ACIT, Faridabad V. M/s. Kanwaljeet Singh (HUF), Faridabad

ITA 856/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3572 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 04-05-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 03-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DEVENDRA SINGH; B K GUPT A SR D
• Assessee Lawyers: M K GUPTA
• Keywords: Business income; Set aside
• Section: 143(3); 147; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH D DELHI ] BEFORE SHRI C. L. SETHI, JM & SHRI K. D. RA NJAN, AM I. T. APPEAL NO. 856 (DEL) OF 2010. ASSESSMENT YEAR : 2001-02. ASSTT. COMMISSIONER OF INCOME-TAX, M /S. KANWALJEET SINGH [ HUF ]; C I R C L E : 2, VS. PLOT NO. 18, SECTOR : 24, F A R I D A B A D. F A R I D A B A D. P A N / G I R NO. AABHK 0074 R. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI M. K. GUPTA, C. A.; DEPARTMENT BY : SHRI DEVENDRA SINGH, SR. D.R.; & SHRI B. K. GUPT A, SR. D. R.; O R D E R. PER K. D. RANJAN, AM : THIS APPEAL BY THE REVENUE FOR ASSESSMENT YEAR 2001 -02 ARISES OUT OF ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEALS), FARIDABAD. . 2. THE GROUNDS OF APPEAL RAISED ARE AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT (APPEALS) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDIT ION OF RS.7,23,918/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDER ASSESSED INCO ME BY WRONGLY SHOWING THE BUSINESS INCOME INSTEAD OF RENTAL INCOME DISREGARDI NG THE FACT THAT IT WAS NOT THE BUSINESS OF THE ASSESSEE TO PROVIDE LAND AND BUILDI NG ON LEASE AND THE COMPANY 2 I. T. APPEAL NO. 856 (DEL) OF 2010. M/S. NEELAM CABLE MANUFACTURING CO. FROM WHOM THE A SSESSEE HAD TAKEN THE PROPERTY ON LEASE WAS THE SISTER CONCERN OF THE ASS ESSEE; 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (APPEALS) HAS ERRED ON FACTS AND IN LAW IN TREATING THE ASSES SEES INCOME FROM BUSINESS INSTEAD OF INCOME FROM HOUSE PROPERTY EVEN THOUGH T HE ASSESSEE HAD HIMSELF SHOWN BY RENT RECEIVED IN RECEIPTS SIDE OF THE PR OFIT AND LOSS ACCOUNT FILED WITH THE RETURN OF INCOME. 3.1 THE ONLY ISSUE FOR CONSIDERATION RELATES TO DEL ETING THE ADDITION OF RS.7,23,980/- ON THE GROUND THAT THE SAME WAS ASSESSABLE AS BUSINESS INC OME. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT THE ORIGINAL ASSESSMENT WAS MADE UNDER SECTION 143(3) OF THE I. T. ACT, 1961 WHEREIN INCOME FROM HOUSE PROPERTY WAS TREATED AS BUSINESS INCOME. THE ADDITIONS MADE BY THE ASSESSING OFFICER WERE CONFIRMED BY LD CIT(A) EXCEP T ALLOWING THE RELIEF OF RS.54,208/-. ON FURTHER APPEAL BEFORE THE ITAT, THE MATTER WAS REST ORED TO THE FILE OF THE LD. CIT (A) FOR DECIDING THE ISSUE AFRESH. MEANWHILE, THE ASSESSING OFFICER RE-OPENED