TMI Blog2005 (7) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... s in brief are that the assessee is a partnership firm carrying on business as "dealers and investors in properties and giving the same on rent". For the years under consideration, the assessee-firm has shown a receipt of Rs. 5,04,120 by way of rent on letting out the premises as Vapi to Central Excise Department in each year. This amount of Rs. 5,04,120 was credited to profit and loss account against which, depreciation, office expenses and interest on partner s capital were debited to profit and loss account and net loss of Rs. 11,215 is worked out and shown in the return of income for the assessment years 1998-99 and 1990-2000, respectively. The Assessing Officer taxed the rent receipt under the head "Income from house property" for both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this, reliance is placed on the provisions contained in section 27 of the I.T. Act, which provides that under certain circumstances, though legally and technically the assessee may not be owner of the property, still the assessee would be treated as owner of the property for the purpose of assessment in respect of the house property income under section 22. One of such cases is that the lease of a property where the lease is not more than one shall be deemed to be the owner of the property for the purpose of section 22, as provided under clause ( iiib ). The relevant provisions of section 27 are as under :- "27. For the purposes of sections 22 to 26 ( i )to ( iii ) ****** ( iiib )a person who acquires any rights (excluding any r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 27 then the bracketed portion of the clause will become redundant and by rule of interpretation such interpretation cannot be made which makes a particular portion of the section redundant. As such one will have to give effect to the bracketed portion of the section where the exclusion is of a lease for a period of less than one year. As such, one may refer to section 269UA for considering the nature of the transaction and for the period of the transaction one will have to confine to section 27 itself. As such, a lessee who is a lessee for a period of more than one year under the provisions of section 27 read with section 22 will be the deemed to be owner of the property. Now, one the lessee is deemed to be the owner for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom business". 8. On the other hand, the ld. D.R. appearing for the revenue, supported the orders of the authorities below. He further relied on the decision of the ITAT Mumbai Bench E in the case of Dy. CIT v. Godrej Properties Investments Ltd. [2005] 93 ITD 308 therein, it is held that in case of owner of the property, rental income received by it was assessable only under the head "Income from house property and the assessee could claim only such deduction as were permissible under sections 22 to 27, which do not make any provision to allow depreciation out of rental income. The ld. D.R. submitted that the assessee is the owner and not Government of India. From the perusal of the lease deed, it is clear that the assessee is th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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