Advance rent deposit under a sub-lease held not taxable as revenue income where treated as a liability.

An advance rent deposit received under a long-term sub-lease was held not taxable as revenue income in the assessee's hands. The Tribunal treated the receipt as a liability adjustable against future rent, noting that the assessee consistently reflected it in the balance sheet as such. It also found the factual pattern materially similar to an earlier co-ordinate Bench decision where an equivalent receipt was held non-taxable. The label "advance rent deposit" did not change the character of the receipt, and cases involving true rent or different commercial facts were distinguished on that basis.

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Issues: Whether the sum of Rs. 10 lakhs received as advance rent deposit under the sub-lease was taxable as revenue income in the assessee's hands.

Analysis: The amount was received under a long-term sub-lease as an advance rent deposit adjustable against future rent. The Tribunal found that the factual pattern was materially similar to an earlier co-ordinate Bench decision in which such a receipt was held not taxable. The description of the amount as an advance rent deposit did not alter its character, and the assessee had consistently treated it as a liability in the balance sheet. The reasoning distinguished cases where the receipt was truly rent or where the facts showed a different commercial character.

Conclusion: The amount was not taxable as revenue income in the assessee's hands.

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