INCOME TAX OFFICER v. SHEETAL KHURANA FOOD (P) LTD
[Citation -2008-LL-0111-9]

Citation 2008-LL-0111-9
Appellant Name INCOME TAX OFFICER
Respondent Name SHEETAL KHURANA FOOD (P) LTD.
Court ITAT
Relevant Act Income-tax
Date of Order 11/01/2008
Assessment Year 2003-04, 2004-05
Judgment View Judgment
Keyword Tags income from house property • commercial exploitation • private limited company • cost of construction • income from business • statutory deduction • commercial purpose • immovable property • business activity • show-cause notice • source of income • commercial asset • rental receipts • lease agreement • business asset • condensed milk • rental income • annual value • monthly rent • letting out • milk powder • lease deed • lease rent
Bot Summary: The Assessing Officer issued a questionnaire to the assessee, asking it to explain as to why it should not be brought under sections 22 to 25 of the Income-tax Act, and as to why the income received from CFCFIL be considered as income from house property, since the very nature of the receipt was rental income and the case appeared to be covered against the assessee in view of the decision of the Hon'ble Supreme Court in the case of Shambhu Investment Ltd. A show-cause notice was also issued. The assessee also contended that the assessee had given only the building on lease; that no security of advance covering the entire cost of construction had been received; that no relationship of landlord and tenant existed between the assessee and CFCFIL, since the assessee was holding the property not as owner, but only on lease rent basis; that no house property statutory deduction on the rent could be claimed by the assessee, the assessee not being the owner of the property; that the lease to CFCFIL was only a temporary arrangement; and that numerous case laws, as cited by the assessee, supported its case. The learned CIT(A) reversed the order of the Assessing Officer mainly for the reasons that the assessee had applied for Pub licence, in keeping with its main object of running hotel and restaurant and that since the said licence was not granted, the assessee let out the upper floor of the premises on lease for a limited period only, in order to reduce its expenditure and losses; that the assessee had agreed to the restrictive lease condition of removing its entire building on the expiry of the lease period, which was indicative of the intention of a businessman to exploit its property/asset. In the assessment order, in the narration of the contentions of the assessee too, it does not come out that the assessee ever made out any such case before the Assessing Officer. The assessee having given an unfurnished accommodation on lease also does not help the case of the assessee. The assessee has tried to raise this also does not help the case of the assessee. Apropos the assessee's contention that it was in the line of hoteling, the Assessing Officer made a specific observations as under:-...Secondly, the assessee contended during assessment proceedings that it is in the line of hoteling but there is no other business of the assessee, rather there is no other activity of the assessee at all during the relevant period.


Per A.D. Jain, Judicial Member: These are department's appeals for assessment years 2003-04 and 2004-05. facts remaining similar, they are, for facility, being taken from ITA No. 468(ASR.)/2006. 2. department contends that learned CIT(A) has erred in directing Assessing Officer to treat income of assessee as business income rather than income from house property, ignoring decision of Hon'ble Supreme Court in case of Shambhu Investment (P.) Ltd. v. CIT [2003] 263 ITR 143. 3. facts are that for assessment year 2003-04, assessee had filed return of income on 16-10-2003 declaring net taxable income of Rs. 1,84,380. source of income was rent of building, received from M/s. Citi Financial Consumer Finance India Ltd. ('CFCFIL', for short), at Rs. 8,64,000. Assessing Officer issued questionnaire to assessee, asking it to explain as to why it should not be brought under sections 22 to 25 of Income-tax Act, and as to why income received from CFCFIL be considered as income from house property, since very nature of receipt was rental income and case appeared to be covered against assessee in view of decision of Hon'ble Supreme Court in case of Shambhu Investment (P.) Ltd. (supra). show-cause notice was also issued. In response, assessee sought to distinguish Shambhu Investment (P.) Ltd.'s case (supra). It was submitted that in that case, there was one lease in respect of building and another in respect of furniture; that in assessee's case, assessee had provided only building on lease and no furniture or other amenities were provided; that in that case, from agreement, it had appeared that intention of parties was clear, whereby landlord had allowed occupant to enjoy table space on payment comprehensive monthly rent, whereas in assessee's case, assessee had not provided any table space with comprehensive monthly rent; that in Shambhu Investment (P.) Ltd.'s case (supra), building and furniture were accepted as inseparable, whereas in assessee's case, only lease of building was given and no furniture was provided; that, therefore, it had been held in that case that prime object of assessee under agreement was to let out portion of property to various occupants by giving them additional right of using furniture and fixtures and other common facilities, for which, rent was being paid month by month, in addition to security advance