THE ASSESSMENT UNDER SECTION 147 READ WITH PROVISIONS OF SECTION 148(2) OF THE ACT O N THE GROUND THAT THE ASSESSEE HAD WRONGLY SHOWN RENTAL INCOME OF RS.17,41,200/- FROM HOUSE PR OPERTY AS BUSINESS INCOME. BEFORE ASSESSING OFFICER IT WAS SUBMITTED THAT THE ASSESSE E HAD TAKEN PROPERTY ON LEASE FROM M/S. NEELAM CABLE MANUFACTURING COMPANY, A SISTER CONCER N AND THE SAID PROPERTY WAS DEVELOPED BY THE ASSESSEE AT ITS COST, WHICH WAS SUBSEQUENTLY LE T OUT. THEREFORE, IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF S.G. MERCANTIL E CORPORATION PVT. LTD. VS. CIT 83 ITR 700 (SC) THE RENTAL INCOME WAS ASSESSABLE UNDER THE HEA D BUSINESS AS THE ASSESSEE WAS NOT THE OWNER OF THE PROPERTY. THIS CONTENTION OF THE ASSESSEE W AS NOT ACCEPTED BY THE ASSESSING OFFICER ON THE GROUND THAT RENTAL INCOME WAS SHOWN BY THE ASSESSEE IN THE PROFIT AND LOSS ACCOUNT. SINCE THE ASSESSEE WAS NOT ENGAGED IN THE BUSINESS OF PROVIDI NG LAND AND BUILDING ON LEASE, THE AMOUNT RECEIVED AS RENTALS WAS ASSESSABLE UNDER THE HEAD I NCOME FROM HOUSE PROPERTY. 3.2 BEFORE LD. CIT (APPEALS) IT WAS SUBMITTED THAT THE ASSESSEE WAS NOT THE OWNER OF THE PROPERTY, WHICH WAS THE BASIC CONDITION FOR TREATIN G THE INCOME FROM HOUSE PROPERTY. IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAD DEVELOPED THE PROPE RTY AND PROVIDED OTHER SERVICES LIKE SERVICES OF GARDENER, SERVICES OF SECURITY, SERVICES OF WATE R, SERVICES OF SEWERAGE AND SERVICES OF 3 I. T. APPEAL NO. 856 (DEL) OF 2010. GENERATOR AND, THEREFORE, THE ASSESSEE WAS ENGAGED IN THE LEASING BUSINESS. THE LD. CIT (APPEALS) CONSIDERED THE SUBMISSIONS MADE BY THE AS SESSEE. HE EXAMINED THE CONTENTS OF THE LEASE AGREEMENT DATED 6/09/1995. ACCORDING TO THE L EASE AGREEMENT, M/S. NEELAM CABLE MANUFACTURING COMPANY, FARIDABAD, THROUGH ITS PARTN ER, SMT. KULDEEP KAUR, LEASED OUT THE PROPERTY TO SHRI KAWALJEET SINGH, HUF, THROUGH ITS KARTA SHRI KAWALJEET SINGH, THE LESSEE. THE LEASE CHARGES WERE RECEIVED FROM SUCH PREMISES AND THE TENANCY COMMENCED FROM 6/09/1995 FOR A PERIOD OF 11 MONTHS, WHICH COULD BE EXTENDED BY T HE LESSEE FOR THE PERIOD UPTO 20 YEARS IN ACCORDANCE WITH THE TERMS AND CONDITIONS SPECIFIED IN THE LEASE AGREEMENT. AS PER THE LEASE AGREEMENT, THE RENT PAYABLE WAS RS.12,000/-, WHICH HAS BEEN DECLARED BY THE ASSESSEE IN THE RETURNS FILED FOR EARLIER YEARS. IT WAS ALSO SUBMI TTED THAT THE ASSESSEE WAS NOT THE OWNER OF THE HOUSE PROPERTY. RELIANCE WAS PLACED ON THE DECISIO N OF THE ITAT, RAJKOT BENCH IN THE CASE OF ITO VS. TAJMALBHAI AND COMPANY IN ITA. NOS. 192 TO 194 (RJT.) OF 2005 FOR ASSESSMENT YEARS 1999-2000 TO 2001-02. THE ASSESSEE ALSO PLACED REL IANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF