TaxTMI 
TaxTMI 
2012 (3) TMI 82
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....hat out of the total income of Rs. 82,07,161/- declared under the head "income from house property", the amount of Rs. 48,07,198/- received consisting of signage rent of Rs. 7,98,000/-, parking rent of Rs. 24,50,237/-, terrace rent of Rs. 1,00,000/- and license fees of Rs. 12,29,000/- is to be taxed under the head "profits or gains of business". The CIT (A) held that the income should be taxed under the head "income from other sources". Against which assessee is in appeal before us in respect of licence fee and parking rent. 3. The grounds of appeal read as under :- "1. That on the facts and circumstances of the case, the CIT(A) was not justified in not accepting claim of the assessee that licence fee and parking rent is to be considered under the head income from house property as same is part of renting in accordance with provisions of sec. 22 of the Income Tax Act, 1961. 2(i) That finding of the CIT(A) that income from licence fee and parking of rent is assessable under the head other sources even though there was no such ground or finding of the Assessing Officer and as such these observations were without any legal basis or in the context of any such claim....
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.... rent has been defined. The rent means any payment, by whatever name called under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land or any building (including factory building) together with furniture, fittings and the land appurtenant thereto, whether or not such building is owned by the payee. Another Circular No.715 dated 08.08.1995 regarding the deduction of tax also confirms that the tax is to be deducted from rent paid by whatever name called for hire of property the incidence of deduction of tax at source does not depend upon the nomenclature but on the content of the agreement. The scope of deduction u/s 194I has been clarified by Board Circular No.715 dated 08.08.1995. As per the Circular, if a person has taken a particular space on rent and thereafter sub-lets the same fully or in part for putting up a hoarding, he should be liable to TDS u/s 194I and not u/s 194C. From these circulars and clarifications, it is well established that the assessee has rightly offered the income received from letting out the space, etc. etc. under the head income from property and not under the head business or profession and income from other source....
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.... Section 24 provides about deduction from income from house property. The income earning from installation of towers/antennas on its premises or income received from installation of signage or income from parking rent or income from giving space for operating small kiosks cannot be said to be income from house property or from land appurtenant with such property. 7. When we look to the TDS provision on rent we find nothing which could decide the head of income. Section 194I in Chapter XVII read as under :- "194-I. Any person, not being an individual or a Hindu undivided family, who is responsible for paying to [a resident] any income by way of rent, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, [deduct income-tax thereon at the rate of- (a) two per cent for the use of any machinery or plant or equipment; and (b) ten per cent for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings: Provided that no deduction ....
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....rejudice to the generality of the provisions of sub-section (1), the following incomes, shall be chargeable to income-tax under the head "Income from other sources" ** ** ** (ii) income from machinery, plant or furniture belonging to the assessee and let on hire, if the income is not chargeable to income-tax under the head "Profits and gains of business or profession"; (iii) where an assessee lets on hire machinery, plant or furniture belonging to him and also buildings, and the letting of the buildings is inseparable from the letting of the said machinery, plant or furniture, the income from such letting, if it is not chargeable to income-tax under the head "Profits and gains of business or profession". The provisions of Section 56 of the Income-tax Act for taxing income from other sources are inclusive. Certain incomes specify in section 56(2) are without prejudice to the generality of the provisions of sub-section (1) of section 56. Subsection (1) to section 56 provides that income of every kind which is not to be excluded form the total income under this Act shall be chargeable to income-tax under the head "Income from other sources", if it is not ch....