case when the property is let through out the year is the actual rent received or receivable by the owner. When the amount of the actual rent received or receivable by the owner, is known that would constitute the basis for determining the annual value and it is that value which will have to form the basis for determining the income from house property and for allowing deduction from income from house property to the extent is permitted under the other provisions of the Act. In the present case, the assessee made two agreements one for let out of the property and another for providing amenities and there is a doubt in the mind of the assessing officer regarding the correctness of the income declared by the assessee as income from house property and income from business. He has treated the entire income i.e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be applicable and the income from building should be assessed under the head other sources . But according to the fact arising in the present case, plant and machinery or furniture was not hired by the assessee along with the building. Therefore, the decision of the apex court in Sultan Bros case supra, will not be applicable to the facts of the present case. Thus, on a plain reading of sec.56(2) (iii) of the Act, in the light of the facts of the case, we hold that conclusion reached by the CIT(A) is not correct. Further, no precise test can be laid out to ascertain whether income referred to by whatever nomenclature, lease amount, rent or licence fee received by an assessee from leasing or letting out of assets would fall under the head profit 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. The ratio laid down by one case cannot be applied or fit to the facts of the present case. We have to see the intention of the assessee whether the letting was the doing of a business or to exploitation of his property by an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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