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TMI Blog1977 (3) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ispute is, whether the income derived from letting out of the buildings is to be computed under section 22 or 28 or 56 of the Income-tax Act, 1961, i.e., whether it should be taxed as income from house property or income from business or income from other sources. The Income-tax Officer has taxed the income as income from house property under section 22. In the Income-tax Officer's assessment order we find three items, viz., (1) Gross rental ; (2) Lift charges received ; and (3) Air-conditioning charges received. The total of the three is Rs.11, 17,679. Then the Income-tax Officer gives deductions in respect of (a) electric charges ; (b) lift upkeep expenses ; (c) water charges ; and (d) air-conditioning charges. He has also allowed other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew is that the assessee's income has to be taxed under section 22, that is, income from house property. The following questions have been referred to us : " (1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the income derived from letting out of the building is properly to be computed under section 22 and not under section 28 or under section 56 of the Income-tax Act, 1961 ? (2) Whether, on the facts and in the circumstances of the case, the lift charges and the air-conditioning charges should be separately assessed under section 56 of the Income-tax Act, 1961 ? " Section 56 (that is, income from other sources) of the Income-tax Act, 1961, relevant for our purposes, is as follows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain amenities like lift services and air-conditioning, there cannot be any question of letting of machinery, plant or furniture. In this connection reference may be made to a judgment of the Kerala High Court in Dr. P. A. Varghese v. Commissioner of Income-tax [1971] 80 ITR 180 (Ker). The assessee in this case agreed to let out the second floor of a building for a rent of Rs. 2,350 per month agreeing to provide for partitions, necessary lavatories, closets, etc, air-conditioning for one room, one fluorescent tube fitting, separate electric meters, uninterrupted water supply and electric lift. The assessee contended that the above agreement evidenced a hire of machinery, plant and furniture along with the building and that the income recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the air-conditioning and cooling plant or the lift. The lessor or the assessee only undertook to instal, erect and fit up and operate and work an adequate and sufficient air-conditioning and cooling plant for air-conditioning and cooling the demised premises and to instal, fit up and maintain and operate one lift in the said building for the purposes of ingress to and egress from the demised premises. Neither the air-conditioning plant and equipment nor the lift had been let out to the tenant. There was, of course, a condition in the lease for installing, fixing and fitting in some ceiling fans with switches and regulators for the use of the lessee and these may be considered to have been let out to the tenants along with the portion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s claimed to be a sample of rent bills made out for all the tenants and showed the different items of the charges made. The particular bill, however, was found to show only one charge, that is, for rent only. It is submitted at the hearing of the miscellaneous application that that was only a specimen copy relating to the year 1955 while the year under consideration was the year 1962 and the facts were different. Attention is drawn to page 259 of the paper book wherein the lease agreement is reproduced and it is pointed out that there was a surcharge provided for in respect of the air-conditioning plant at the rate of Rs. 10 per sq. ft. per month. Further, referring to page 255 of the paper book it is pointed out that there was a statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was chargeable for the premises and also fans and other fittings. The Tribunal held that the hire was for part of the buildings and for fans, etc., if any, and not for hire of air-conditioning plant or the lift. In regard to hire of fans, particulars to show how much was collected had not been placed by the assessee and even considering that there was realisation in this respect, the Tribunal held that the letting of fans could not be held to be inseparable from the letting of the building. In regard to the other items in the bill, it was seen that these included air-conditioning surcharge and lift charges and according to the Tribunal there was no hire of air-conditioning plant or the lift. The Tribunal's finding was that the air-condit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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