covering entire cost of immovable property, whereas in assessee's case, no security advance covering entire cost of immovable property was recovered from occupants; that in assessee's case, no relationship of landlord and tenant existed, since assessee was holding property on lease rent basis only and lease to CFCFIL was virtually subletting of property; that assessee was not owner of property and it was holding same on lease rent basis from Shri Bipindeep Singh, whereas in 'Shambhu Investment (P.) Ltd.' company was owner of property; that assessee had provided unfurnished accommodation to occupant, whereas in Shambu Investment (P.) Ltd.'s case (supra), company had provided furnished accommodation to different occupants; that whereas in that case, company had recovered entire cost of construction from different occupants, as interest-free security, assessee had not recovered any cost of construction from occupant; that in that case, company had let out premises for permanent period, whereas assessee had let out property only temporary, for short period; that assessee could not claim statutory deduction of household property, since it was not owner of property, while in Shambhu Investment (P.) Ltd.'s case (supra), such was not case; and that it could not be said that assessee was not exploiting property for its commercial business activity, which was its prime motto, whereas letting out property was consequential one. assessee, in favour of its case, relied on numerous case laws, as discussed in assessment order. 4. Assessing Officer, however, disagreeing with assessee, observed that in Shambhu Investment (P.) Ltd.'s case (supra), Hon'ble Supreme Court had only upheld that even if assessee used property commercially by entering into more than one lease, intention of making lease had to be looked into; that in case of present assessee, it was clear that intention of assessee was to give property on long lease, as lease agreement was for more than nine years, though initial period of lease was of three years; that ratio of Shambhu Investment (P.) Ltd.'s case (supra) was squarely applicable to case of assessee and income of assessee was taxable as income from house property and not as income from business, as claimed; that it was incorrect to say that assessee was not owner of property; that in agreement with CFCFIL, it had been categorically stated that assessee was absolute owner in possession of premises; that fact of assessee's ownership of property was further supported by fact that assessee had also claimed depreciation and expenses on repairs of building; that assessee was entitled to receive income from property in its own right and, therefore, section 22 of Income-tax Act was attracted; that in case of assessee, agreement with Shri Bipindeep Singh Khurana, Director of Company, provided for dismantling of structure without any compensation from Shri Khurana; that it was not necessary for levy of tax under section 22 of Act, that building and land thereon must belong to one and same person; that thus, lessor- owner of building was to be taxed in respect of annual value of such building, as owner thereof, under section 22 of Act; that fact that assessee had given only unfurnished building to CFCFIL, went against assessee and rather made case ker for department that assessee's rental receipt was taxable as income from house property; that as per para 7 of agreement with CFCFIL, CFCFIL could not, without prior consent of assessee, construct any wooden or concrete partition, structure for installation of any electric equipment required for smooth functioning of lease, including but not limited to air conditioners; that fact that assessee had not recovered any cost of construction from occupant did not help case of assessee, since in Shambhu Investment (P.) Ltd.'s case (supra), where assessee gave furnished accommodation on lease, it had been held that receipt was to be treated as income from house property; that in case of assessee, undisputedly, entire building had been constructed by assessee; that assessee being owner of property and lease being not for temporary period, fact that assessee had not recovered entire cost of construction from occupant, was of no relief to assessee; that there was no recovery of entire cost of premises by landlord and admittedly, Shri Bipindeep Singh Khurana had been showing rental receipt from assessee-company, as his income from house property; that assessee was wrong in contending that it had temporarily let out building for short period; that initial duration of lease was for three years, which had been extended for further period of three years, as per letter of tenant, dated 22-12-2005, with 20 per cent enhancement; that even initial agreement was for nine years; that further, assessee had wrongly contended that it was in line of hoteling; that during entire relevant period, there had been no other business activity of assessee, but for lease under consideration; that all receipts of company were on account of rent only; that main objects of company did not include hotel/restaurant business; that assessee was, in fact, owner of property, but it had wrongly contended that it could not claim statutory deduction of house property, as it was not owner of property and was holding it only on lease rent basis; that it could not be said that assessee was exploiting property for its commercial business activity, which activity was its prime object, whereas letting out of property was secondary object; that moreover, assessee had itself reflected receipt of rent as income from house property; and that as such, said income was required to be taxed as income from house property. 