TMI Blog2018 (8) TMI 1622X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices had to be considered only under the head income from business. Assessing Officer fell in error in treating such amounts under the head income from house property. Ld. Commissioner of Income Tax (Appeals) fell in error in treating part of such income as income from house property. We are of the opinion that assessee’s income has to be considered only under the head "income from business". - Decided in favour of assessee - I.T.A. Nos.195 & 196/CHNY/2016, I.T.A. Nos.376 & 377 /CHNY/2016 - - - Dated:- 23-7-2018 - Shri N.R.S. Ganesan, Judicial Member And Shri Abraham P. George, Accountant Member For the Assessee : Shri. T. Banusekar, C.A. For the Department : Shri. N. Gopikrishna, IRS, JCIT ORDER PER ABRAHAM P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lessees, though it was on separate agreements, provision for such services were inseparable from the activity of renting out the property. As per the ld. Assessing Officer these services were rendered for getting higher rent from the lessees. Thus the whole of the amounts received by the assessee from the lessees, including the maintenance charge were brought to tax by the ld. Assessing Officer under the head income from house property , for all the impugned assessment years. 3. Aggrieved, assessee moved in appeal before the ld. Commissioner of Income Tax (Appeals). Argument of the assessee was that though there were two separate agreements, one for renting out the premises and one for providing services object of the assessee wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h case had to be considered before reaching a conclusion whether income should be considered under the head income from house property or business. Nevertheless, he held that income received for maintenance charges from the lessees had to be considered under the head income from business . Thus he gave partial relief to the assessee. He upheld the order of the ld. Assessing Officer in so far as it related to lease rental but allowed the appeal of the assessee in so far as it related to maintenance and service charges received from the lessees. 5. Now before us, Revenue is aggrieved on the direction of the ld. Commissioner of Income Tax (Appeals) to treat the maintenance and service charges received from the lessees under the head busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. ACIT, (2016) 386 ITR 500. 7. Per contra, ld. Departmental Representative submitted that by virtue of the judgments of Hon ble Apex Court in the case of East India Housing Land Development Trust Limited, (supra), Karnani Properties Limited (supra), and S.G. Mercantile Corporation Private Limited (supra), even if main object of the assessee was running a technology park or leasing out a technology park, rental received had to be considered only under the head income from house property. 8. We have considered the rival contentions and perused the orders of the authorities below. It is not disputed that assessee was a recognized IT park and had rented it out to various software companies. It is also not disputed that assessee had en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25. We have to find out in that context what was the intention of the parties in entering into the lease transaction. It is not the number of agreements, which are entered into between the parties which is decisive in determining the nature of transaction. What is the object of entering into more than one said transactions is to be looked into. However, if for enjoyment of lease, the subject matter of all the agreements is necessary, then notwithstanding the fact that there are more than one agreement or one lease deed, the transaction is one. As all the agreements are entered into contemporaneously and the object is to enjoy the entire property viz: building, furniture and the accessories as a whole which is necessary for carry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a part and parcel of its business. Hon ble Apex Court in the case of Rayala Corporation Pvt. Ltd (supra) had after considering the earlier rulings relating to the issue with regard to treatment of rental received by a company, whose main and only business was to lease out its property for earning rent, held as under at para 10 11 of the judgment. 10. Submissions made by the learned counsel appearing for the Revenue is to the effect that the rent should be the main source of income or the purpose for which the company is incorporated should be to earn income from rent, so as to make the rental income to be the income taxable under the head Profits and gains of business or profession . It is an admitted fact in the instant case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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