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TMI Blog2014 (12) TMI 1321X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and other services is assessable in the hands of the appellant company as profits and gains from business and not as income from house property; whereas, the CIT(Appeals) has come to such conclusion on misconstrued facts. 2. That, on the facts and in circumstances of the case and in law, the CIT(Appeals) has erred in holding that the two companies were separate entities and their having common Directors on the companies' board did not by itself prove any colourable device. 3. That, on the facts and circumstances of the case, and in law, the Ld. CIT(A)has erred in interpreting the actual essence of the order of the Assessing Officer where he had tried to bring out the fact that there was no Difference between the two companies and the lessor and the lessee were same persons having common interest in both the companies." 3. Briefly stated facts are that the assessee is a Registered Private Limited Company deriving income from licence fee from sub-tenants and declared the same under the head 'profit and gains of business or profession'. The assessee is a tenant of Dalhousie Properties Ltd. under agreement of tenancy dated 01-04-2001 in respect of ground floor space at Stephen Hou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blet, under-let or part with any possession of the room or any part of the room on permit any person to occupy even in case of temporary absence of the appellant. By virtue of this agreement, the appellant collected Licence fees of Rs. 5,04,000/- from sub tenants and service charges of Rs. 18,00,000/- for providing services like regular maintenance of the area occupied, security services, cleaning, payment of rates and taxes, water charges etc. from various parties have shown the same as business income under the head "Licence Fees". Thus, out of four tenants, receipts from three were treated as income from house property and that of the fourth one, namely, CRI Ltd., the receipts were treated as income from other sources. The Assessing Officer did not allow any expenditure, except allowing standard deduction from the house property income computed. The assessment was thus completed on total income of Rs. 16,56,000/- as against loss declared at Rs. 9,98,730/-. To recapitulate, the Assessing Officer has recorded the finding of the facts as under: 'That the lessor and lessee private limited companies in reality are one and the same and are being managed by the same persons; 1. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce in lease deeds in favour of the lessee. In Bhai Sunder Dass & Sons v. CIT [1972] 85 ITR 28 (Delhi)/New Cotton & Wool Pressing Factory v. CIT [1967] 65 ITR 662 (Raj), it has been held that property owned by a firm has to be treated as the property of the firm and not of its partners and its income can be assessed only in the hands of the firm. Similar is the case of the assessee company. In order to determine whether the income earned by the appellant lessee/tenant is income from business or income from house property or income from other sources for that matter, reference may be usefully made to the following legal propositions: '1. Nature of arrangement is relevant factor. It is the nature of arrangement and the reasons therefore that are relevant for the purpose of determining whether one has let out the property for business purposes or for merely enjoying rent. This is the type of test which is common to all cases. CIT v. Super Fine Cables (P) Ltd. [1985] 154 ITR 532 (Delhi)/CIT v. Prem Chand Jute Mills Ltd. [1978] 114 ITR 769 (Cal)/Everest Hotels Ltd. v. CIT [1978] 114 ITR 779 (Cal)(App.) Dharak Ltd. v. CIT [1987] 163 ITR 734 (Kar.) Where under the terms of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of business. In view of the facts and circumstances and the legal position as discussed, I am of the considered view that the income from sub-letting and other services is assessable in the hands of the appellant company as profits and gains of business. Since the Assessing Officer has not pointed out any specific defects in the maintenance of books of account or regarding the reasonability of the expenses incurred, he is directed to accept the book results as shown." Aggrieved, now Revenue came in appeal before us. 5. We have heard the rival contentions and gone through the facts and circumstances of the case. We find that the assessee is a registered limited company deriving its income from licence fees from different sub-tenants. The assessee is a tenant of Dalhousie Properties Ltd. under Tenancy Agreement dated 01-04-2001 in respect of ground floor space at Stephen House-63 & 58 of Hemanta Basu Sarani, Kolkata-700 001. The assessee was given right to, "assigned, sub-let, under-let or part with any possession of the room or any part of room or permit any person to occupy even in case of temporary absence of assessee". By virtue of this agreement assessee collected licence f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties are not permitted to begin fresh litigations because of new views they may entertain of the law of the case, or new versions which they present as to what should be a proper apprehension by the court of the legal result either of the construction of the documents or the weight of certain circumstances. If this were permitted litigation would have no end, except when legal ingenuity is exhausted. It is a principle of law that this cannot be permitted, and there is abundant authority reiterating that principle. Thirdly, the same principle - namely, that of a setting to rest rights of litigants, applies to the case where a point, fundamental to the decision, taken or assumed by the plaintiff and traversable by the defendant has not been traversed. In that case also a defendant is bound by the judgment although it may be true enough that subsequent light or ingenuity might suggest some traverse which had not been taken". Hon'ble Supreme Court also referred to their own judgment in the case of Parashuram Pottery Works Co. Ltd. V ITO [1977] 106 ITR 1 (SC), wherein at page 10 it was stated that "at the same time, we have to bear in mind that the policy of law is that there must b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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