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TMI Blog2015 (10) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... . 295 of 2006 is an appeal by the Revenue against the order dated 29th July 2005 passed by the ITAT in ITA No. 881/Del/2001 for the AY 1997-98. 2. In both the appeals, the common question of law framed is whether the ITAT was right in admitting that the sum received by the Assessee from TELCO is taxable under the head 'income from business' and not under the head 'income from house property'? 3. The background to the appeal is that the Assessee is a public limited company whose shares have been held by the Sanghi family. The Assessee was engaged in the business of procuring Mercedes trucks from TELCO on behalf of its customers. It also has a service station for servicing the vehicles and a workshop at Najafgarh Road in Del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Municipal Corporation or any other authorities. They will pay the electricity and water charges and telephone bills and also the salaries of all the staff appointed by them, including such benefits as may be due as Provident Fund, Gratuity, Bonus, Employees State Insurance and Workmen's compensation etc. v) They will not be called upon to incur any expenditures such as conveyance, entertainment, advertisements and publicity printing and postage etc. incurred by, on behalf at the instance of Telco. vi) They will have adequately insured the said premises as also such equipments, fittings or fixtures belonging to them as may be the part of the premises. vii) Any reconstruction or repairs of structural nature in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvance a sum of Rs. 18,00,000 to Supreme Motors. The said sum was to be adjusted by TELCO @75,00,000 pm . The entire sum of Rs. 18,00,000 was to be adjusted in a period of twenty four months. 7. The Assessing Officer ('AO') concluded that the payment received by the Assessee from TELCO should be treated as income from house property and not as business income. The explanation of the Assessee that the premises at Najafgarh, Delhi was a commercial asset was rejected by the AO). He held that the agreement was "nothing more than renting out of the premises". 8. The Commissioner of Income Tax (Appeals) [CIT (A)] in the order dated 24th October 1996 for AY 93-94 observed that the AO had not brought proper facts to substantiate the concl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Court in CIT v. Ansal Housing Finance & Leasing Co.Ltd. (2013) 354 ITR 180. The Court also notices that there is a recent decision of the Supreme Court in Chennai Properties & Investment Ltd.(2015) 373 ITR 673 (SC) on the issue as to when the rental income earned by a company would be treated as business income. 11. While the aforementioned decisions explain the issue of income from house property vis-a-vis business income, and are focussed on two principal issues i.e. principal business activity of the Assessee and whether the income derived from the property owned by the Assessee could be said to be from an activity incidental to the main business activity, on the facts of the present case, the Court does not consider it necessary to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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