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TMI Blog2010 (7) TMI 488X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of the case, the Ld. CIT (Appeals) has erred on facts and in law in deleting the addition of Rs.7,23,918/- made by the assessing officer on account of under assessed income by wrongly showing the business income instead of rental income disregarding the fact that it was not the business of the assessee to provide land and building on lease and the company M/s. Neelam Cable Manufacturing Co. from whom the assessee had taken the property on lease was the sister concern of the assessee; 2. On the facts and in the circumstances of the case, the Ld. CIT (Appeals) has erred on facts and in law in treating the assessee s income from business instead of income from house property even though the assessee had himself shown by Rent Received in receipts side of the Profit and Loss account fded with the return of income. 3.1 The only issue for consideration relates to deleting the addition of Rs. 7,23,980/- on the ground that the same was assessable as business income. The facts of the case stated in brief are that the original assessment was made under section 143(3) of the I. T. Act, 1961 wherein income from house property was treated as business income. The additions m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the lease agreement, the rent payable was Rs. 12,000/-, which has been declared by the assessee in the returns filed for earlier years. It was also submitted that the assessee was not the owner of the house property. Reliance was placed on the decision of the ITAT, Rajkot Bench in the case of ITO v. Tajmalbhai and Company in ITA. Nos. 192 to 194 (Rjt.) of 2005 for assessment years 1999-2000 to 2001-02. The assessee also placed reliance on the decision of Hon ble Supreme Court in the case of S.G. Mercantile Corpn. Pvt. Ltd. v. CIT ( supra ) wherein it was held that since the appellant was not the owner of the property or any part thereof and had taken the property on lease and after developing the property, let out the portion as shops / stalls etc., the rental income was assessable under the head business. The facts of the case being identical to the case laws relied upon by the assessee; the ld. CIT (A) came to the conclusion that the rental income was assessable as business income as the assessee was not the owner of the property. He also noted that the assessing officer while passing the order under section 143(3)/147, had allowed the expenses of salary, lease charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii), (iii), (iiia), and (iiib) of section 27 of the Act. These clauses of section 27 are reproduced as under:- 27. For the purposes of sections 22 to 26 (i) an individual who transfers otherwise than for adequate consideration any house property to his or her spouse, not being a transfer in connection with an agreement to live apart, or to a minor child not being a married daughter, shall be deemed to be the owner of the house property so transferred; (ii) the holder of an impartible estate shall be deemed to be the individual owner of all the properties comprised in the estate ; (iii) a member of a co-operative society, company or other association of persons to whom a building or part thereof is allotted or leased under a house building scheme of the society, company or association, as the case may be, shall be deemed to be the owner of that building or part thereof; (iiia) a person who is allowed to take or retain possession of any building or part thereof in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882), shall be deemed to be the owner of that building or part thereof; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of a building is to be transferred together with any machinery, plant, furniture, fittings or other things, such machinery, plant, furniture, fittings or other things also. Explanation. For the purposes of this sub-clause, land, building, part of a building, machinery, plant, furniture, fittings and other things include any rights therein. 5.4 On plain reading of clause (f)(i) and clause (d)(i) of section 269UA it is apparent that a transaction in respect of immovable properties by way of sale or exchange or lease for a term of not less than twelve years including allowing the possession of such property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 will be treated as transfer and the transferee assessee would become owner of house property for the purposes of sections 22 to 26 of the Act. 5.5 The Hon ble Supreme Court in the case of CIT v. Poddar Cement Pvt. Ltd. Others 226 ITR 625 (SC) had an occasion to examine the meaning of the word owner . It has been observed that section 9(i) of the Indian Income-tax Act, 1922 .was substantially the same as section 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... houses. House is defined in the Oxford Dictionary of English, 10 th Edition, as a building for human habitation, especially one that is lived in by a family or by a small group of people, consisting of ground floor and one or more number of stories. The word house in association of other words also has many other meanings but a commercial building is not regarded as a house. That, however, would not take the income from such building out of ambit of section 22. 6. In the case before us, the assessee under the lease agreement dated 6/9/1995 got a tenancy rights commencing from 6/9/1995 initially for 11 months which has been extended upto 20 years. As per the lease agreement entered into with the owner of the property, the assessee had developed the property and has leased out the same to other persons. Therefore, the assessee had got a right to receive the lease rentals from the tenants. Accordingly, for the purposes of section 22 the assessee is the owner of the property and the income therefrom is chargeable under the head income from house property. Further the decision in the case of S.G. Mercantile Corpn. ( supra ) was rendered in 1972 much earlier to the amendme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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