5. On appeal, assessee contended before learned CIT(A) that it was Private Limited Company, incorporated in 1999; that its main object was of running business of hotel and restaurant; that to carry out such object, assessee entered into five years' lease agreement on 1-4-2000 with Dr. Bipindeep Singh Khurana, its director, for lease of building at rate of Rs. 1,50,000 per year; that assessee has constructed hotel and restaurant on said leased land; that thereafter, assessee applied for licence of pub for running its business; that copy of application for such licence before AETC, Ludhiana had been duly submitted to Assessing Officer; that grant of licence of pub was delayed due to one reason or another, resulting in increase in burden of expenditure; that assessee temporarily let out one floor of hotel premises, for commercial purposes, so as to reduce losses and expenses; that assessee entered into agreement with CFCFIL, for period of three years; that Assessing Officer treated commercial business income of assessee as house property income by relying on decision of Hon'ble Supreme Court in case of Shambhu Investment (P). Ltd. (supra); that assessee had distinguished said decision before Assessing Officer; that however, Assessing Officer had not accepted assessee's explanation; and that assessee was relying on numerous case laws [which assessee proceeded to put forth before learned CIT(A), as discussed in impugned order]. 6. In impugned order, learned CIT(A) observed that Assessing Officer had wrongly observed in assessment order that main objects of assessee-company did not include hotel/restaurant business, whereas while reproducing main objects of assessee-company, Assessing Officer h d himself reproduced objects showing that business of hotel/restaurant was one of main objects of assessee-company; that it was only plot of land which was given to assessee-company on lease for five years at Rs. 1,50,000 per year; that assessee could raise superstructure on building; that, however, such superstructure was to be removed by assessee-company on its own, on determination of lease with Dr. Bipindeep Singh Khurana, Director of Company; that this had to be read in conjunction with lease of upper floor of superstructure by assessee to CFCFIL, as per which, upper floor, and not ground floor, was to be used for commercial purposes only by CFCFIL, on lease rent of Rs. 8,64,000; that there was considerable force in submission of assessee that these facts were indicative of commercial exploitation of property at hands of assessee with view to earn profits from business asset and that these actions were not those of mere house property owner, who would never agree to remove superstructure at expiry of short lease period; that decision in Shambu Investment (P.) Ltd.'s case (supra) was distinguishable and its distinguishing features could not be ignored or brushed aside; that in CIT v. Anand Rubber & Plastics (P.) Ltd. [1989] 178 ITR 301 (Punj. & Har.), it was held that where assessee was using entire premises for running its factory and due to heavy losses, production was reduced and to minimise losses, assessee leased out rear portion of premises, such leasing was temporary and as commercial asset and that income from letting out of such portion of building was, therefore, assessable as business income; that in CIT v. Golden Engg. Works [1997] 97 TAXMAN 348 (Punj. & Har.), it was held that where premises were let out for commercial purpose, with motive to reduce burden of expenditure and to reduce loss, rental income was assessable as business income; that in Golden Engg. Works' case (supra), period of lease was 90 years and still, it had been held that letting out was not permanent and income was assessable as business income; that whereas, in case of assessee, lease was only for three years renewable up to maximum of nine years; that pub licence from Excise & Taxation Commissioner was valid and relevant evidence in support of assessee's stand; that since very inception of company, it was to run pub and hotel on plot of land and that since pub license did not materialise, in order to reduce its expenditure and loss, assessee had no choice but to let out upper floor of building on lease, for limited period only; that actions of assessee certainly part took of those of businessman exploiting his property/asset, as explained and to reduce losses due to non-completion of hotel/restaurant project; that it is motive, intention and actual activity of assessee in dealing with property, which is relevant; that action of assessee in applying for pub licence threw clear light on its motive of running of hotel/restaurant and serving drinks; that assessee's action in further leasing out only upper floor, and not whole property, for short limited period and in further agreeing to lease condition of removing entire building on expiry of lease period, were actions of businessman exploiting his property/assets, cutting his loss/expenses; that tax treatment for relevant year, i.e., assessment year 2003-04 in its books of account, supported stand of assessee; that by virtue of assessee's application for Bar (Pub) Licence was very relevant fact, which had not been discussed by Assessing Officer in assessment order, but which directly supported stand of assessee; that no house owner would take on lease plot of land, construct building thereat and agrees to remove it at conclusion of relatively short lease period of nine years; that it was also not necessary for assessee to have number of activities and sources of income to prove that it was commercially exploiting at one of its assets; and that in view of these circumstances, action of Assessing Officer in assessing income as income from house property, could not be upheld. As such, learned CIT(A) directed Assessing Officer to treat income of assessee as business income rather than income from house property. 