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TMI Blog2017 (3) TMI 660X X X X Extracts X X X X X X X X Extracts X X X X ..... orrect and unjustified in: a) Holding that rental income declared for the assessee was rightly assessed by the Assessing Officer as income from other sources. b) Holding that the rental income is assessable as income from other sources even if the property had been constructed in any year prior to A.Y. 2009-10. c) Holding that rental income as declared is taxable as income other sources. d) Holding that the Assessing Officer was right is not allowing deduction out of rental income as claimed. e) Holding that the rental income was taxable as income from other sources even if the deduction for house tax has been allowed. f) Holding that the rental income earned by the assessee in this case was taxable as income from other sources. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, the learned Commissioner of Income Tax (Appeals) observed in the impugned order as under: (i) According to the sale deed the assessee only purchased roof rights over the entire second floor with the right to construct and own any areas/floors on the third floor and subsequent terraces in respect of Plot No. 26, Block No. 34, Pusa Road, New Delhi, along with 20% indivisible leasehold rights in the plot of land. (ii) The sale deed clearly reflected that the third floor was not constructed as on the date of purchase of the property. (iii) In the balance sheet as on 01.04.2008, only the investment in purchase of terrace right with the right to construct was reflected and there was no investment on construction of the property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under the head "income from other sources" merely on the ground that the construction expenses of the same were not reflected in the balance sheet of the assessee. 4. On the other hand, learned Sr. Departmental Representative relied on the orders of the authorities below. 5. We have heard the rival submissions and perused the relevant material on record. We find that for the purpose of assessing the rental income from the property under the head "income from house property", the two conditions must be fulfilled. First condition is that there must be a property consisting of any building or land appurtenant thereto. Second condition is that the assessee must be owner of that property. 5.1 In the instant case, the assessee has submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income under the head "income from other sources" when the conditions of Section 22 of the Act for assessing the annual value of the property have been fulfilled by the assessee. By not recording construction expenses in books of account, the rights of ownership of the assessee over the property cannot be taken away and it remains the owner of the property.
5.4 In view of the above discussion, we, therefore, direct the Assessing Officer to assess the rental income from the property under the head "income from house property" and allow the deduction in accordance with law.
6. In the result, the appeal of the assessee is allowed.
The decision is pronounced in the open court on 17th February, 2017. X X X X Extracts X X X X X X X X Extracts X X X X
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