2003 (2) TMI 415 - HC - Income Tax

Commissioner of Income-tax (Appeals) directing to tax the income derived by the assessee from house property as income from business as against the same assessed as income from house property by the Assessing Officer - Revenue has not brought anything on record that the assessee is the owner of the property in question. So it is difficult to believe that the assessee is earning income from the property as far as this income is concerned - we uphold the order of the Commissioner of Income-tax (Appeals) - No referable question of law arises

Summary

Issues:
- Appeal by Revenue against the order of the Commissioner of Income-tax (Appeals) regarding the treatment of income derived from house property as 'income from business'.
- Determination of whether the income earned by the assessee from a building should be classified as income from house property or business income.

Analysis:
The case involved five appeals filed by the Revenue against the order of the Commissioner of Income-tax (Appeals) for the assessment years 1990-91 to 1994-95, all pertaining to the same assessee and common issue. The main contention was whether the income derived by the assessee from a building should be taxed as 'income from business' or 'income from house property'. The assessee had taken a lease on land, constructed a building known as Saptarshi Centre, and provided various services to tenants, treating the rent as service charges under 'Income from business and profession'.

The Assessing Officer argued that the entire receipts should be taxed as income from house property, citing the case of East India Housing and Land Development Trust Ltd. v. CIT. The first appellate authority considered the nature of activities conducted by the assessee, including providing services like lift, receptionist, telephone, and conference room, and held that the entire activity could be classified as a business activity. The Commissioner of Income-tax (Appeals) agreed, directing the income to be taxed under 'income from business' and allowing depreciation to the appellant.

The High Court upheld the order of the Commissioner of Income-tax (Appeals), noting that the Revenue failed to establish the assessee's ownership of the property in question. The Court highlighted the details of the lease agreement, construction of the service centre, and services provided by the assessee to tenants. It was concluded that the assessee was providing a working place along with various facilities, supporting the classification of the income as 'income from business'. The Court dismissed the appeal by the Revenue, stating that no question of law arose from the Tribunal's order.