9911796707
TMI Blog2006 (1) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... and carefully perused the orders of the authorities below and documents placed on record. The facts borne out from the record are that the assessee has taken the premises on lease from Basantkumar Somani Memorial Trust on a lease rent of Rs. 750 per month and the same were further let out to Prime Securities Ltd. at the rate of Rs. 12,500 per month. The assessee has treated the rent received as income from business and claimed certain expenditure against that income. The Assessing Officer was not convinced with the claim of the assessee and the assessee was asked to explain regarding its agreement with Basantkumar Somani Memorial Trust and in response thereto, it was explained on behalf of the assessee that the said premises were leased out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per section 24 of the Act. Accordingly, 1/5th of the collected rent was allowed as deduction on account of repairs and maintenance. 3. Aggrieved, the assessee has preferred an appeal before the CIT(A) with the submission that the Assessing Officer has wrongly placed reliance upon the Judgment of the jurisdictional High Court in the case of Arvindkumar Udhavji (supra) whereas this judgment was rendered in different context. A general principle cannot be laid down in these type of cases that every letting is only to earn income from house property, it depends upon the facts of each and every case. The CIT(A) re-examined the issue in the light of the aforesaid judgment of the jurisdictional High Court, but, was not convinced with the explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the leave and license agreement executed between the assessee and the sub-tenants with the submissions that assessee was engaged in the business of licencing premises to different tenants on monthly license fees. He has further contended that the assessee itself is a tenant in the property. He cannot be called to be the owner of the property, as such, income from house property cannot be determined as per section 22 of the I.T. Act. In support of his plea, a reliance was placed upon the judgment of the Apex Court in the case of S.G. Mercantile Corpn. (P.) Ltd. v. CIT [1972] 83 ITR 700 and CIT v. Podar Cements (P.) Ltd. [1997] 226 ITR 625. 5. The learned DR on the other hand has contended that the assessee has obtained the premises on le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to section 27(iiib) of the I.T. Act and as such, he is liable for income from house property to be determinable under section 22 of the I.T. Act. 6. Having carefully examined the orders of the lower authorities in the light of rival submissions and the material available on record, we find that admittedly the assessee has taken the premises on lease vide lease deed dated 3rd September, 1990 against monthly rent of Rs. 750 and since then, assessee has been enjoying the continuous uninterrupted possession. Through this lease deed assessee was permitted to sublet the tenanted premises to other sub-tenants. He was also permitted to divide the tenanted premises into a small cabins. By virtue of this lease deed, lessor would not be entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the entire lease deed, the lease cannot be termed to be from month to month. A lease from month to month has a different meaning and in that case the lease starts from the first day of the month and ends on the last day of the month, thereafter, it further renews for another period of month and ends on the last day of the month. During the period of month, it cannot be terminated. It can only be terminated at the end of the month. 7. We have carefully gone through the provision of section 27(iiib) of the Act according to which, a person who acquires any right (excluding any rights by way of lease from month to month or a period not exceeding one year) in or with respect to any building or part thereof, by virtue of any such transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd kept on letting out the property for a period of more than 7 years in part and with that understanding the licensee has paid a sum of Rs. 13,48,596 as interest-free security deposit. Having read both these lease and license agreements, we are of the considered opinion that it is not a case where it can be held that assessee has taken the lease from month to month or for a period not exceeding one year or excluded from the clutches of sub-section (iiib) of section 27 of the I.T. Act. We have also examined the judgments referred to by the assessee but no assistance can be drawn in favour of the assessee as they were rendered under different facts and circumstances and not applicable to the facts of the present case. We, therefore, hold tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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