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2007 (8) TMI 488 - AT - Income TaxReopening of assessment u/s 147 on the basis of change of opinion is justified or not - Income escaping assessment - Rent received - Income from other sources vs Income from house property - HELD THAT:- In the present case also, the assessee has made full disclosure regarding its income. The particulars of the property have also been furnished. The Assessing Officer has not come across any new material. The assessment was completed u/s 143(1). In such circumstances, it is not possible to hold the view that the income escaping assessment is always justified in a case where the assessment was made u/s 143(1) and not u/s 143(3). As there is no fresh material with the Assessing Authority, it is to be seen that the assessment was reopened on the basis of a change of opinion of the Assessing Authority. Therefore, in the light of the decision of Madras High Court in the case of Bapalal & Co. Exports [2006 (9) TMI 86 - MADRAS HIGH COURT], we find that the impugned income escaping assessment is bad in law. Therefore, it is to be set aside. The assessee is successful in its appeal for the assessment year 2000-01. Rent received form residential Apartment - Taxable under the head "income from house property" Or "Income from business"- HELD THAT:- In the present case, the property of the assessee is a simple and pure residential apartment. The assessee has provided window air-conditioner. Furnitures also have been given. In other words, what is let out by the assessee is a furnished apartment. The furnishings provided by the assessee by way of window air-conditioner and furniture do not change the character of the asset from that of house property to that of business asset. The assessee is not carrying on any business by way of letting out the residential property. Moreover, it is also to be held that the property does not cease to be house property only for the reason that assessee has provided air-conditioners and furniture in the residential apartment. The reliance placed by the assessee on clause (iii) sub-section (2) of section 56 is also not convincing. The law provides therein that hire charges should be treated as income from other sources in such circumstances where machinery, plant or furniture belonging to an assessee with or without buildings have been let out. It is also there that the buildings are inseparable from the machinery, plant or furniture hired by the assessee. The emphasis in the said sub-section is not on the building as in the nature of a house property. The sub-section is lead by hiring machinery, plant or furniture and not by letting out of house property or building. The term "buildings" needs to be read in the overwhelming company of hiring of machinery, plant or furniture. Therefore, we find that the revenue is right in assessing the income as house property income. The assessee fails in its appeal for assessment year 2001-02. In result, the appeal filed by the assessee for assessment year 2000-01 is allowed the appeal for the assessment year 2001-02 is dismissed.
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