PCIT Vs Mahle Filters Systems (India) Ltd (Delhi High Court)
Delhi High Court held that rental income earned from factory building it taxable under the head ‘Income from house property’ and is eligible for deduction under provisions of section 24 of the Income Tax Act.
Facts- Revenue has preferred the present appeal contesting that ITAT has erred in deleting the additions upheld by the ld. CIT(A) made by the Assessing officer on the basis of treating ‘income from house property’ declared by the Assessee to ‘income from other sources’ owing to the fact that the Assessee has entered into ‘lease and License agreement’ not ‘lease rental agreement’.
Conclusion- Held that there is no dispute that the factory building owned by the assessee was let out to M/s Anand Engines Component Ltd., for which the assessee earned rental income of Rs. 47.26 lakhs. Whether there existed ‘leave and licence’ agreement and not ‘rental agreement’ would not change the colour of receipts in the hands of the assessee. The undeniable fact is that the assessee has earned rental income from letting out its property and the same has to be taxed under the head ‘income from house property’ eligible for deduction as per the provisions of section 24 of the Act.
