INCOME TAX ACT, 1961

Section 14

Head of income - Amenities charges in respect of leased building - Amenities being part and parcel of building - 'Income from house property' or 'Income from other sources'

Assessee declared rental income from leased building including amenity charges received vide two separate agreements under the head “Income from house property”. AO was of the view that the amenity charges would fall under the head “Income from other sources” as the income arising from separate agreement for services was in the nature of income from the other sources. Held: It was found that the amenities available in the building were RCC frame structure, marvel/granite in common areas, lobbies, two elevators, CCTV in common areas, water supply, electricity, etc. If the nature of such amenities was analyzed, those were clearly part and parcel of the building. Further, the agreement of leave and licence and other for amenities was composite one and one could not be enforced without the other. Further, both the agreements were the basic agreements and were integral part to use of licence premises and their uses co-extensive/co-terminous, therefore, both the agreements could not be segregated, and hence, the charges for amenities were rightly declared under the head 'Income from house property'.

REFERRED : Shambhu Investment (P) Ltd. v. CIT (2003) 263 ITR 143 (SC) : 2003 TaxPub(DT) 0948 (SC).

FAVOUR : In assessee's favour.

A.Y. : 2011-12

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