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TMI Blog2017 (5) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... and is contrary to the evidence on record and thus is vitiated. 3. The order of the learned CIT (A) is erroneous; as the intention of the Appellant is not considered and the Commercial Contract entered which is purely of Business nature is wrongly interrupted. 4. The CIT Appeals has not considered the clause applicable for the year of the Appeal and looking into what could be applicable in future if such event happens which is only probability. 5. The learned CIT Appeals failed to appreciate the facts brought in the case of Chennai Properties, where more emphasis is given to the intention and objects of the Appellant. 6. The learned CIT Appeals has observed that the first year of the lease agreement, ( I t is not Lease Agreement and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Income Tax Officer and he treated it to be the Income from house property. 3. Aggrieved, the assessee has preferred an appeal before the CIT(A) with the submission that the assessee has entered into an agreement for doing business with M/s. Prathibha Housing and Finance (Pvt) Ltd. Therefore, the income earned on sharing basis should be treated as business income and not the income from house property. The CIT(A) re-examined the claim of the assessee but was not convinced with it and he confirmed the order of the AO. The relevant observation of CIT(A) is extracted hereunder for the sake of reference: "I have considered the above grounds of appeal and oral submissions made by AR of the appellant and also gone through the assessment orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncrement for the 6th year would be 15% instead of the above stated 10% on previous rent paid. Increment for all the other years would remain at 5% as stated supra. From the above clauses of lease agreement it is very clear that the lease agreement between Lessor and Lessee for the purpose of running a home stay in the premises. Though in the first year of the lease agreement there was a revenue sharing ratio of 60 and 40 it cannot be stated as partnership in the business, as the entire business activity was carried out by the Lessee and there was no partnership deep and the Lessor has simply handed over the property owned by him for the purpose of running a home stay in the premises and from subsequent year it was like any other rental ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has lease right for the entire portion of the scheduled premises and the lessee can sublease any portion of premise to tenant for a period during the lease agreement period. Therefore, the assessee has no control over the day to day affairs of the activities of the lessee with regard to the scheduled premises. Thus, the assessee has simply leased out the premises to M/s. Prathibha Housing and Finance (Pvt) Ltd., and the rental income received is to be charged as income from house property. 6. Having carefully examined the orders of the authorities below and documents placed on record, we find that through lease deed, the assessee has leased out the entire property to M/s. Prathibha Housing and Finance (Pvt) Ltd., vide lease deed dated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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