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TMI Blog2024 (11) TMI 1265X X X X Extracts X X X X X X X X Extracts X X X X ..... ra 8 of the appeal, as under:- i) Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal was justified while holding that the rental income received by the appellant and other co-owners having definite share in the property was an income of the AOP? iii) Whether plinths constructed by the appellant are buildings within the meaning of Section 26 of Income Tax Act, 1961 for the purpose of assessment of income as income from house property? 2. The back drop of this appeal is that the appellant and other co-owners purchased property in their names having specified shares jointly in the property and thereafter constructed godowns and plinths which were rent out to PUNSUP and Punjab Ware Housing Corporation, Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the definition of 'building' and cannot be termed as income from house property. 5. The Revenue challenged the order in appeal before the ITAT, Amritsar. The appellant also filed cross objections whereafter the ITAT vide its order dated 25.05.2007 held the income received by the appellant as income of the AOP. However, the submission of the revenue allowing depreciation on the cost of plinths was rejected entitling appellant the deduction @ 10% on the cost of plinths. The cross-objections raised by the appellant were also rejected. Further the Assessing Officer was directed to explore the rental income on the total income of the members to see whether provisions of Section 167B(2)(i) i.e. levy of tax at the maximum rate was attracted. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ually on the specified shares is solely based on the sale deed regarding purchase of land. There is no defined share to the rental income and AOP has jointly received the income. There is no division in terms of the law and all of them were co-landlords of each rented out property. In ITO vs Ch. Atchaiah (1996) 218 ITR 239, the Apex Court held that merely if the members of an AOP have been assessed individually, the revenue would not be barred to assess such income in the hands of AOP if the income relates to AOP. The relevant extracts of Ch. Atchaiah (supra) is reproduced below:- "Section 4 extracted hereinabove says that income tax shall be charged on the total income "of every person" and the expression "person" is defined in clause (3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be taxed with respect to the said total income. This is not only logical but is consistent with the provisions of the Act. In this connection, it may be pointed out that where the Parliament wanted to provide an option, a discretion, to the Income Tax Officer, it has provided so expressly." The decision taken by the ITAT, therefore, on the issue of the rental income being that of AOP does not warrant any interference and question no.(i) is, accordingly, answered in favour of the Revenue. 11. The second question whether the plinth constructed by the appellant would be treated as a building and whether the income received for letting out the plinth to be treated as a house property. 12. We have to understand the definition of plinths w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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