Separate fit-out hire charges treated as business income where distinct agreements supported classification apart from house property rent.

Fit-out hire charges received under a separate agreement were treated as business income because the receipts arose from distinct arrangements, one for lease rent and another for fit-out hire charges linked to the smooth running of the lessee's business. The record showed that the separate contractual terms were disclosed, and precedents on composite rent were found factually distinguishable. Consistent treatment in earlier assessment years also supported the same classification. The charges were therefore not assessed as rent or income from house property.

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Issues: Whether fit-out hire charges received under a separate agreement were assessable as business income or as rent/income from house property.

Analysis: The receipts arose under distinct agreements, one for lease rent and another for fit-out hire charges, and the latter was executed for the smooth running of the lessee's business. The materials on record showed that the terms of the separate arrangements had been disclosed, and the cited precedents on composite rent were held to be factually distinguishable. The earlier assessment years had also been accepted in the same manner, supporting consistency in treatment.

Conclusion: The fit-out hire charges were rightly treated as business income and not as rent or income from house property, in favour of the assessee.

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