TMI Blog2010 (8) TMI 1060X X X X Extracts X X X X X X X X Extracts X X X X ..... the property bearing No. 3. Infantry Road Bangalore. The said property originally belong to M/s Hajee Sir Ismail Sait wakf Estate (for short Wakf ). The leasehold rights of the said property were given to one Sri K. Rajagopal Rao. For a period of 35 years i.e., from 1/1/1972 to 31/8/2007 vide registered sale deed dated 19/3/1973. Which was entered into between the said Wakf and Sri K. Rajagopal Rao. 3. Sri R. Rajagopal Rao carried on hotel business at the lease premises along with his two daughters Smt. Anitha and Smt. Latha. Constituting a partnership under the name and style of M/s Hotel Shyam Prakash. The said partnership came into existence on 1/2/1978 but unfortunately the partnership deed is not produced in this case. Subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is also on record that by agreement dated 31/03/1981 Sri K. Rajagopal Rao in his capacity as Managing Partner of M/s Hotel Shysm Prakash had entered into an agreement with one M/s Sri. Durga Enterprises, the latter was given license to run the business of boarding and restaurant under the name and style M/s Swathi Restaurant in the same property. The partnership firm put up an additional construction and a sum ₹ 10000/- was paid as lease deposit at the Wakf, Which is reflected in the books of the partnership firm. The interest free refundable rent deposit is shown as an asset of the firm and the lease rental is shown as expensed of the firm in the year 1977-78 itself. Similar entries are found recorded in the books of the partnersh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The balance sheet of the firm M/s Hotel Shyamprakash as on 31/3/1981 reflects the interest free deposit received from Swathi Restaurant as its liability under unsecured loan. Similarly, the trading and prifit and loss account reflects the rent received from Swathi Restaurant as income of the assessee firm. These entries found in the books of account of M/s Hotel Shyam Prakash. A registered partnership firm clearly indicate that the partnership firm itself was treating the leased premised assets own property prior to the year 1979 itself. No consideration was received from M/s Sri Durga Enterprise by Sri Rajagopal Rao, in his individual status Similarly, he has not paid any rent to the landlord in his individual capacity. 4. All these mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jagopal Rao took the land and building under a registered sale deed for a lease period of 35 years. After taking the building on lease, he started hotel business, Originally, one N. Subramanya Rao was his partner and after his retirement, Sri K. Rajagopal Rao along with his two daughters became partners. The entire tem along with additional advance and the increase in the advance is being paid by the partnership firm to the landlord. The firm has claimed depreciation for the said additional construction which has been built. Though Sri. K Rajagopal Rao entered into an agreement and granted lease of the old building and the open stairs to M/s Sri Durga Enterprises for running a restaurant under the name and style M/s Swathi Restaurant it w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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