Law:

Section:

Section 22, read with section 263, of the Income-tax Act, 1961 - Income from house property - Chargeable as - Assessment treating income derived by assessee-company from letting out office premises along with certain facilities and services to various persons as business income, was held by Commissioner under section 263 as erroneous and prejudicial to interests of revenue and was set aside with direction to Assessing Officer to assess said income as property income - Prime object of assessee under said agreement was to let out portion of said property to various occupants by giving them additional right of using furniture and fixtures and other common facilities for which rent was being paid month by month in addition to security free advance covering entire cost of said immovable property - Whether it would be wrong to say that assessee was exploiting property for its commercial business activities and such business activities were primary motto and letting out property was secondary one - Held, yes - Whether from agreement between two parties, it was clear that primary object was to let out portion of said property with additional right of using furniture and fixtures and other common facilities for which rent was being charged from month to month and, therefore, income derived from said property was income from property which should be assessed as such - Held, yes FACTS The assessee, owner of certain furnished premises, let out the same to various persons or firms or organisations. Under the agreement, the assessee was to provide services like watch and ward staff, electricity, water and other common amenities. The income derived by the assessee from the said office premises was offered for taxation as business income and the same was assessed accordingly by the Assessing Officer. Subsequently, the Commissioner, invoking section 263, passed the assessment order and after…

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