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TMI Blog2021 (4) TMI 1121X X X X Extracts X X X X X X X X Extracts X X X X ..... t for adjournment and the learned DR did not object. Accordingly, the case relating to assessment year 2010-2011 was adjourned). 2. Common issue is raised in the above appeals, hence, they were heard together and are being disposed of by this consolidate order. Identical grounds have been raised for these appeals, except for variance in amounts. Therefore grounds pertaining to assessment year 2005-2006 are reproduced below:- "1. That on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in confirming order passed by Ld. Assessing Officer, in treating the rental income earned from building amounting to Rs. 84,01,884 as `income from other sources' instead of "income from house property" as claimed by the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had let out certain plant and machinery / equipment along with the property. 5. Aggrieved by the assessment orders completed for assessment years 2005-2006 to 2007-2008, 2012-2013 and 2013-2014, the assessee preferred appeals to the first appellate authority. The assessee submitted that it had taken on lease land for a period of 99 years from the Government of India and constructed factory building on it. Therefore, it was contended that the assessee was the owner of factory premises. It was further contended that the rental income from sublease of such land and building was offered to tax by the assessee as "income from house property" being the specific head for taxation of such rental income in terms of section 22 to 27 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Departmental Representative, on the other hand, strongly supported the assessment orders and the orders passed by the CIT(A). 9. We have heard rival submissions and perused the material on record. The Hon'ble Madras High Court in the case of CIT v. Chennai Properties and Investments Ltd. [(2004) 266 ITR 685 (Mad.)] after referring to the Hon'ble Apex Court judgment in the case of Sultan Brothers Private Limited v. CIT [(1964) 51 ITR 353 (SC)] has observed as under:- "Although it was held by the Constitution Bench in the case of Sultan Brothers (1964) 51 ITR 353 (SC) that whether a particular letting is business has to be decided in the circumstances of each case and that each case has to be looked at from a businessman's point of view t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) the assessee is not the owner of the property but only a tenant and it had sublet the property, (ii) the assessee had let out the equipment along with the property. The CIT(A) accepted the contention of the assessee and it was the owner of the factory building. The CIT(A), however, after examining the lease deed, came to the conclusion that the rental income from letting out of factory building and rental income received from letting out of equipment is a composite transaction and inseparable. 9.2 The details of tenants, the rental income earned from property and rental income earned from leasing of equipment for assessment years 2005-2006 to 2007-2008, 2012-2013 and 2013-2014 are as follows:- AY Tenants Property rental Equipment ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is seen that the description of entire property is given in the first schedule. The description of portion of factory premises which was let out for sub-lease is mentioned in the second schedule of the lease agreement. The description of the equipment leased out is given in the third schedule. The fourth schedule of the lease agreement gives the break up of lease rentals. For the entire period concerning assessment year 2005-2006, there is only one sub-lessee, namely, M/s.Terex Vectra Equipment (Private) Limited. All the lease agreements entered by the assessee with other lessee's for other A.Y.'s are identical. It is clearly seen from the perusal of the lease agreements that the rental income, both from property as well as equipment let ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from other sources, as the case may be. 9.5 The Hon'ble jurisdictional High Court in the case of D.R.Puttanna Sons Private Limited v. CIT [(1986) 162 ITR 468 (Kar.)] was considering a case of an assessee who had taken a land for lease for 30 years. The assessee thereafter put up a building thereon and the same was let out on rent. The Revenue contended that the assessee being the owner of the property for 30 years, rental income was assessable under the head `income from property' and not as business income, as claimed by the assessee. The Hon'ble jurisdictional High Court decided the issue in favour of the Revenue and held that it is clear and as long as the assessee is the owner of the structure built by it, the income derived from the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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