S.G. MERCANTILE CORPN. PVT. LT D. VS. CIT (SUPRA) WHEREIN IT WAS HELD THAT SINCE THE APPELLANT WAS NOT THE OWNER OF THE PROPER TY OR ANY PART THEREOF AND HAD TAKEN THE PROPERTY ON LEASE AND AFTER DEVELOPING THE PROPERTY , LET OUT THE PORTION AS SHOPS / STALLS ETC., THE RENTAL INCOME WAS ASSESSABLE UNDER THE HEAD BUSINES S. THE FACTS OF THE CASE BEING IDENTICAL TO THE CASE LAWS RELIED UPON BY THE ASSESSEE; THE LD. CIT (A) CAME TO THE CONCLUSION THAT THE RENTAL INCOME WAS ASSESSABLE AS BUSINESS INCOME AS THE ASS ESSEE WAS NOT THE OWNER OF THE PROPERTY. HE ALSO NOTED THAT THE ASSESSING OFFICER WHILE PASSING THE ORDER UNDER SECTION 143(3) / 147, HAD ALLOWED THE EXPENSES OF SALARY, LEASE CHARGES, BUIL DING REPAIRS, CAR RUNNING EXPENSES AND OTHER EXPENSES AS THE EXPENDITURE PERTAINING TO ITS BUSIN ESS. THE LD. CIT (A) ALSO OBSERVED THAT THE PREMISES WERE LOCATED IN INDUSTRIAL AREA AND IT WAS AN INDUSTRIAL PLOT FOR ALL PURPOSES, WHICH COULD NOT BE USED AS RESIDENTIAL BUILDING UNDER THE STATUTE OF RELEVANT GOVERNING BODIES. THEREFORE, THE INCOME FROM LEASE CHARGES WAS ASSE SSABLE UNDER THE HEAD BUSINESS AND NOT UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE LD. CIT ( A) ACCORDINGLY HELD THAT THE RENTAL INCOME WAS ASSESSABLE UNDER THE HEAD BUSINESS AND NOT UNDE R THE HEAD INCOME FROM HOUSE PROPERTY. 4. BEFORE US THE LD. SR. DR SUBMITTED THAT IT IS IN CORRECT TO SAY THAT THE INCOME FROM THE INDUSTRIAL PROPERTY CANNOT BE ASSESSED UNDER THE HE AD HOUSE PROPERTY. THERE IS NO DISTINCTION 4 I. T. APPEAL NO. 856 (DEL) OF 2010. BETWEEN A COMMERCIAL PROPERTY AND RESIDENTIAL PROPE RTY, IF THE INCOME IS DERIVED AS RENT FROM SUCH PROPERTIES. HE PLACED RELIANCE ON THE DECISIO N OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. CHENNAI PROPERTIES AND INVESTMENTS LTD. 266 ITR 685 (MAD). ON THE OTHER HAND, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS NOT THE OWNER OF THE PROPERTY AND, THEREFORE, THE RENTAL INCOME RECEIVED BY THE ASSESSEE WAS ASSE SSABLE AS INCOME FROM BUSINESS AND NOT FROM HOUSE PROPERTY. HE SUPPORTED THE ORDER OF THE LD. CIT (APPEALS). 5.1 WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. FROM THE FACTS STATED ABOVE, IT IS CLEAR THAT THE ASSESS EE HAD OBTAINED PROPERTY FROM M/S. NEELAM CABLE MANUFACTURING CO., FARIDABAD, AND HAD DEVELOPED THE SAME. AFTER DEVELOPMENT THE ASSESSEE HAS RECEIVED LEASE RENTALS BY LETTING OUT THE PROPERTY. THE QUESTION TO BE DECIDED IS WHETHER LEASE RENTALS RECEIVED BY THE ASSESSEE ARE ASSESSABLE AS INCOME FROM HOUSE PROPERTY OR INCOME UNDER THE HEAD BUSINESS OR PROFESSION. UNDER SECTION 22 OF THE I. T. ACT, 1961 THE ANNUAL VALUE OF THE PROPERTY CONSISTING