TMI Blog2007 (6) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... eived from the tenants was assessable as house property income and not as business income. ( ii )CIT(A) was not justified in upholding the order of the Assessing Officer estimating the rental income at Rs. 24 lakhs against the rental income of Rs. 12.84 lakhs received by the assessee. ( iii ) CIT(A) was not justified in confirming the charge of interest under sections 234B and 234D and withdrawal of interest under section 244A and also in confirming the initiation of penalty processing by the Assessing Officer under section 271(1)( c ). 2. The assessee-company is stated to have been formed on 24-9-1997 to carry out the business of letting out premises constructed on the plot No. B-1/5A, Janakpuri New Delhi. The said plot was owned b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tutory deduction @ 25 per cent. The Assessing Officer also charged interest under section 234 and withdrew interest allowed under section 244A and also initiated concealment penalty proceedings under section 271(1)( c ). The decision of the Assessing Officer was disputed by the assessee. 2.1 In appeal, the assessee submitted before CIT(A) that the rental income was assessable as business income since the rent received was in the nature of composite rent, which included services towards security, watchman, telephone, computer and secretial facilities etc. It was also submitted that the assessee had received the total rent of only Rs. 12.84 lakhs and therefore, Assessing Officer was not correct in computing the annual letting out value at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany and the remaining 2 unfinished units were handed over to the land lady. The entire portion of 2 units was occupied by three tenants and the assessee, for administrative work and no part was lying vacant. Further the company had let out the furnished building along with services of security, watchman, secretarial facilities, communication facilities, computer, vehicles etc. The composite rent agreement along with the land documents and confirmation from tenants had been filed before CIT(A). The letting out of the building and services provided by the assessee were inseparable and therefore, the income was required to be assessed under the head Business . CIT(A) had not considered these documents. The ld. AR relied on the judgment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e computing the income from house property the amount of security service charges claimed by the assessee was deductible from the gross rent. 4. We have perused the records and considered the rival contentions carefully. The issue raised before us is regarding taxability of income from letting out of the premises constructed at plot No. B-1/5A Janakpuri, New Delhi. Five units had been constructed on the said plot consisting of basement and four upper floors. The claim of the assessee before us is that the assessee-company had constructed the building on the said plot, which was owned by Smt. Ramesh Rani Maini as per the verbal understanding with the latter in terms of which the assessee-company was entitled to occupy 2 units whole of w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to find out constructed area owned by the assessee and whether the share received by the assessee in consideration for the construction of the building free on the plot owned by the landlady conforms to the market value. As regards the ownership, we may make it clear that in the context of the provisions of section 22 of the Income-tax Act, the owner is a person who is entitled to receive the income from the property in his own right and not on behalf of others as held by Hon ble Supreme Court in case of R.B. Jodhamal Kuthiala v. CIT [1971] 82 ITR 570. Subsequently, the Act was also amended with effect from 1-4-1989 and deemed ownership provisions were incorporated in clauses ( iii ), ( iiia ) and ( iiib ) of section 27. Under the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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