7. Aggrieved, department has filed present appeal. 8. Challenging impugned order, learned DR has argued before us that learned CIT(A) has erred in directing Assessing Officer to treat income of assessee as business income, whereas such income in fact falls under head of 'Income from House Property'; that learned CIT(A) has erred in ignoring decision of Hon'ble Supreme Court in case of Shambhu Investment (P.) Ltd. (supra); that learned CIT(A) has erred in placing reliance on Anand Rubber & Plastics (P.) Ltd.'s case (supra) and Golden Engg. Works' case (supra), whereas facts of neither of these cases are similar to facts of present case; that learned CIT(A) has erred in observing that pub licence application made by assessee to Excise & Taxation Commissioner is valid evidence in support of assessee's contention that its motive since very inception of company was of running pub and hotel on property in question; that factum of such licence having been applied for was never stated by assessee before Assessing Officer; that thus, Assessing Officer never went into this aspect of matter; that learned CIT(A) did not provide Assessing Officer with any opportunity to rebut this contention of assessee; that even copy of such application for Bar (Pub) licence was never brought on record of Assessing Officer during assessment proceedings, as stated in statement of facts filed before this Bench; that factum of assessee simply having applied for Bar (Pub) licence, if any, is not sufficient; that assessee has not given any reason for non-issuance of pub licence by concerned department; that assessee has failed to show as to how losses had been incurred by it; that learned CIT(A) has erred in not taking into consideration fact that initial agreement of assessee with its Director was for five years and that agreement with CFCFIL was for nine years, which was not at all possible; that moreover, assessee had claimed depreciation on building, depicting that it treated itself as owner thereof; and that learned CIT(A) has further erred in relying on facts that assessee had leased out only upper floor of building for short limited period, that assessee had agreed to restrictive lease condition of removing its entire building on expiry of the restrictive lease condition of removing its entire building on expiry of lease period, and tax treatment given by assessee for year under consideration in its books of account. learned D.R. has thus requested that appeal of department be allowed, order passed by learned CIT(A) be set aside and that of Assessing Officer be revived. 9. On other hand, learned counsel for assessee, supporting impugned order, has stated that Assessing Officer had erred in treating business income of assessee as its income from house property; that learned CIT(A) correctly rectified this error by virtue of impugned order; that there is no parity of facts of present case with those of Shambhu Investment (P.) Ltd.'s case (supra); that facts of case further are in pari materia with Anand Rubber & Plastics (P.) Ltd.'s case (supra) and Golden Engg. Works' case (supra); that running of business of hotel and restaurant was one of main objects of assessee-company; that assessee, in accordance with such main object, applied for pub licence; that copy of application for said licence was duly submitted before Assessing Officer; that grant of licence of pub was delayed for one reason or another, resulting in increase in burden of expenditure of assessee; that to reduce burden of losses and expenditure, assessee temporarily let out upper floor of premises for commercial purposes, to CFCFIL for period of three years; that Shambhu Investment (P.) Ltd.'s case (supra) was entirely different on facts and was wrongly applied against assessee by Assessing Officer; that other case laws, which assessee was citing, were in its favour; that assessee was not owner of property and was holding it on lease rent basis from its director, Dr. Bipindeep Singh Khurana; that assessee had provided unfurnished accommodation to occupant; that assessee had not recovered any cost of construction from occupant; that assessee could not claim statutory deduction of household property, since it was not owner of property and was holding it only on lease rent basis; and that as such, income earned was not income from house property, but was business income of assessee and that order of learned CIT(A) is entitled to be maintained, whereas appeal filed by department is liable to be dismissed. 10. We have heard parties and have perused material on record. question here is as to whether income earned by assessee has been rightly directed by learned CIT(A) to be assessed as business income of assessee and not its income from house property. undisputed facts are that assessee is Private Limited Company, incorporated in 1999, with Dr. Bipindeep Singh Khurana as one of its directors. main objects of company are as follows:- ' 1. To manufacture, process, import, export, buy, sell and otherwise deal in milk, butter, cream, ghee, cheese, condensed milk, malted milk, milk powder, skimmed milk, powder milk, ice-cream, milk foods, baby foods, confectionery items, sea foods, agriculture products of all kinds including soya milk protein foods spray dried milk, protein foods and other preparations of soya, cereals and lentils including flour and dal, soya snak foods, nutrias, soya sweets, soya weaning food flavoured with fruits and vegetables and soya beverages and other products and preparations of every kind, nature and descriptions. 