TMI Blog1994 (11) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... as TNK House should be assessed under the head ' Other sources ' and not under the head ' Property ' ? 2. Whether the conclusion of the Tribunal that the letting out of the building and provision of amenities are an inseparable part of the lease deed is reasonable and supported by material on records ? 3. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in holding that only the net interest paid to the partners by the assessee-firm should be disallowed under section 40(b) of the Income-tax Act, 1961 ? " The assessee is the owner of a multi-storeyed building called TNK House, in which its business in exhibition of cinema films was carried on. A part of the building in the first, second and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Tribunal, following the decision of the Supreme Court in the case of Sultan Brothers P. Ltd. v. CIT [1964] 51 ITR 353, held that the income is assessable only under the head "Other sources" in view of the provisions contained in section 56(2) of the Act. Before us, learned standing counsel for the Department submitted that in order to assess the income from the property under the head "Other sources" there must be two lease deeds for letting out the building and the amenities. The amenities provided by the assessee are part of the building and, therefore, no separate plant, machinery or furniture was let out along with the building so as to comply with the provisions of section 56(2)(iii) of the Act. Therefore, according to lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rical fittings and fixtures are provided by the tenant himself. In the case of Corporation Bank Ltd. which is in occupation of 2,980 sq. ft. on the first floor a water closet has been provided by the assessee and the complete plumbing was done by it. The electrical fittings and other fixtures have been provided by the tenant himself. Tirupathi Enterprises is in occupation of a portion in the fourth floor of the building. Another tenant, Indian Investment Centre is also in occupation of the said building. They have the benefit of having partitions, fans and lights and internal electrical fixtures provided by the assessee. There are two lifts in TNK House. These are used not only by the employees of the assessee-firm, but also by the employee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out was chargeable as income from house property and not as income from ' other sources '." So also while considering the provisions of section 56(2)(iii) and section 22 of the Act in the case of India City Properties Ltd. v. CIT [1978] 111 ITR 19 (Cal) on the facts, where the assessee derived income, inter alia, from letting out house property with a lift, air-conditioning, etc., it was held that " the income derived from letting out the building was assessable as income from ' house property ' under section 22. The lift charges and air-conditioning charges which have been shown separately in the Income-tax Officer's order were assessable under section 56 as income from ' other sources '. " The Bombay High Court also had an occasion t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lift provided in the building is for the common use of the tenants including the assessee. The assessee is repairing the lift and maintaining it. Therefore, the assessee is having control over the lift. There is no material on record to show that the assessee was paying charges for using the lift separately. The facts arising in this case would clearly go to show that the assessee has not hired machinery, plant or furniture belonging to the assessee along with the building. Therefore, the hire charges said to have been collected for the purpose of providing amenities and the rent for the building would not come under the purview of section 56(2)(iii) of the Act. The assessee contended that the word " plant " should be liberally construed s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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