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TMI Blog2016 (2) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... he property. The godowns which are rented by the appellant are not in the nature of plant and machinery. The manner of end-use of the property consisting of buildings or lands will not alter the assessability of income from house property to a business activity. The AO had correctly applied the ratio of the decision of the Hon'ble jurisdictional High Court in the case of Chennai Properties & Investments [2003 (3) TMI 28 - MADRAS High Court] and Shambu Investments [2003 (1) TMI 99 - SUPREME Court]. It is to be mentioned here that the various expenses claimed by the appellant in the P & L account are not laid out for purpose of earning the rental income. The various expenses claimed in the P & L account are in no way connected with the earnin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , bills and vouchers had left services and it is difficult to trace him. However, the Assessing Officer treated the sales as income from other sources, as the assessee could not substantiate the claim of conduct of business activity in the year under consideration. It is also the observation of the Assessing Officer that bank account reveals that credits are only rental receipts received regularly every month and debits are towards water charges and vehicle loans. On appeal, the Commissioner of Income Tax (Appeals) sustained the addition against which the assessee is in appeal. 4. Counsel for the assessee reiterates the submissions made before the lower authorities. 5. Departmental Representative supports the orders of lower authoriti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate expenses relating to earning of income of ₹ 2,18,000/- is also not accepted as the AR of the appellant could not establish the nature of the income earned by the appellant to the extent of ₹ 2,18,000/- and also could not prove the necessity of making expenditure in the absence of the documentary evidence about the nature of income earned by the appellant. The AR of the appellant also could not conclusively prove that certain portion of the expenses claimed in the P L account are laid out for the purpose of earning income of ₹ 2,18,000/-. The appellant's plea to assess at 8% of gross receipts of ₹ 2,18,000/- is also not acceptable for lack of evidence in support of claim with respect to eligible business u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that letting of part of the business premises for rental purposes had been only a stopgap arrangement till better days return to leather industry. He submits that atmosphere in the factory premises was not conducive for residential purposes and the local authorities treated the let out portions as commercial properties, electricity rates have been charged only on commercial tariff rates. There had been no potable water and there had been no proper drainage facilities in the premises and therefore income from such property cannot be assessed as income from house property. 11. On a query from the Bench as to in which year the factory was let out, the Departmental Representative submits that in the accounting year 2007-08 onwards the factor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abourers for storing and keeping vigil on the goods stored by the lessee. The nature of the agreement between the appellant and the lessees are simple lease agreements for leasing the building along with the land for a fixed monthly rent payable to the appellant. Merely because the premises are let out for commercial use to the lessees would not make the transaction as a business activity. The appellant is not engaged in the business of leasing properties i.e. taking the properties on lease and again sub-leasing properties to various users. In the instant case the appellant has let out the property for a fixed consideration in the capacity of the owner of the property. The godowns which are rented by the appellant are not in the nature of p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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