2. To sell, import, export, improve, prepare, manufacture and market and generally to carry on manufacturing and trading in jams, jelleys, pickles, cider, spices, chutney, marmalades, vinegars, ketchups, juices, squashes, syrups, powders (edible) drinks, beverages, gelatives, essences, ice-creams, milk preparation, meat, sausages, porkpies, prawn, potted meats, table delicacies and other eatables. 3. To carry on business as manufactures, sellers, purchases, importers, exporters, stockists, distributors, traders, dealers, wholesalers and retailers in all kinds of food snacks fruit juices, breads, biscuits, syrups, cordial, jam, jellies. 4. To carry on business of hotels, restaurant and canteens and to serve food, fast food, drinks, soft drinks of all types and to operate recreation centre of all types.' 11. On 1-4-2000, assessee-company entered into lease deed-cum- agreement with Dr. Bipindeep Singh Khurana, Director, for taking on lease land measuring about 438 sq. yards, located at Pakhowal Road, Ludhiana. property was taken on lease for initial period of five years. terms and conditions of lease agreement included condition that assessee was permitted to raise construction on plot, with condition that assessee would remove said structure at its own cost and would not be entitled to any compensation on this account. On 21-9-2001, assessee-company entered into lease deed with CFCFIL, giving building constructed on aforesaid plot to CFCFIL, for initial period of three years, as per following terms and conditions:- (i) lease agreement is for initial period of three years commencing from 21-12-2001 and shall be extended for another terms of three years on 20 per cent enhancement of existing rent. As per agreement, lease shall stand terminated on expiry of nine years and assessee-company will be given back vacant premises and terrace thereon. (ii) Premises will be for commercial use only and if any charges/duties/taxes/penalties etc. imposed by any authority will be borne by tenant in this case i.e. Associates India Financial Services Pvt. Ltd. (presently known as City Financial Consumer Finance India Ltd.) Corporation Tax at rate of 12 per cent approximate will be borne by tenant company.'. 12. On query by Assessing Officer as to why rent received by assessee from aforesaid premises should not be treated as income from house property of assessee, in accordance, with Shambhu Investment (P.) Ltd.'s case (supra), assessee contended that its case was entirely different from Shambhu Investment (P.) Ltd.'s case (supra), on facts. assessee also contended that assessee had given only building on lease; that no security of advance covering entire cost of construction had been received; that no relationship of landlord and tenant existed between assessee and CFCFIL, since assessee was holding property not as owner, but only on lease rent basis; that no house property statutory deduction on rent could be claimed by assessee, assessee not being owner of property; that lease to CFCFIL was only temporary arrangement; and that numerous case laws, as cited by assessee, supported its case. Assessing Officer, however, for reasons recorded in assessment order, as discussed herinabove, disagreeing with assessee, brought to tax income as income from house property. learned CIT(A) reversed order of Assessing Officer mainly for reasons that assessee had applied for Pub licence, in keeping with its main object of running hotel and restaurant and that since said licence was not granted, assessee let out upper floor of premises on lease for limited period only, in order to reduce its expenditure and losses; that assessee had agreed to restrictive lease condition of removing its entire building on expiry of lease period, which was indicative of intention of businessman to exploit its property/asset. In doing so, learned CIT(A) placed reliance on Anand Rubber & Plastics (P.) Ltd.'s case (supra) and Golden Engg. Works' case (supra). 13. We, however, do not find ourselves persuaded to agree with order o f learned CIT(A). Undoubtedly, as held repeatedly by various Courts, including Shambhu Investment (P.) Ltd.'s case (supra), it is intention of assessee in letting out property, which is determinative of nature of income. This, obviously, depends on facts of each case. In present case, first of all, assessee never contended before Assessing Officer that it had applied for Bar (Pub) licence. There is no discussion in this regard in assessment order. learned CIT(A) has also taken objection to such fact. However, in assessment order, in narration of contentions of assessee too, it does not come out that assessee ever made out any such case before Assessing Officer. Before us, on our asking, learned counsel for assessee could not deny that no such argument was raised before Assessing Officer. Further, stand of assessee that it was not owner of property, has also been proved to be incorrect. Before Assessing Officer, assessee denied such ownership. However, it was found that in agreement with