9911796707
TMI Blog2014 (9) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... business of hotels, the petitioner constructed a building and, after construction, it appeared that the assessee could not run the business of the hotel as the building so constructed was found to be located in a remote area and far away from the railway station and it was felt that carrying on the business of hotel was not a feasible business. The Board of Directors of the company passed a resolution dated 12th March, 1989 deciding to run a hospital or a nursing home either under its own supervision or to lease out the building with plant, machineries, generators, lifts or other amenities to any Doctor or to a medical institution. Pursuant to the said resolution, a lease deed was executed in favour of Deva Nursing Home Pvt. Ltd. dated 2nd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the Commissioner of Income Tax holding that the income of the appellant was an income from house property, but the other member dissented holding that such income is a business income. On account of difference of opinion between the two members, the matter was referred to the third member of the Tribunal, who opined that the income of the appellant should be assessed as income from house property. In view of the opinion of the third member, the appeal of the appellant was dismissed holding its income as income from house property. The appellant, being aggrieved, has filed the present appeal under Section 260A of the Income Tax Act, which was admitted on the following substantial questions of law: "(i) Whether, the income of Rs. 3,23, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the Supreme Court in Karnani Properties Ltd. Vs. Commissioner of Income Tax, West Bengal, 82 ITR 547 and Universal Plast Ltd and another Vs. Commissioner of Income Tax, 237, ITR 454. On the other hand, Sri R.K. Upadhyaya, the learned counsel for the department submitted that in view of Section 14 read with Section 22 income from renting of properties is chargeable to income tax under the head "income from house property". The learned counsel further contended that a perusal of the terms and conditions of the lease deed would make it apparently clear that only the building was let out and the mere fact that the building had a lift, tubewell and electrical fittings would not make any material difference as these were amenities, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omputation of total income, all income shall be classified under the five following heads of income specified in Section 14 of the Act unless it is specifically provided otherwise elsewhere by the Act. On the other hand, Section 22 provides that income from house property would be chargeable to income tax under the head "income from house property". For facility, Section 22 of the Act is extracted hereunder:- "Income from house property. 22. 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 which are chargeable to income tax, shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activities, then it is a case of exploiting the business assets otherwise than employing them for his own use for making profit for that business; but if the business never started or has started but ceased with no intention to be resumed, the assets also will cease to be business assets and the transaction will only be exploitation of property by an owner thereof, but not exploitation of business assets." In the light of the aforesaid principles, the learned counsel for the appellant contended that the facts in the instant case has to be gone into for the purpose of holding whether it was a business income or income from property. The learned counsel contended that the appellant's intention was to run a hospital but since it had no e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uliar amenities, which could be commercially exploited such as facilities of sterilization of surgical instruments and bandages or an operation theatre. The Tribunal has given a categorical finding of fact that the building which was leased out by the appellant was nothing else but a building simplicitor and was not a building, which was equipped with specialized plant and machinery. This being a finding of fact, we are not inclined to interfere in such findings, especially when nothing has been brought on record to indicate that the said finding was perverse. We also find that the appellant is not running the business of a hospital and has only let out the building. We are of the opinion that the income derived by the appellant was from t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
