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TMI Blog2001 (3) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant evidence or authority? (b) Whether, the finding of the Tribunal that considering the services and facilities offered by the assessee to the hirers of the office space the income should be assessed as business income is based on any relevant evidence or arbitrary ? (c) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessment made by the Income-tax Officer was not erroneous and prejudicial to the interests of the Revenue and thereby cancelling the order under section 263 of the Income-tax Act, 1961, passed by the Commissioner ?" Shambhu Investment (P.) Limited, the assessee abovenamed, is the owner of a building at Raheja Chambers, Nariman Point, Mumbai. The sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner, the assessee preferred an appeal before the Tribunal and the Tribunal after considering the facts and circumstances came to a conclusion that the order of the Assessing Officer was (not ?) erroneous and prejudicial to the interests of the Revenue and cancelled the order of the Commissioner passed under section 263. The moot question involved herein is whether the income derived from the said premises is rental income or business income. Mr. Ram Chandra Prasad, learned Advocate appearing for the Revenue authority, has submitted that on a plain reading of the agreement it appears that although the occupiers were allotted table space in effect the right given to the occupiers was to enjoy furnished accommodation in the said immo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions cited by Mr. Murarka. (i) Sultan Brothers Pvt. Ltd. v. CIT [1964] 51 ITR 353 (SC) : A five judges' Bench. of the apex court herein has considered a case wherein the assessee constructed a building and filled it up with furniture and fixtures and let it out on lease fully equipped and furnished for the purpose of running a hotel. The lease provided for a monthly rent for the building and a hire charge for the furniture and fixtures. Dealing with the said case, the apex court held that the letting out of the said building did not amount to the carrying on of a business and the income under the lease would not, therefore, be assessed as income from business. The apex court directed the said income to be assessed accordingly. To deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an income derived from the exercise of the property rights only but was income received from carrying on an adventure or concern in the nature of trade and as such, such income is a business income. (iii) CIT v. Admiralty Flats Motel [1982] 133 ITR 895 (Mad) : Here income of a partnership firm carrying on the business of "lodging house keepers" has been directed to be assessed as business income by the Division Bench of the Madras High Court. (iv) CIT v. Associated Building Co. Ltd. [1982] 137 ITR 339 (Bom) : In this case the assessee being the owner of the building was carrying on similar nature of business by providing office accommodation to various persons like the present case up to a certain period and allowed its income to be as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and letting out for limited period for marriage ceremony and other social functions has been considered by the Madras High Court as business and not letting out. (viii) Mukherjee Estate (P.) Ltd. v. CIT [2000] 244 ITR I (Cal) : In this case the court has directed assessment of income from display of sign boards as income from "other sources". Taking a sum total of the aforesaid decisions it clearly appears that merely because income is attached to any immovable property that cannot be the sole factor for assessment of such income as income from property. What has to be seen is what was the primary object of the assessee while exploiting the property. If it is found applying such test that the main intention is for letting out the proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pproach the problem from another angle by applying the test suggested by the five judges' Bench in the case of Sultan Brothers Pvt. Ltd. [1964] 51 ITR 353 (SC). The three questions framed by the apex court are applied in the instant case as follows : (A) Was it the intention in making the lease-and it matters not whether there is one lease or two, i.e., separate leases in respect of the furniture and the building-that the two should be enjoyed together ? In the instant case there is no separate agreement for furniture and fixtures or for providing security and other amenities. The only intention, in our view, was to let out the portion of the premises to the respective occupants. Hence, the intention in making such agreement is to allow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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