2014 (9) TMI 1103

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....tion of law: Whether the Appellate Authorities were correct in holding that the rental income earned by the assessee company from letting out building should be brought to tax under the head "Income from Business" and not under the head "Income from House Property" as held by the Assessing Officer? 3. This Court had an occasion to consider the said question of law in the case of COMMISSIONER OF INCOME TAX-III vs. VELANKANI INFORMATION SYSTEMS (P.) LTD, wherein it has been held as under: "25. We have to find out in that context what was the intention of the parties in entering into the lease transaction. It is not the number of agreements, which are entered into between the parties which is decisive in determining the nature of transactio....

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....nder the head "Income from other sources". Clause (ii) of Section 56(2) provides that 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'. Clause (iii) also provides that 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'. Therefore the intention of the legislature is explicit. The provision is clear, i.e., if the lettin....