9911796707
TMI Blog1997 (8) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... burden of proving the identity as well as capacity of the depositor. The Assessing Officer is, therefore, directed to delete the addition of Rs. 9,100. 1.3 The loan of Rs. 10,100 was received by the assessee from one Shri L.D. Sachdeva, Chartered Accountant. His statement was also recorded by the Assessing Officer on 7-8-1989. In the said statement, Shri L.D. Sachdeva has clearly confirmed the fact of having advanced the aforesaid loan. He has also stated that a house was constructed by him during the period from February 1985 to June 1987 which cost a sum of Rs. 70,000. He has also disclosed the sources of his income. He had purchased a Maruti in January 1989. All these facts stated in the affidavit and the statement clearly reveal that Shri L.D. Sachdeva was a man of means. He has confirmed the fact of having advanced the loan. Hence, there is no justification for sustaining the said addition of Rs. 10,100. The Assessing Officer is directed to delete the same. 2. In ground No. 2, the assessee has challenged the finding given by the CIT(A) holding that the rental income received by the assessee from the leasing out of factory godowns and industrial sheds is assessable as income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Balaji Enterprises v. CIT [1997] 225 ITR 471 in which it was, inter alia, held that such a question has to be considered on the basis of determination of the facts as to whether the firm had carried on such activity as a business activity and they were merely receiving the rent only as owners of the properties. He submitted that emphasis has to be laid on the nature of activity and it should be found whether such an activity was a business activity or was merely an activity of receiving the rent as owners of the properties. In the present case, the assessee has derived such income from a business activity. It is, however, observed from the said judgment that it was a case where the assessee had taken certain property on lease and constructed building thereon and leased out to various tenants. The Hon'ble High Court in the said judgment at page 747 has specifically observed that there is no finding by the Tribunal that the assessee is the owner of the property. In the present case, the assessee is the owner of the property from which rental income has been derived. The aforesaid judgment is, therefore, clearly distinguishable on facts. 2.3 The learned counsel also rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aforesaid judgment. In that case, the limited company was the owner of a certain building constructed on plot No. 7 on the Church Gate in Bombay, in which furnitures and fixtures were also fitted up for being run as a hotel. The company let out the said building fully equipped and furnished to one Voyantizis for a term of six years for running a hotel and for certain other ancilliary purposes. On these facts, it was held that as the assessee and the lessee intended that the building and the furniture and fixtures were to be used for one purpose, namely, for the purposes of running a hotel altogether, and not one separately from the other, notwithstanding that the sums payable for their enjoyment were fixed separately, the lease satisfy all the conditions for the applicability of section 12(4) and the rent from the building had to be computed under section 12 after providing for the allowances mentioned in section 12(4) and section 9 did not apply. The Hon'ble Supreme Court at page 358 of Sultan Bros. (P.) Ltd.'s case in the said judgment has observed that whether a particular letting is business has to be decided on the circumstances in each case. Each case has to be looked on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax under the head 'Income from property'. Such a view is fully fortified by the judgment of the Hon'ble Supreme Court in the case of East India Housing & Land Development Trust Ltd. v. CIT [1961] 42 ITR 49. The Head note of the said judgment is reproduced hereunder : "The appellant-company, which was incorporated with the objects of buying and developing landed properties and promoting and developing markets, purchased 10 bighas of land in the town of Calcutta and set up a market therein. The question was whether the income realised from the tenants of the shops and stalls was liable to be taxed as 'business income' under section 10 of the Income-tax Act or as income from property under section 9 : Held, that the income derived by the company from shops and stalls was income received from property and fell under the specific head described in section 9. The character of that income was not altered because it was received by a company formed with the object of developing and setting up markets. Nor because of the fact that the company was required to obtain a licence from the Calcutta Municipality to maintain sanitary and other services and for that purpose has to maintain a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that such income is assessable under the head 'Income from house property'. 2.10 We will now consider the assessee's claim with regard to grant of deduction in respect of the various expenses claimed by the assessee. The assessee claimed deduction of Rs. 55,552 on account of building repairs and security service charges. No separate deduction can be allowed in respect of repairs, as the Assessing Officer had already allowed deduction of 1/6th for repairs as provided in section 24 of the Income-tax Act, 1961. The assessee's claim of Rs. 55,552 on account of building repairs and security service charges includes a sum of Rs. 30,012 incurred by way of security service charges. This amount of security service charges of Rs. 30,012 spent by the assessee should be deducted out of the gross rent of Rs. 2,72,707 received by the assessee. It is true that no such deduction is specifically provided in section 24 of the Income-tax Act, 1961. However, deduction in respect of security service charges paid by the assessee will be deductible while computing the annual value under section 23 of Income-tax Act, 1961. Section 23 provides that the annual value of any property shall be the same which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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