9911796707
TMI Blog2013 (10) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... filed her return of income for the year under consideration on 21st July, 2005 declaring total income of Rs. 6,49,643/-. The assessee earlier was running a restaurant in the name and style of her proprietary concern M/s Khana Khazana. As a result of loss incurred in the said business, the assessee decided to enter into an agreement with Mrs. Rajendra Saigal for conducting the said business. As per such agreement initially entered into on 6-10-2003 and further renewed on 6-10-2004, the assessee was to receive commission and such commission amounting to Rs. 16,90,205/- received during the year under consideration was offered by the assessee in her return of income as business income to the tune of Rs. 7,59,300/- after claiming certain expense ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be entitled to evict the conductor from the occupation of the said hotel premises and business and the conductor shall not object and cause any obstruction of the said hotel business and the premises to the said owner. v) The conductor shall pay all the fees of licenses of the hotel on behalf of the assessee. vi) The conductor shall pay separately electricity bills, water charges and telephone bills as per the meter reading. vii) The conductor at her own cost and expenses will maintain the inventory of equipments, fixtures and utensils and preserve all the articles enumerated in the annexure in good and proper condition. The conductor shall pay for any and all authorisation licenses and permits that may be required by any rule, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsferred by the assessee to the conductor and there was no such risk in whatever form attributable to the assessee. He also noted that the assessee as per the said agreement was to receive minimum amount of Rs. 1 lac per month or 22% of the net sales whichever is higher as compensation for use by the conductor of her licenses, premises, furniture, fixture and other assets. He, therefore, held that the compensation received by the assessee from Mrs. Saigal for allowing her to use the licences and premises along with furniture and fixture without assuming any business risk was not the business income of the assessee and the same was chargeable to tax in her hands under the head "income from other sources" u/s 56 of the Act. He also held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business was continued by the assessee in the year 1998 and due to losses suffered in the said business, the restaurant was given to Mrs. Saigal for running the said business as per the conducting agreement. He took us through the copy of the said agreement placed at page No. 77 of his paper book and contended that going by the terms and conditions of the said agreement as well as keeping in view the fact that the restaurant business was given by the assessee for running to the third party as a temporary measure, the receipts under such agreement constitute business income of the assessee. He pointed out that all the licenses required for running the restaurant were in the name of the assessee and even the restaurant was being run by the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from house property" while the compensation received for other assets and licences is chargeable to tax under the head "income from other sources". As there is no such bifurcation of compensation indicated in the relevant conducting agreement, we direct the assessee to make such bifurcation on some reasonable basis and the A.O. is directed to verify the same and bring to tax the compensation attributable to the use of building premises under the head "income from house property" and for use of other assets and licences under the head "income from other sources". Ground No. 1 to 4 of the assessee's appeal are thus partly allowed. 9. As regards the issue raised in ground No. 5 relating to the disallowance of expenses of Rs. 4,25,102/- made b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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