9911796707
TMI Blog2012 (3) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 2006-07. 2. The assessee is a company incorporated on 07.11.1996 and engaged in the business of real estate development. The assessee has declared a sum of Rs. 82,07,161/- under the head income from house property and the details of which are as under :- ( i ) Rental income against investment Rs. 15,51,613/- ( ii ) Signage rent Rs. 7,98,000/- ( iii ) Parking rent Rs. 24,50,237/- ( iv ) Lease rent Rs. 18,48,350/- ( v ) Terrace rent Rs. 1,00,000/- ( vi ) License fees Rs. 12,29,000/- ( vii ) License fee Rs. 2,29,961/- Rs. 82,07,161/- Assessee also claimed deduction u/s 24(1) of Rs. 24,62,148/-. The Assessing Officer took a view that out of the total income of Rs. 82,07,161/- declared under the head "income from house property", the amount of Rs. 48,07,198/- received consisting of signage rent of Rs. 7,98,000/-, parking rent of Rs. 24,50,237/-, terrace rent of Rs. 1,00,000/- and license fees of Rs. 12,29,000/- is to be taxed under the head "profits or gains of business". The CIT (A) held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circulars issued by the department are in support of the view taken by the assessee. The tax has been deducted by payer of amount by treating the amount as rent under section 194I of the Income-tax Act. He also pleaded that the circulars of the CBDT made it clear that any income attracted from letting out of the land or building is assessable under section 22 and 23 of the Income-tax Act and not under the head profits and gains of business or profession under section 28 of the Income-tax Act. The CIT (A) changed the head, i.e., income from other sources which is also not justified. Therefore, the conclusion arrived by the Assessing Officer as well as the CIT (A) are arbitrary and not in consonance with the contents of the income-tax provisions. A Circular No.699 dated 30.01.1995 the rent has been defined. The rent means any payment, by whatever name called under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land or any building (including factory building) together with furniture, fittings and the land appurtenant thereto, whether or not such building is owned by the payee. Another Circular No.715 dated 08.08.1995 regarding the deduction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be perpetuated. Thirdly, the reliance of the assessee that the TDS had been deducted as per the provisions of section 194I which are applicable to the TDS on rent is also not of a ground on which correct head of the income can be determined. The provisions of tax deducted at source are procedural in nature and these are meant for collection of taxes on the basis of principle "as you earn as you pay". The income to be assessed under the head "Income from house property" under section 22 of the Income-tax Act is the income relate to building or land or land appurtenant thereto of which the assessee is the owner. Such income is chargeable under the head income from house property. Section 23 lays down the ways of calculation of annual value of such property which is let out by the owner. Section 24 provides about deduction from income from house property. The income earning from installation of towers/antennas on its premises or income received from installation of signage or income from parking rent or income from giving space for operating small kiosks cannot be said to be income from house property or from land appurtenant with such property. 7. When we look to the TDS pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion shall apply accordingly.]" Nowhere the provisions of section 194I of Act provides that these provisions are applicable only to the rental income chargeable under the head "income from house property" as per the provisions of section 22 of the Act. Certain types of rent are also taxable under the head "Income from other sources" which is clear from the provisions of section 56 of the Act. The provisions of section 56 read as under :- "56. (1) Income of every kind which is not to be excluded from the total income under this Act shall be chargeable to income-tax under the head "Income from other sources", if it is not chargeable to income-tax under any of the heads specified in section 14, items A to E. (2) In particular, and without prejudice to the generality of the provisions of sub-section (1), the following incomes, shall be chargeable to income-tax under the head "Income from other sources" ** ** ** ( ii ) income from machinery, plant or furniture belonging to the assessee and let on hire, if the income is not chargeable to income-tax under the head "Profits and gains of business or profession"; ( iii ) where an assessee lets on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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