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TMI Blog2014 (10) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... house property - A demand notice was issued by the Corporation calling upon the assessee to pay property tax in respect of stalls - the tax liability vests with the Corporation - the understanding between the parties has been that the tax liability vests with the Corporation - the Corporation is owner of the property and for the purpose of payment of property taxes can therefore be of no assistance to the assessee - The nature of the rights derived from the Auction, the Agreement and further that the Assessee can deal with the property by inducting third parties goes to show that he is the owner within the meaning of the Income Tax Act, 1961 – thus, no substantial question of law arises for consideration – Decided against assessee. - Income Tax Appeal No.588 of 2012, Income Tax Appeal No.713 of 2012, Income Tax Appeal No.720 of 2012, Income Tax Appeal No.721 of 2012, Income Tax Appeal No.722 of 2012, Income Tax Appeal No. 723 of 2012 - - - Dated:- 19-9-2014 - S. C. Dharmadhikari And A. K. Menon,JJ. For the Appellant : Mr. Nishit Gandhi i/b Mr. Sameer G. Dalal For the Respondent : Mrs. S. V. Bharucha ORDER P. C. 1. These appeals under section 260A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Mr.Gandhi submits that the understanding of the tribunal on the nature of this transaction leads to above substantial questions of law. 4. In his submission, the income derived by the assessee was and should have been taxed under the head profits and gains from the business and not income from house property . In relation to this conclusion of the tribunal that the income cannot be termed as derived from business or profession but from the house property. Mr.Gandhi had invited our attention to section 27 of the Income Tax Act, 1961 which according to him defines owner of house property , annual charge etc. Mr.Gandhi submits that none of the classes and particularly clause (iiib) which is part and parcel of this section was attracted inasmuch as the Commissioner of Income Tax (Appeals) rightly held that nature of rights acquired did not constitute a lease. If what was acquired is a pure license, then, even by reference to clause (f) of section 269UA of Income Tax Act which clause must be held to be incorporated in this definition, the assessee cannot be deemed to be owner of the building or part thereof. In these circumstances the income derived could never have been tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough to raise any substantial questions of law. She further submits that the appeals be dismissed. 6. We have with the assistance of both the counsel perused the order of the tribunal and which relies on the findings of the Commissioner of Income Tax (Appeals). We are in agreement with Ms.Bharucha that the appeals do not raise any substantial questions of law. The relevant statutory provisions are section 27(iiib) and which reads as under : (iiib) a person who acquires any rights (excluding any rights by way of a lease from month to month or for a period not exceeding one year) in or with respect to any building or part thereof, by virtue of any such transaction as is referred to in clause (f) of section 269UA, shall be deemed to be the owner of that building or part thereof. and section 269UA (f) : 269UA. In this Chapter unless the context otherwise requires- . . .. (f) transfer (i) in relation to any immovable property referred to in sub-clause (i) of clause (d), means transfer of such property by way of sale or exchange or lease for a term of not less than twelve years, and includes allowing the possession of such property to be taken or retained in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tore or Super Shopping Centre or similar Commercial Complex for marketable and non-marketable goods by holding public auction. Clause (3) provides that the successful bidder has to keep reserved 1/3rd of the Market area for Vegetable Retail Trade, equally, the stilt portion shall include stalls such as confectionary stalls, provision stalls, flower stalls etc. The bid charge was ₹ 6 per month per sq. ft., then, clause (7) refers to the bid charges being valid for first ten years. For the succeeding ten years they shall be increased at the rate not more than one and half times of the initial charges. Clause (10) gives permission to realign or construct stalls/shops but the assessee would have to submit layout through licensed Surveyor or Architect mentioning the commodity proposed to be sold in each stall and get approval from the Deputy Municipal Commissioner. Mr.Gandhi could rely upon one of the clause (12) and which denotes that successful bidder will have no right to sell, assign, sub-let or to dispose off or part with or induct third party in possession without permission from the Municipal Commissioner. All persons who are allowed in possession by the bidder were also re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfusion that is normally made and by the courts of limited jurisdiction in arriving at such factual conclusion is what would be nature of the transaction namely lease or license but that can hardly enable us to entertain and admit these appeals. We must look into the nature of the transaction, the rights that have been acquired by the assessee. The inescapable conclusion is that they are in the nature of transfer as defined in above clause of section 269UA (f) and in relation to immovable property. If the rights and which we have referred to have been acquired by the assessee and duration of the same, so also renewal thereof from time to time, the reciprocal obligations in the terms and conditions definitely go to show that in the given facts and circumstances he becomes owner of the immovable property. The income that he derives in relation to the house property has been classified rightly as such. 9. In the light of above factual conclusions we do not refer to any of the judgments and about which Mr.Gandhi seriously complains that same have been omitted by the tribunal as well. The tribunal was not required to decide anything with relation to the rights and whether that can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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