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TMI Blog1973 (11) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... f the lessor - whether it can be treated as income from dealing in immovable property - - - - - Dated:- 23-11-1973 - Judge(s) : VIMADALAL., DESAI. JUDGMENT The judgment of the court was delivered by S. K. DESAI J.-This reference has been made by the Income-tax Appellate Tribunal, Bombay Bench "A", under section 66(1) of the Indian Income-tax Act, 1922. The assessee is a Hindu undivided family deriving income from property assessable under section 9 of the Act. We are concerned with the assessment year 1958-59, the previous year being the year ended on 31st March, 1958. For that year, the Income-tax Officer had determined the property income at Rs. 12,320. It appears that, thereafter, the Commissioner exercising his powers under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e lessee shall construct at his own expense a shop on the said plot.... Such construction shall be of the value of Rs. 4, 000 (four thousand) at least ... The lessee shall not have to pay any rent for the said plot during the continuance of the lease.... (6) The lessee shall keep the structure duly insured.... (9) Upon the expiry of the period of six years, the lessee shall hand over the possession of the demised plot of land together with the structure or structures erected thereon together with electric and other fittings to the lessors .... and the lessee shall not under any circumstances remove or pull down the structure erected on the plot. It is hereby also agreed and declared that on the expiry of the period of the lease the stru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner. Thereafter, the following two questions have been submitted for our consideration: "(1) Whether the sum of Rs. 30,000 has been properly brought to tax as rent in kind for the lease period for which the plots were leased out ? (2) If the answer to the above question is in the affirmative, whether the sum of Rs. 30,000 is properly included in the computation of total income of the year ended March 31, 1958 ?" Mr. V. P. Mehta has submitted that the first question referred to us by the Tribunal is concluded by a decision of this court in Commissioner of Income-tax v. Elphinstone Dye Works (P.) Ltd., where it was held that the notional amount received by the structure ceasing to be of the ownership of the lessee and becoming of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee-company when it granted the lease. In the case before us a sum of Rs. 2,000 was payable by the lessee at or before the execution of the lease, which would work out at about Rs. 27 per month over the six year period. This was when there was no structure constructed, which structure was thereafter to be constructed by the lessee. It is also the agreed position that after April 1, 1957 (from which date the structure passed to the ownership of the assessee family) the lessee continued to occupy the structure, paying the rent of Rs. 70 per month. In these circumstances it cannot be said that the original amount of rent was a reduced rent or that a much larger rent could have been charged. Accordingly, it will not be possible to hold that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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