TMI Blog2010 (11) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... on that it is the NDMC, which is the "owner of the premises and remains to be the owner of the premises in question". The Tribunal has further accepted the submissions of the assessee that in view of the provisions of section 27 (iii) of the Act, it is the sub-licensee who would be "deemed owner" of those premises which the sub-licensees whereof transferred to the present occupiers and those occupiers are paying rent/licence fee to the sub-licensees. On that basis, the Tribunal has set aside the addition made by the AO and deleted this component of income holding that the same would not be chargeable to tax, Tribunal in deciding the aforesaid issue is perfectly justified. There is no reason to interfere with the same - in favour of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the licence deed, the assessee had constructed the said hotel. Adjacent to the hotel, there is another building constructed on this very lawn, which is known as West Tower. This building is located in the same compound in which the Hotel building is located. Admittedly, this building is not used for hotel business of the assessee, but the apartments of this building were given on sub-licence basis to different parties for carrying on business as specified on the sub-licence agreements. The licence agreement which was entered into between the assessee and the NDMC permits the assessee to sub-licence the portion of the premises. It is on the basis of this authorization given in the licence deed that the assessee has sub-licenced offices an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received by the sub-licensees on these transfers to the occupiers has been shown as rental income and taxed at the hands of sub-licensees under the head 'income from house property'. 6. The AO, however, asked the assessee to explain why property known as West Tower be not fixed on its annual letting value as per which section 23 of the Income Tax Act (hereinafter referred to as 'the Act'). To put it otherwise, the AO wanted to fix annual letting value in respect of the said West Tower sub-licensed by the assessee by fixing its notional value and charging the tax thereupon under the head 'income from house property'. It is for this reason that the aforesaid show-cause notice was issued. The assessee in reply to the said notice raised var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the license agreement with the NDMC was for a period of 99 years with the right of constructing and developing the property which makes the assessee company owner of the property. He also opined that the assessee company had sub-licensed the offices and apartments to various persons, some of whom had further sub-licensed the same; the assessee was not charging any rent, fees etc. on the sub-licensing of these properties, except interest-free security deposits which were taken by the assessee at the time of sub-licence agreement. Therefore, it was proper, in such circumstances, to fix notional annual letting value of the premises and to charge tax thereupon insofar as the assessee is concerned. 8. We may also point out that in ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this ground. In this scenario, the assessee preferred further appeal before the Income Tax Appellate Tribunal (hereinafter referred to as 'the Tribunal'). This time, before the Tribunal, the assessee succeeded in its attempt to demonstrate that the assessee could not be liable to pay any such tax fixing letting value on notional basis when, in fact, no such amount of rent/licence fee was received by the assessee. The Tribunal examined the licence agreement entered into between the NDMC and the assessee on the basis of which it has come to the conclusion that it is the NDMC, which is the "owner of the premises and remains to be the owner of the premises in question". The Tribunal has further accepted the submissions of the assessee that in v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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