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Issues: Whether income from letting out the commercial premises together with separately charged fixed amenities was assessable as income from house property or as business income.
Analysis: The receipts arose from letting a commercial building on leave and licence basis with fixed amenities forming part of the building, and no independent services such as maintenance, security management, transport, or other commercial operations were shown to have been rendered by the assessee. The amenities were found to be inseparable from the letting itself and incidental to the use and occupation of the premises. Applying the settled principle that the character of income depends on the nature of the operation and that bare letting with only incidental facilities remains assessable as property income, the separate treatment of the amenities receipts as business income was held to be unsustainable.
Conclusion: The entire receipt, including the amounts shown under the amenities agreement, is assessable as income from house property and not as business income.
Final Conclusion: The assessee succeeds and the Revenue fails, as the composite receipts from letting the premises with fixed amenities are to be taxed under the head income from house property.
Ratio Decidendi: Where fixed amenities are inseparable from the letting of premises and no real commercial services are rendered, the composite receipts retain the character of income from house property.
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