Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (9) TMI 159 - AT - Income TaxDeemed owner u/s.22 - rental income - income from house property - Held that:- Applying the tests to the facts of the present case, especially in the light of clause-2 and 7 of the leave and license agreement, we have no hesitation in coming to the conclusion that on the facts of the present case the assessee was only licencee of the premises owned by M/s. East India Hotels Ltd., and the parties intended it to be license and the agreement did not create an interest in the property owned by the licensor and that the licensee did not have exclusive possession of the property. As a licensee it had granted sub-licence to various parties and derived income there from. Once we come to the conclusion that the Assessee is only a licencee, then it can safely be said that the provisions of Sec.22 read with Sec.27(iiib) of the Act are not attracted and hence the income in question cannot be assessed under the head “Income from House Property”. Similarly even for A.Y.2007-08, the consideration received by the Assessee as licensor from the sub-licensee, comprised of licence fees and service fee and air condition fees. Keeping in mind the objects of the assessee and keeping in mind the facts and circumstances of the present case, it can be safely concluded that the assessee carried on a systematic and regular activity in the nature of business and therefore the income from granting the premises on sub-license was to be assessed under the head income from business. The latest judicial pronouncement in the case of Chennai Properties and Investments Ltd. Vs CIT (2015 (5) TMI 46 - SUPREME COURT) was not available for consideration before the Tribunal when the Tribunal passed its order in the case of another group company based on which the CIT(A) confirmed the action of AO. With the change under law laid down by the Hon’ble Supreme Court, we are of the view that the income in question has to be assessed under the head income from house property. In view of the decision of the Hon’ble Supreme Court in the case of Chennai Properties and Investments Ltd. (supra), we are of the view that the question whether the Assessee is a deemed owner u/s.22 read with Sec.27(iiib) of the Act, no longer assumes importance. For the reasons given above we allow the appeals of the assessee.
|