Composite letting receipts taxed as house property income, while separately identifiable amenity charges were treated as business income.

Composite consideration under a leave and licence arrangement was held taxable as income from house property where the letting and allied amenities were inseparable and the amenity component was not separately quantifiable. By contrast, where a separate agreement identified a distinct charge for generator-based electricity facilities, that receipt retained its independent character and was assessable as business income. The Tribunal therefore treated the licence receipt as house property income and the separate amenity receipt as business income, modifying the assessment accordingly.

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Issues: Whether the receipts under the leave and licence arrangement were assessable wholly as income from house property or whether the charges for amenities could be assessed as business income.

Analysis: The agreement for letting of the property fixed a composite consideration and did not separately quantify the amount attributable to the amenities referred to in the leave and licence document. On the other hand, the separate agreement for hire of amenities related only to generator-based electricity facilities and contained an identifiable consideration. Applying the principle that where letting and amenities are inseparable the receipt is assessable under the head income from house property, but where the amenity charge is separately ascertainable it may be assessed according to its own character, the Tribunal held that the composite licence receipt remained house property income. The separate amenity receipt, being distinct and identifiable, was treated as business income.

Conclusion: The receipt under the leave and licence agreement was assessable as income from house property, while the receipt under the separate hire of amenities agreement was assessable as business income.

Final Conclusion: The assessment was modified to the above extent and the appeals were allowed only in part for statistical purposes.

Ratio Decidendi: Where consideration for letting of property and allied facilities is not separately ascertainable, the composite receipt is taxable as income from house property, whereas separately identifiable amenity charges retain their independent character.

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