TMI Blog2000 (12) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned Assessing Officer after considering the lease deed and rent agreement, came to the conclusion that the income was chargeable under the head "Income from house property'. Aggrieved thereby, the assessee agitated the matter before the first appellate authority, who also confirmed the action of the Assessing Officer on this count. 2. The learned counsel for the assessee assailed the impugned order from various angles. It was submitted that the assessee was not the owner of the property as the shed (hereinafter called the property) was built on a lease hold land which was acquired only for IO years. Referring to the clause 5 of the lease deed, the learned counsel stated that at the expiry of the said term the assessee was bound to return the said premises alongwith all the buildings constructed thereon to the landlord without removing any of these structures or shed building etc. constructed on the premises. Since the property was not an asset of the assessee, the learned counsel claimed that the provisions of section 22 could not be invoked because this section refers to the properties of which the assessee is owner. That apart, the learned counsel contended that what w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property'. 7. On the other hand, the learned DR forcefully supported the order passed by the first appellate authority. Referring to the relevant portion of the order of the first appellate authority, the learned DR pleaded that there was no case for taxing the income from the property in question under the head "business income' and the learned CIT (Appeals) was justified in taxing it under the head 'income from house property'. 8. We have considered the rival submissions in the fight of the material placed before us and precedents relied upon. The only question, which falls for our consideration in relation to this issue is that whether the income earned from the let out of the property in question is to be taxed under the head "business income' or 'Income from house property'. In order to appreciate the controversy at hand, it is relevant to take note of the provisions of section 22 of the Act which reads as under: 'The annual value of property consisting of any buildings or lands appurtenant thereto of which the assessee is the owner, other than such portions of such property as he may occupy for the purposes of any business or profession carried on by him the profits of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown by it in its balance sheet under the head 'buildings' and also depreciation under section 32 has been claimed thereon, The other interesting aspect which is seen from the record is that as per the terms of the lease deed, the lease was granted only for a period of 10 years starting from 27-4-1984 and according to clause 5, the assessee tenant was to deliver the said premises alongwith all the buildings constructed thereon to the landlord. It means that this lease deed was effective only upto 26th day of April, 1994. But from the details filed by the assessee in its paper book at index page 3, it is claimed that upto the assessment year 1998-99, the income from the said property is being shown as 'business income" and the same is also assessed as "business income'. On a specific query raised from the Bench, it was submitted by the learned counsel of the assessee that till today the said property was in occupation of the assessee and it was deriving income from its letting. We fail to see that if the lease deed was to expire in 1994 and as per terms of clause 5, the assessee was bound to deliver the said premises alongwith the building constructed thereon to the landlord, how t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee that it was regularly engaged in the business of letting out of the properties. That being the case, the solitary transaction of giving the said property on rent cannot constitute assessee's business and thereby the rent received therefrom cannot constitute its business income. 12. That apart the summit court in the case of S.G. Mercantile Corpn. (P.) Ltd. v. CIT [1972] 83 ITR 700, has held as under: 'The liability to tax under section 9 of the Income-tax Act, 1922 is of the owner of the buildings or land appurtenant thereto. In case the assessee is the owner of the buildings or lands appurtenant thereto, he would be liable to pay tax under section 9 even if the object of the assessee in purchasing the landed property was to promote and develop a market thereon. It would also make no difference if the assessee was a company which had been incorporated with the object of the buying and developing landed properties and promoting and setting up markets thereon.' 13. In the like manner, the Apex Court in the case of East India Housing Land Development Trust Ltd. v. CIT [1961] ]42 ITR 49 has laid down as under : 'Held, that the income derived by the company from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (SC) and ITO v. Murlidhar Bhagwan Das [1964] 52 ITR 335 (SC) has reiterated that principle of res judicata is not binding. Even otherwise, it is well settled that there is no estoppel against a statute. The Hon'ble Delhi High Court in the case of CWTV. Meattes (P.) Ltd. [1985] 156 ITR 569 has laid down that if wrong view has been taken in one year, the Assessing Officer cannot be estopped from taking a correct view later on. 17. Considering all the facts as stated above, we confirm the action of the first appellate authority on this issue. 18. The assessee -is further aggrieved by the findings of the first appellate authority on the sustenance of the disallowances made on account of various expenses incurred for the purposes of its business. It is the case of the assessee that some of the expenses incurred by it were relatable to its business activity and were accordingly allowable, more particularly, when the assessee was carrying on other business activities also. It is noted that the CIT (Appeals) has not dealt with the claim of the assessee in elaboration. It is evident from the assessment order that the assessee was also engaged in business of the import and export, which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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