Law:

Section:

I. Section 56, read with section 22 of the Income-tax Act, 1961 [Corresponding to section to section 12, read with section 9, of the Indian Income-tax Act, 1922] - Income from other sources - Chargeable as - Assessment year 1961-62 - Whether section 12(4) of 1922 Act includes letting on hire machinery, plant or furniture combined with letting of building where two lettings are inseparable - Held, yes - Assessee-company, under a deed, leased out its premises on a monthly rent and further let out on hire fixtures fittings and air conditioning plants in said premises to same tenants on monthly rent - Lease deed expressly described houses and fixtures, fittings and air-conditioning plants collectively as "demised premises" although separate rents were allocated for both lettings - Terms of lease for both lettings were same and rents were also payable at same time with no difference - Further, there were no separate leases for two lettings but only one lease - Whether on express terms and conditions of lease, letting of building and letting of fixtures, fittings and air-conditioning plants were "inseparable" within meaning of that word used in section 12(4) of 1922 Act - Held, yes - whether, therefore, entire rental income from both lettings was to be assessed under section 12 of 1922 Act - Held, yes FACTS-I For the assessment year 1961-62, the assessee-company leased its premises to the tenants at monthly rent under a lease deed which also provided that it would also let out on hire to tenants the fixtures, fittings and the air conditioning plants in the said premises on monthly rent. In its return, the assessee showed the rent reserved for the building under section 9, and the rent reserved for fixtures, etc. under section 12. The ITO made the assessment accordingly. On second appeal, however, the Tribunal held that the lessee would not have accepted the lease of the premises without hire of the fixtures etc. and that, the intention of the parties being that the letting would be inseparable, the entire rental income should be assessed under section 12 after allowing all the deductions available thereunder. On reference : HELD The Tribunal had found on the facts of…

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