CIT vs. NEMINATH INDUSTRIES PVT LTD

IN THE HIGH COURT OF DELHI AT NEW DELHI . 17.01.2011 . Present: None. . +ITA No.42/2011 . . Some rentals were received by the assessee and the rental income was shown as ?income from house property? on which 30% deduction under Section 24 of the Income Tax Act was claimed. Assessing Officer disallowed the said deduction treating it as ?business income?. The CIT(A) reversed the decision of the Assessing Officer holding it to be a ?rental income? and not ?business income? and that order is upheld by the ITAT observing as under: . ?6. We have heard both the counsels and perused the records. Both the counsels fairly agreed that the issue is covered in favour of the assessee by the decision of the Tribunal in assessee?s own case in ITA no.2795 for preceding assessment year. Vide order dated 4.9.2009 the Tribunal had adjudicated the issue as under:- . . ?6. We have heard both the counsel and perused the record. We find that it is an admitted fact of the case that the assessee had obtained office premises on lease and sub-let the same and derived income therefrom. In the view of the authorities below, in order to derive income from house property, the assessee has to be registered owner thereof. In our . . ITA No.42/2011 Page 1 of 2 opinion this view is not sustainable on the anvil of Apex Court decision delivered in the case of C.I.T. vs. Poddar Cement Pvt. Ltd. in 226 ITR 625. Further the contention that letting out of office space when not required can be the business income is not sustainable on the anvil of decision of the Hon?ble Jurisdictional High Court in the case of Smarts (P) Ltd. vs. C.I.T. (2008) 166 Taxman 53 (Delhi). In this case it was held that ?where the assessee in occupation of rented premises sub-let a portion thereof and claimed that income from such sub-letting was assessable as business income, the department was justified in assessing the said income under ?income from house property?, in view of the fact that the assessee was in full control in his capacity as a tenant, and had earned income by sub-letting the property. In situations of this type, there is nothing to suggest that ownership of the premises is essential for levying tax under the head ?income from house property.? . These are pure findings of fact and no question of law arises. The appeal is dismissed. A.K. SIKRI, J. . . M.L. MEHTA, J. JANUARY 17, 2011 DEV ITA No.42/2011 Page 2 of 2 . . . . 3