CFCFIL, assessee had stated that it was absolute owner i n possession of property in question. Further, assessee had also claimed depreciation and expenses on account of repairs of building. As such, assessee was undisputedly owner of premises leased out, so far as regards income-tax purposes and was to be taxed in respect of annual value of such building, under section 22 of Act. 14. assessee having given unfurnished accommodation on lease also does not help case of assessee. assessee has tried to raise this also does not help case of assessee. assessee has tried to raise this as point of distinction with Shambhu Investment (P.) Ltd.'s case (supra). As discussed hereinabove, what is to be seen is intention of assessee in letting out premises. Here, though running of hotel/restaurant was one of its main objects, such main object was never shown to have been carried out during year under consideration. 15. assessee also sought to distinguish Shambhu Investment (P.) Ltd.'s case (supra), for reason that it had not recovered cost of construction from occupant and that letting out of premises was only temporary arrangement. In this regard, Assessing Officer rightly observed that this makes no difference and that even Dr. Bipindeep Singh Khurana had not recovered entire cost of construction from assessee and he had been showing income from rental receipts from assessee as income from house property. Regarding argument of temporary arrangement, initial duration of agreement was of three years, which was extended for further period of three years, with 20 per cent enhancement. This was arrangement of assessee with Dr. Bipindeep Singh Khurana. On other hand, lease by assessee to CFCFIL was for nine years, which goes directly against lease entered into by Dr. Bipindeep Singh Khurana with assessee. assessee obviously could not lease out premises for period longer than that for which it was itself leased out premises. 16. Apropos assessee's contention that it was in line of hoteling, Assessing Officer made specific observations as under:-. . .Secondly, assessee contended during assessment proceedings that it is in line of hoteling but there is no other business of assessee, rather there is no other activity of assessee at all during relevant period. Profit and loss account of assessee-company for financial year 2001-02 (rent receipts of Rs. 6,06,000) and 2002-03 (rent receipts of Rs. 8,64,000) reveal that all receipts of company are on account of rent only. Admittedly first year of company was assessment year 2002-03 and this is evident from agreement also, as discussed above. So how come question of company having main business of hoteling? Moreover main objects to be pursued by company on its incorporation have already been re-produced above and establish that main objects of company does not include hotel/restaurant business. So contention of assessee that it has given on rent building as temporary arrangement is not only misleading but also untrue as per conduct of business of company so far.' 17. From above, it is evident that assessee did not carry on business of running of hotel/restaurant during year. Though, as rightly observed by learned CIT(A), Assessing Officer went wrong in observing that main object of assessee-company did not include hotel/restaurant business, fact remains that even though this was one of main objects of assessee-company, it did not carry on any such business. 18. Then, case laws relied on by learned CIT(A) to decide in favour of assessee, are different on facts. In Anand Rubber & Plastics (P.) Ltd.'s case (supra), it was, inter alia, held that assessee had leased out portion of its premises to minimise its losses. No such fact, as discussed hereinabove, was brought before Assessing Officer by present assessee. 19. In Golden Engg. Works' case (supra), it was held that finding recorded by Dy. CIT(A), which was upheld by Tribunal, was to effect that old premises were let out for commercial purposes and to reduce burden of expenditure and losses; that this was finding of fact; and that, therefore, no referable question of law arose from order of Tribunal. Here again, it is to be reiterated that present assessee nowhere made out any case before Assessing Officer as to how it had suffered any losses. Therefore, this case is also not applicable. 20. Shambhu Investment (P.) Ltd.'s case (supra), learned CIT(A) has failed to consider, is squarely applicable to present case. Therein, it was upheld that it was intention in making lease, that was important. In present case, no intention was ever evinced by assessee before Assessing Officer regarding either commercial exploitation of asset, i.e., t h e building, or about intention of not exploiting it as house property. Rather, assessee itself reflected receipt of rent as income from house property. Even factum of assessee having claimed depreciation and expenses regarding repair of building showed that it was owner of premises for purposes of Income-tax Act. 21. In view of above, finding force in grievance raised by department, same is hereby accepted. appeal of department is thus entitled to be accepted. Ordered accordingly. 22. As stated in opening para of this order, facts of ITA No. 468 (ASR.)/2006 and ITA No. 130 (ASR.)/2007 are similar. As such, our above observations shall, mutatis mutandis, apply to ITA No. 130 (ASR.)/2007 also. 23. In result, both appeals filed by department are allowed. *** INCOME TAX OFFICER v. SHEETAL KHURANA FOOD (P) LTD.
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