OF ANY BUILDING OR LAND OR LAND S APPURTENANT THERETO OF WHICH THE ASSESSEE IS THE OWNER SHALL BE CHARGEABLE TO INCOME-TAX UNDER T HE HEAD INCOME FROM THE HOUSE PROPERTY. FROM THE LANGUAGE EMPLOYED IN SECTION 22 IT IS CLEA R THAT IN ORDER TO BRING AN INCOME TO TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY THE ASSESSEE SHALL BE THE OWNER OF THE BUILDING OR LAND APPURTENANT THERETO. THE EXPRESSION OWNER OF HOUSE PROPERTY HAS BEEN DEFINED UNDER CLAUSES (I); (II); (III); (IIIA); AND (IIIB) OF SECTION 27 OF THE ACT. THESE CLAUSES OF SECTION 27 ARE REPROD UCED AS UNDER:- 27. FOR THE PURPOSES OF SECTIONS 22 TO 26 (I) AN INDIVIDUAL WHO TRANSFERS OTHERWISE THAN FOR ADEQUATE CONSIDERATION ANY HOUSE PROPERTY TO HIS OR HER SPOUSE, NOT BEING A TRANSFER IN CONNECTION WITH AN AGREEMENT TO LIVE APART, OR TO A MINOR CHILD NOT BEING A MARRIED DAUGHTER, SHALL BE DEEMED TO BE THE OWNER OF THE HOUSE PROPERTY SO TRANSFERRED; (II) THE HOLDER OF AN IMPARTIBLE ESTATE SHALL BE D EEMED TO BE THE INDIVIDUAL OWNER OF ALL THE PROPERTIES COMPRISED IN THE ESTATE ; (III) A MEMBER OF A CO-OPERATIVE SOCIETY, COMPANY OR OTHER ASSOCIATION OF PERSONS TO WHOM A BUILDING OR PART THEREOF IS ALLOTTED OR LEASED UN DER A HOUSE BUILDING SCHEME OF THE 5 I. T. APPEAL NO. 856 (DEL) OF 2010. SOCIETY, COMPANY OR ASSOCIATION, AS THE CASE MAY BE , SHALL BE DEEMED TO BE THE OWNER OF THAT BUILDING OR PART THEREOF ; (IIIA) A PERSON WHO IS ALLOWED TO TAKE OR RETAIN P OSSESSION OF ANY BUILDING OR PART THEREOF IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERR ED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882), SHALL BE DEEMED TO BE THE OWNER OF THAT BUILDING OR PART THEREOF ; (IIIB) A PERSON WHO ACQUIRES ANY RIGHTS (EXCLUDING ANY RIGHTS BY WAY OF A LEASE FROM MONTH TO MONTH OR FOR A PERIOD NOT EXCEEDING ONE YEAR) IN OR WITH RESPECT TO ANY BUILDING OR PART THEREOF, BY VIRTUE OF ANY SUCH TRANSACTION AS IS REFERRED TO IN CLAUSE (F) OF SECTION 269UA, SHALL BE DEEMED TO BE THE OWNER OF THAT BUIL DING OR PART THEREOF; 5.2 OBVIOUSLY THE ASSESSEES CASE DOES NOT FALL IN DEFINITION OF OWNER OF HOUSE PROPERTY AS SPECIFIED IN CLAUSES (I) TO (IIIA) OF SECTION 27 OF THE ACT, 1961. THE ASSESSEES CASE WOULD FALL UNDER CLAUSE (IIIB) OF SECTION 27 OF THE ACT, IF TH E LEASE OF THE PROPERTY FALLS UNDER CLAUSE (F) OF SECTION 269-UA. UNDER SECTION 269UA(F) A RIGHT ACQU IRED BY A PERSON IN ANY BUILDING OR PART THEREOF, BY VIRTUE OF ANY SUCH TRANSACTION AS SPECI FIED IN THIS SECTION SHALL BE DEEMED TO BE THE OWNER OF THAT BUILDING OR PART THEREOF. CLAUSE (F) OF SECTION 269-UA DEFINES THE WORD TRANSFER AND IS REPRODUCED AS BELOW: (F) TRANSFER , (I) IN RELATION TO ANY IMMOVABLE