TMI Blog2017 (5) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... perused the other terms of the lease deed and we find that the assessee has simply leased out its property to M/s. Prathibha Housing and Finance (Pvt) Ltd. During the first year of lease he has agreed to receive the 60% profit of the business as annual rental income but subsequently the annual rent has been prescribed in clause 3 of the lease deed. Therefore, by any stretch of imagination it cannot be said that the assessee was doing business with M/s. Prathibha Housing and Finance (Pvt) Ltd., on profit sharing basis. It was simply a case of leasing out of property to M/s. Prathibha Housing and Finance (Pvt) Ltd. Therefore the leased rent received by the assessee is chargeable to tax as income from house property. - Decided against assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as partnership in the business. 7. The Income Tax Officer The Commissioner Appeals have failed to appreciate that the Business could be done by the Appellant or his representative in the present case the Company whom it is entrusted to the business. 8. For the above and other grounds that may be urged at the time of the hearing of the appeal, your appellant humbly prays that the appeal may be al lowed and just ice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. 2. Though various grounds are raised by the assessee but they all relate to the nature of income received from the property. The facts in briefs borne out from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant clauses of the agreement are given as under: The Lessor and the Lessee shall, after deduction of all expenses, share the net revenue in the ratio of 60 and 40 respectively calculated on a monthly basis and the Lessee shall deposit the Lessor s share. On the completion of the first year, the Lessor has a choice of continuing the existing revenue share arrangement wherein the Lessor and the Lessee would share the net revenue in the ratio of 65 and 35 respectively. Alternatively, the Lessor could switch to a lease option in the second year wherein the Lessee would pay a lease rent of ₹ 1,05,000/- per month and the Lessor would forfeit his right to receive any share on the revenues received by the Lessee in running the busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness in India the income received cannot be treated as business income and therefore the Assessing Officer s action in treating as house property income is hereby upheld. 4. Now the assessee is in appeal before the Tribunal and reiterated his contentions that he has not leased out the property to M/s. Prathibha Housing and Finance (Pvt) Ltd., rather he was doing business with them in a profit sharing ratio of 60% for the assessee and 40% for the company. He has also invited our attention to the lease deed through which he has entered into an agreement with the lessee to run the business of providing accommodations. 5. The learned DR besides placing reliance upon the order of the CIT(A) invited our attention to the terms of lease de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lessee and the lessee has exclusive right over the entire property for its use and also to sublease any portion of premises to the tenant for a period within the lease agreement period. Day to day maintenance of leased premises shall also be the responsibility of the lessee. 7. We have carefully perused the other terms of the lease deed and we find that the assessee has simply leased out its property to M/s. Prathibha Housing and Finance (Pvt) Ltd. During the first year of lease he has agreed to receive the 60% profit of the business as annual rental income but subsequently the annual rent has been prescribed in clause 3 of the lease deed. Therefore, by any stretch of imagination it cannot be said that the assessee was doing business wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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