TMI Blog2016 (7) TMI 705X X X X Extracts X X X X X X X X Extracts X X X X ..... ding that the letting out was to be taken as commercial exploitation of the property. The intention of the assessee was to enjoy rental income from the letting out of the property which was rightly treated as income from house property by the Assessing Officer. Thus the view adopted by the Tribunal is a plausible view based on appreciation of material on record and the relevant case law on the point. - I. T. A. No. 56 of 2010 - - - Dated:- 31-3-2016 - Ajay Kumar Mittal and Raj Rahul Garg, JJ. For the Appellant : Rajiv Sharma, Advocate For the Respondent : Rajesh Katoch, Advocate JUDGMENT Ajay Kumar Mittal, J. 1. This appeal has been preferred by the appellant-assessee under section 260A of the Income-tax Act, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power backup, false ceiling, front elevation with glazing and flooring, sanitary facilities as per brand requirements etc. The lease was for a total period of 12 years but subject to the condition as per clause (3) of Memorandum of Understanding (MOU) that the lease rent will be subject to increase of 15 per cent. after completion of every three years. The tenant Pizza hut was in the business of running Pizza Hut which had the potential of advertising the business of the assessee and introducing new customers and therefore, was beneficial for the business of the assessee and for this reason only, the assessee had offered the space to it on lease as it was not having a restaurant in its hotel which was required for running the hotel busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Plastics P. Limited's case (supra). On the other hand, learned counsel for the respondent-Revenue supported the impugned order. 4. We have heard learned counsel for the parties. 5. Admittedly, the assessee was owning a building in which it was running a hotel and restaurant business. A portion of the said property was leased out to another concern for running a restaurant by the name of Pizza Hut . The assessee claimed that this was done for a temporary period as the premises were vacated after two years and therefore the same had to be viewed as commercial exploitation of the asset. The Assessing Officer treated the income received from M/s Pizza Hut as income from house property instead of income from business. The Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rental income. The hon'ble Punjab and Haryana High Court in the case of Anand Rubber and Plastics P. Ltd. [1989] 178 ITR 301 (P H) has further observed that the distinction between the two approaches is a narrow one and has to depend on certain facts peculiar to each case. In the case of Anand Rubber and Plastics Pvt. Limited (supra), the hon'ble High Court found it as a fact that property was leased out temporarily as a commercial asset and therefore, it was held that the rental income was assessable as business income. The Commissioner of Income-tax (Appeals) has also relied upon the aforesaid judgment to decide the controversy in favour of the assessee. In this regard, we have carefully examined the facts of the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the letting out was for a temporary period. Thus, in our view, having regard to the facts and circumstances of the case, the Commissioner of Income-tax (Appeals) was not justified in inferring that the letting out in this case was to be taken as commercial exploitation of the property. The intention was clearly to enjoy rental income from the letting out of the property which in our considered opinion, was rightly brought to tax under the head Income from house property in the assessment order. The judgment of the hon'ble Punjab and Haryana High Court in the case of Anand Rubber and Plastics (P) Limited (supra) was clearly inapplicable because of different facts. In view of the aforesaid discussion, we therefore, set aside the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilding should be computed separately from the income from the furniture and fixtures and in the case of rent from the building, the assessee would be entitled to the allowances mentioned in sub-section (4) of section 12 of the Indian Income-tax Act, 1922 (in short, the 1922 Act ) and in the case of income from the furniture and fixtures, to those mentioned in sub-section (3), and that no part of the income could be assessed under section 9 or 10 of the 1922 Act. The other judgments relied upon by the learned counsel for the appellant-assessee in CIT v. Super Fine Cables P. Ltd. [1985] 154 ITR 532 (Delhi), Commissioner of Excess Profits Tax v. Shri Lakshmi Silk Mills Ltd. [1951] 20 ITR 451 (SC), CIT v. V.S.T. Motors P. Ltd. [1997] 226 ITR 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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