PROPERTY REFERRED TO IN SUB-CLAUSE (I) OF CLAUSE (D), MEANS TRANSFER OF SUCH PROPERTY BY WAY OF SALE OR E XCHANGE OR LEASE FOR A TERM OF NOT LESS THAN TWELVE YEARS, AND INCLUDES ALLOWING T HE POSSESSION OF SUCH PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTR ACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882). EXPLANATION.FOR THE PURPOSES OF THIS SUB-CLAUSE, A LEASE WHICH PROVIDES FOR THE EXTENSION OF THE TERM THEREOF BY A FURTHER TERM OR TERMS SHALL BE DEEMED TO BE A LEASE FOR A TERM OF NOT LESS THAN TWELVE YEARS, IF THE AGGREGATE OF THE TERM FOR WHICH 6 I. T. APPEAL NO. 856 (DEL) OF 2010. SUCH LEASE IS TO BE GRANTED AND THE FURTHER TERM OR TERMS FOR WHICH IT CAN BE SO EXTENDED IS NOT LESS THAN TWELVE YEARS; (II) IN RELATION TO ANY IMMOVABLE PROPERTY OF THE NATURE REFERRED TO IN SUB-CLAUSE (II) OF CLAUSE (D), MEANS THE DOING OF ANYTHING (WHETHER BY WAY OF ADMITTING AS A MEMBER OF OR BY WAY OF TRANSFER OF SHARES IN A CO-OPERATIV E SOCIETY OR COMPANY OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF ANY AGREEMENT O R ARRANGEMENT OR IN ANY OTHER MANNER WHATSOEVER) WHICH HAS THE EFFECT OF TRANSFER RING, OR ENABLING THE ENJOYMENT OF, SUCH PROPERTY. 5.3 CLAUSE (D)(I)OF SECTION 269-UA READS AS UN DER :- (D) IMMOVABLE PROPERTY MEANS (I) ANY LAND OR ANY BUILDING OR PART OF A BUILDING , AND INCLUDES, WHERE ANY LAND OR ANY BUILDING OR PART OF A BUILDING IS TO BE TRANSFERRED TOGETHER WITH ANY MACHINERY, PLANT, FURNITURE, FITTINGS OR OTHER THINGS, SUCH MA CHINERY, PLANT, FURNITURE, FITTINGS OR OTHER THINGS ALSO. EXPLANATION.FOR THE PURPOSES OF THIS SUB-CLAUSE, LAND, BUILDING, PART OF A BUILDING, MACHINERY, PLANT, FURNITURE, FITTINGS AND OTHER THINGS INCLUDE ANY RIGHTS THEREIN. 5.4 ON PLAIN READING OF CLAUSE (F)(I) AND CLAUSE ( D)(I) OF SECTION 269UA IT IS APPARENT THAT A TRANSACTION IN RESPECT OF IMMOVABLE PROPERTIES BY WAY OF SALE OR EXCHANGE OR LEASE FOR A TERM OF NOT LESS THAN TWELVE YEARS INCLUDING ALLOWING THE P OSSESSION OF SUCH PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE N ATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 WILL BE TREATED AS TRANSFER AND THE TRANSFEREE ASSESSEE WOULD BECOME OWNER OF HOUSE PROPERTY FOR THE PURPOSES OF SECTION 22 TO 26 OF THE ACT. 5.5 THE HONBLE SUPREME COURT IN THE CASE OF CIT VS . PODDAR CEMENT PVT. LTD. & OTHERS 226 ITR 625 (SC) HAD AN OCCASION TO EXAMINE THE MEA NING OF THE WORD OWNER. IT HAS BEEN 7 I. T. APPEAL NO. 856 (DEL) OF 2010. OBSERVED THAT SECTION 9(I) OF THE INDIAN INCOME-T AX ACT, 1922 WAS SUBSTANTIALLY THE SAME AS SECTION 22 OF THE INCOME-TAX ACT, 1961. THE WHILE OF SECTION 9 OF THE OLD ACT HAS BEEN SPLIT UP AND REDRAFTED INTO SEVERAL SEPARATE