9911796707
TMI Blog2019 (3) TMI 1877X X X X Extracts X X X X X X X X Extracts X X X X ..... n of his property by an owner. The assessee when exploited the property to derive rental income it has to be held that the income realized by him by way of rental income from a building if the property with other asset attached to the building to be assessed as income from house property only. The only exceptions are cases where the letting of the building is inseparable from letting of the machinery, plant and furniture. In such cases, it has to be held that the rental would not have been realized but for the letting out of the machinery, plant or furniture along with such building and therefore, rental received for the building is to be assessed under the head income from other sources . In the present case, on the facts of the case, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of CIT(A) - 10, Hyderabad, for AYs 2007-08 and 2010-11. As identical issues are involved in both these appeals, they were clubbed and heard together and therefore, a common order is passed for the sake of convenience. 2. The assessee has raised the following grounds of appeal and additional grounds of appeal, which are common in both the appeals under consideration: "1. On the facts and circumstances of the case, the learned Commissioner of Income-tax (Appeals) - 10, Hyderabad ought not to have dismissed the appeal. 2. The learned CIT(A) ought to have held that the reassessment proceedings initiated by the Assessing Officer are not valid in the eye of law for the reasons that: (a) There are no reasons to believe that the income got e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted amount as rent and hire charges of equipment, interiors and furniture. Assessee is declaring the above hire charges an income from business or profession. It is also important to note that in order to provide the equipment and furniture, assessee has taken loan from bank and the relevant interest was charged to P&L A/c as business expenditure. In the earlier assessments, AO has rejected the claim of the assessee and treated the consolidated receipt of rent and hire charges as income from house property. The same view was upheld by the coordinate bench. Assessee preferred an appeal before the High Court. 6. Similar issue was raised by the assessee in the appeal for the AY under consideration. Meanwhile, assessee is declaring the hire ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he parties. In this case, though there is two agreements the real intention of the parties to a document is different what appears from it ex facie. Since there is a doubt, then the assessing officer is justified in going beyond the documents to find out real intention of the parties by ignoring the apparent has to be and has always been conceded. In this circumstance, the assessing officer has to remove the façade to expose the real intention of the parties cleverly cloaked and the actual agreement cannot be given effect. The only bona fide document to be acted upon not otherwise. There is a serious doubt and also it is shocking the conscious of the Bench, whether the assessee is getting hire charges equal to the rental amount for p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res, the provisions of sec.56(2) (iii) would be applicable and the income from building should be assessed under the head 'other sources'. But according to the fact arising in the present case, plant and machinery or furniture was not hired by the assessee along with the building. Therefore, the decision of the apex court in Sultan Bros case supra, will not be applicable to the facts of the present case. Thus, on a plain reading of sec.56(2)(iii) of the Act, in the light of the facts of the case, we hold that conclusion reached by the CIT(A) is not correct. Further, no precise test can be laid out to ascertain whether income referred to by whatever nomenclature, lease amount, rent or licence fee received by an assessee from leasing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .' The various assets let out to the tenants are incidental to letting out the building being integral part of the letting. Accordingly, we reverse the order of the CIT(A) and restore that of the assessing officer. This ground of the revenue is allowed." Respectfully following the same, the ground raised by the assessee is dismissed. 8. With regard to additional ground No. 3(b), we notice that assessee has availed loan to arrange the relevant fixed assets in the building and incurred interest expenditure. Since, the assessee was claiming them as business expenditure as the income was declared as business income. As the authorities have treated the business income as income from house property, the interest expenditure is connected to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
