Telekon Media India Pvt. Ltd. Vs ITO (ITAT Delhi)
The issue under consideration is when a building and plant, machinery or furniture are inseparably let out, then under Income Tax it will be taxable under head of house Property, business or other sources?
As per section 22 of the Act, any annual value (rental income from leasing) of building or lands appurtenant thereto is chargeable under the head “income from house property” and during relevant period, deduction against such income under section 24(a) of the Act is allowable for a sum equal to 30% of the annual value. Further, the section 56(2)(iii) provides that where an assessee lets on hire machinery, plant of furniture belonging to him and also the building, and the letting of the building is inseparable from the letting of the said machinery, plant of furniture, the income from such a letting, if it is not chargeable under the head”profit in gains of business or profession”, then it shall be chargeable to the head “income from other sources”.
When a building and plant, machinery or furniture are inseparably let, the Act contemplates the rent from the building as a residuary head of income.
We find that in the lease agreement between the parties, the demised premises have been mentioned as “workstations in the building”.