SECTIONS, NAMEL Y, SECTIONS 22 TO 27 UNDER THE HEAD NEW ACT. IN JODHAMAL KUTHIALA VS. CIT (1971) 82 ITR 570 (SC) , IT WAS HELD THAT SECTION 9 OF THE 1922 ACT BRINGS TO TAX THE INCOME FROM PROPERTY AND NOT THE INTEREST OF A PERSON IN THE PROPERTY. A PROPERTY CANNOT BE OWNED BY TWO PERSONS, EACH ONE H AVING INDEPENDENT AND EXCLUSIVE RIGHT OVER IT. HENCE, FOR THE PURPOSE OF SECTION 9 OF THE 19 22 ACT, THE OWNER MUST BE THAT PERSON WHO CAN EXERCISE THE RIGHT OF THE OWNER, NOT ON BEHALF OF T HE OWNER, BUT IN HIS OWN RIGHT. THE ABOVE OBSERVATIONS OF THE HONBLE SUPREME COURT CLEARLY F IX THE LIABILITY ON THE PERSON WHO RECEIVES OR IS ENTITLED TO RECEIVE THE INCOME FROM PROPERTY IN ITS OWN RIGHT. 5.6 HONBLE SUPREME COURT IN THE CASE OF PODDAR CEM ENT PVT. LTD. OBSERVED AS UNDER :- HENCE, THOUGH UNDER THE COMMON LAWS OWNER MEA NS A PERSON WHO HAD GOT VALID TITLE LEGALLY CONVEYED TO HIM AFTER COMPLYING WITH REQUIR EMENT OF LAW, SUCH AS TRANSFER OF PROPERTY ACT, THE REGISTRATION ACT, ETC. IN THE CON TEXT OF SECTION 22 OF THE I. T. ACT, 1961, HAVING REGARD TO THE GROUND REALITIES AND FURTHER H AVING REGARD TO THE OBJECT OF INCOME- TAX ACT, NAMELY, TO TAX THE INCOME, OWNER IS A PERS ON, WHO IS ENTITLED TO RECEIVE INCOME FROM PROPERTY IN HIS OWN RIGHT. THE REQUIREMENT OF REGISTRATION OF THE SALE DEED IN THE CONTEXT OF SECTION 22 IS NOT WARRANTED. 5.7 FURTHER HONBLE MADRAS HIGH COURT IN THE CASE O F CHENNAI PROPERTIES AND INVESTMENTS LTD. (SUPRA) DISCUSSED VARIOUS DECISIONS INCLUDING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF S. G. MERCANTILE CORPN. LTD. (SUPRA) AND CA ME TO THE CONCLUSION THAT THE ASSESSEE WAS ONLY EXPLOITING THE PROPERTY AS OWNER BY LEASING OU T THE SAME AND REALIZING THE INCOME BY WAY OF A RENT. SUCH RENTAL INCOME WAS LIABLE TO BE ASS ESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY. HONBLE COURT ALSO NOTED THAT SECTION 22 OF INCOME-TAX ACT, 1961 DOES NOT REFER TO HOUSE PROPERTY, DESPITE ITS CAPTION. THE LANGUAGE EMPLOYED IN THE SECTION SHOWS THAT THE INCOME 8 I. T. APPEAL NO. 856 (DEL) OF 2010. REFERRED TO THEREIN IS NOT NECESSARILY INCOME FROM HOUSES. IT IS INCOME FROM PROPERTY CONSISTING OF ANY BUILDING OR LAND OR LANDS APPURTENANT THERET O OF WHICH THE ASSESSEE IS OWNER. FURTHER THE WORD BUILDING HAS NOT BEEN CONFINED IN ITS SCOPE ONLY TO DWELLING HOUSES. HOUSE IS DEFINED IN THE OXFORD DICTIONARY OF ENGLISH, 10 TH EDITION, AS A BUILDING FOR HUMAN HABITATION, ESPEC IALLY ONE THAT IS LIVED IN BY A FAMILY OR BY A SMALL GROUP OF PEOPLE, CONSISTING OF GROUND FLOOR AND ONE OR MORE NUMBER OF STORIES. THE WORD HOUSE IN ASSOCI ATION OF OTHER WORDS ALSO HAS MANY OTHER MEANINGS BUT A COMMERCIAL BUILDING IS NOT REGARDED AS A HOUSE. THAT, HOWEVER, WOULD NOT TAKE THE INCOME FROM SUCH BUILDING OUT OF AMBIT OF SECTI ON 22. 