9911796707
TMI Blog2012 (8) TMI 711X X X X Extracts X X X X X X X X Extracts X X X X ..... ertains to ITA No.1611/Mum/2008. 2. The appeal is admitted on the following substantial questions of law and heard finally : (A) Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal in law was right in holding that the rent and compensation of Rs.60,27,027/- received by the assessee is to be charged under the head business income and not under the head "Income from House Property" as held by the Assessing Officer in the order under section 143(3) of the Income Tax Act, 1961? (B) Whether, on the facts and in the circumstances of the case and in law, the Hon'ble Tribunal was justified in following its orders for assessment year 2003-2004 treating the rental income under the head "Profits and gains from bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the sub-licencees constituted income from house property. He relied upon sections 22, 27(iiib) and 269UA(d) and (f) of the Act, which read as under :- "Income from house property. 22. The annual value of property constituting 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 which re chargeable to income-tax, shall be chargeable to income-tax under the head "Income from house property". "Owner of house property", "annual charge, etc. defined- 27. For the purposes of section 22 to 26 - ................ (iii-b) a person who acquires any rights (excluding any rights by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the term for which such lease is to be granted and the further term or terms for which it can be so extended is not less than twelve years; ............................." 6. The question is whether in the facts of this case, it can be said that the period of the licence created in favour of the respondent exceeded twelve years as contended on behalf of the appellant. 7(A) By an agreement dated 7th November, 1984, Hotel Leelaventure Limited (HLL) granted the respondent (referred to therein as the Sole Concessionaire), a licence in respect of an area admeasuring about 450 square meters on the terms and conditions stated therein. Clauses 1 and 4 (i)(a) thereof read as under : "(1) The Hotel Company hereby gives to the Sole Concessionaire ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement was structured by the parties thereto to get over the said provisions. 9. Thereafter, the respondent and HLL entered into a fresh agreement dated 24th January, 1999, by which HLL granted the respondent (referred to therein as the Sole Concessionaire) a licence in respect of the same premises. The last recital and clauses 1 and 4(i) (a) of the agreement read as follows : "AND WHEREAS, the parties have agreed to enter into a further agreement w.e.f. 28th November, 1998." "(1) The Hotel Company hereby gives and the Sole Concessionaire and the Sole Concessionaire takes from the Hotel Company on licence basis the said shopping arcade for a period of 10 years commencing from 28th November, 1998. .............. (4) The Sole Concessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant has not indicated any factors which would establish any connection between the two agreements. They have not been able to indicate any factors on the basis of the agreements or even otherwise which would indicate that the latter agreement was a continuation of the first agreement. Nor have they been able to establish that at the time of entering into the first agreement, the parties had agreed or even contemplated entering into a further agreement for any duration at all. 13. On the other hand, the agreements establish beyond doubt that they are separate and distinct. For instance, neither the respondent nor HLL had a right to renew the first agreement. This is the clearest indication that the subsequent agreement was separate an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished that the different licence agreements were, in fact, a camouflage for one composite agreement for a period of 12 years or more. That, at the cost of repetition, is neither the appellant's case nor established on the basis of the record. The record, in fact, indicates the contrary. 18. Added to this is the fact that the department had accepted the respondent's case throughout. It is only for the assessment years 2003-04 onwards that the present contention had been raised. There were, as noted by the Commissioner of Income Tax (Appeals), no change in circumstances which would warrant a different view being taken. 19. The questions are, therefore, answered in favour of the respondent - assessee. 20. In the circumstances, the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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