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2013 (12) TMI 66 - AT - Income TaxIncome from letting out of fit outs - Held that:- The fit out rent was earned from letting various facilities such as interiors, furniture and fixtures, electrical fittings etc. - The fit outs form an integral part of the structure owned by the assessee - Following Addl. CIT v. Hindustan Machine Tools Ltd [1979 (6) TMI 27 - KARNATAKA High Court] - The intention of the parties in entering into the lease transaction - It is not the number of agreements which are entered into between the parties which is decisive in determining the nature of transaction - The object is to enjoy the entire property viz., building furniture and the accessories as a whole which is necessary for carrying on the business, then the income derived there from cannot be separated based on the separate agreement entered into between the parties. What has to be seen is, what was the primary object of the assessee while exploiting the property. If it is found applying such principle that the intention is for letting out the property or any portion thereof, the same may be considered as rental income or income from properties. In case, if it is found that the main intention is to exploit immovable property by way of complex commercial activities, in that event it must be held as business income - The income derived from letting out the out-fits, fixtures, furniture etc., is not chargeable under the head 'income from house property' - Decided in favour of assessee. Maintenance charges - Held that:- Following CIT v. Model Manufacturing Co. P. Ltd [1984 (12) TMI 29 - CALCUTTA High Court] - The services rendered by the assessee in providing electricity, use of lifts, supply of water, maintenance of staircases and watch and ward facilities to the tenants constituted separate activities distinct from the letting out of the property and were not incidental to such letting out. It was further held 'that the service charges realised by the assessee were not part and parcel of income derived from house property assessable under section 22 of the Act and that they were assessable under the head 'income from other sources' - Decided in favour of assessee. Professional charges - Held that:- The CIT (A) on its part has not discussed the facts of the case in detail for deleting the additions made by the Assessing Officer - The issue is restored for fresh adjudication. Interest - Held that:- The Assessing Officer has not given any reason while disallowing the expenditure claimed by the assessee - The CIT (A) has merely narrated that the above said expenses are business expenditure and the same is to be allowed - The facts of the issue was not considered either by the Assessing Officer or by the CIT (A) - The issue is restored for fresh adjudication. Rent to guest house - Held that:- The CIT (A) has allowed the relief to the assessee without passing a speaking order and without appreciating the applicability of the provisions of section u/s 40A(2) - The issue is restored for fresh adjudication.
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