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TMI Blog2004 (7) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... from the property let out to the employees of the subsidiary company should be treated as an income from house property under section 22, instead of assessing the property in question as commercial assets and charging the same under section 28, as rightly contended by the appellant/Revenue. – Revenue’s appeal allowed - - - - - Dated:- 6-7-2004 - Judge(s) : P. D. DINAKARAN., N. KANNADASAN. JUDGMENT The judgment of the court was delivered by P.D. DINAKARAN J. - The appeal is directed against the order dated June 2003, made in I.T.A. No. 83/Mds of 1996 on the file of the Income-tax Appellate Tribunal, Chennai Bench "A", holding that the residential properties of the respondent/assessee let out to the employees of the sister concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the appellant/Revenue assessed those properties under section 22 of the Income-tax Act (in short the "Act") as an income from the house property, of course, taking the estimated annual value of the property into consideration in the assessment order dated May 26, 1995. Aggrieved by the said assessment order, an appeal was preferred before the Commissioner of Income-tax (Appeals) contending that these assets are commercial assets of the respondent/assessee and since the properties were let out to the employees of the sister concern, they are deemed to be in occupation for the purpose of business of the respondent/assessee and therefore, the said rental income from the said assets has to be assessed as profits and gains of business under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rongly placing reliance on section 22 of the Act contends that both the assessing authority and the appellate authority having satisfied that the respondent/assessee is the owner of the property in question and further satisfied that the property was rented out to the subsidiary of the company and therefore they are not in occupation of the said premises for the purpose of business of the respondent/assessee, ought to G have assessed the said property and charged the income from the house property only under section 22 of the Act, but not under section 28 of the Act, viz., as an income from business. Per contra, learned counsel for the respondent/assessee effectively contends that letting out the property to the employees of the sister ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be chargeable to income-tax under the head 'Income from house property'. 28. Profits and gains of business or profession. - The following income shall be chargeable to income-tax under the head 'Profits and gains of business or profession' (i) the profits and gains of any business or profession which was carried on by the assessee at any time during the previous year." From a plain reading of section 22 of the Act, it is clear that the annual value of the property, consisting of any buildings or lands appurtenant thereto of which the assessee is the owner, is chargeable to income-tax under the head "Income from house property" except such portions of such property which the assessee may occupy for the purposes of any business or pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation directly by the assessee himself or through an employee or agent but such occupation by the employees, etc., within the meaning of the exception in the said section, must be subservient to and necessary for the performance of the duties in connection with the business of the company, vide CIT v. Modi Industries Ltd. [1994] 210 ITR 1 (Delhi) [FB]. In the instant case, it is not in dispute that certain property belongs to the respondent/assessee themselves. The next test to be satisfied is whether the property in question is the property other than the property occupied by respondent/assessee for his business? The respondent/assessee is not in occupation of the property and there is no dispute about it. Therefore, the said property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see themselves. Therefore, the occupation of the properties in question by the employees of the sister concern cannot be construed as an occupation by the employees of the respondent/assessee themselves, in the absence of any specific provision in law to that effect, as it is trite law that the object of interpreting a statute or any statutory provision is to ascertain the intention of the Legislature or the authority enacting it. The intention of the maker is primarily to be gathered from the language used, which means that attention should be paid to what has been said as also to what has hot been said. As a consequence, a construction which requires for its support; addition or substitution of words or which results in rejection of words ..... X X X X Extracts X X X X X X X X Extracts X X X X
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