6. IN THE CASE BEFORE US, THE ASSESSEE UNDER THE LE ASE AGREEMENT DATED 6/09/1995 GOT A TENANCY RIGHTS COMMENCING FROM 6/09/1995 INITIALLY FOR 11 MONTHS WHICH HAS BEEN EXTENDED UPTO 20 YEARS. AS PER THE LEASE AGREEMENT ENTERED I NTO WITH THE OWNER OF THE PROPERTY, THE ASSESSEE HAD DEVELOPED THE PROPERTY AND HAS LEASED OUT THE SAME TO OTHER PERSONS. THEREFORE, THE ASSESSEE HAD GOT A RIGHT TO RECEIVE THE LEASE R ENTALS FROM THE TENANTS. ACCORDINGLY, FOR THE PURPOSES OF SECTION 22 THE ASSESSEE IS THE OWNER OF THE PROPERTY AND THE INCOME THEREFROM IS CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERT Y. FURTHER THE DECISION IN THE CASE OF S.G. MERCANTILE CORPN. (SUPRA) WAS RENDERED IN 1972 MUCH EARLIER TO THE AMENDMENT BROUGHT INTO STATUTE BY FINANCE ACT, 1987 WITH EFFECT FROM 1/04/ 1988 ACCORDING TO WHICH CLAUSE (III) WAS SUBSTITUTED BY PRESENT CLAUSE (III) (IIIA) & (IIIB) WHICH ENLARGES THE SCOPE OF THE WORD OWNER FOR THE PURPOSES OF SECTIONS 22 TO 26 OF THE ACT. HON BLE SUPREME COURT IN THE CASE OF PODDAR CEMENT PVT. LTD. (SUPRA) ALSO HELD THAT THE AMENDME NT INTRODUCED BY THE FINANCE BILL, 1987 WAS DECLARATORY / CLARIFICATORY IN NATURE SO FAR AS IT RELATED TO SECTION 27(III), (IIIA) AND (IIIB). CONSEQUENTLY, THESE PROVISIONS ARE RETROSPECTIVE IN OPERATION. THIS BEING THE POSITION OF LAW THE PRESENT APPEAL IS SQUARELY COVERED BY THE RATIO OF DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. PODDAR CEMENT PVT. LTD. & OTHERS (S UPRA) AND THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF CHENNAI PROPERTIES AND IN VESTMENTS LTD. (SUPRA) AS DISCUSSED ABOVE. IN THE CASE BEFORE US THE ASSESSEE HAS EXPLOITED THE LEASE RIGHTS IN THE PROPERTY AS AN OWNER. THE RENT HAS BEEN RECEIVED UNDER TENANCY RIGHTS AND, TH EREFORE, THE ASSESSEE IS OWNER OF THE PROPERTY FOR THE PURPOSES OF SECTION 22 OF THE ACT. ACCORDI NGLY, THE RENT RECEIVED BY THE ASSESSEE WILL BE 9 I. T. APPEAL NO. 856 (DEL) OF 2010. ASSESSABLE UNDER THE HEAD HOUSE PROPERTY AND NOT UNDER THE HEAD INCOME FROM BUSINESS. WE, THEREFORE, SET ASIDE THE ORDER OF THE LD. CIT ( A) AND RESTORE THE ORDER OF THE ASSESSING OFFICER. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON : 16 TH JULY, 2010. SD/- SD/- [ C. L. SETHI ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 16 TH JULY, 2010. FIT FOR PUBLICATION. *MEHTA * SD/- SD/- COPY OF THE ORDER FORWARDED TO : - J. M. A. M. 1. APPELLANT. 16/07/2010. 2. RESPONDENT. 3. CIT, 4. CIT (APPEALS), 5. DR, ITAT, NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR, ITAT. 10 I. T. APPEAL NO. 856 (DEL) OF 2010.