IN THE HIGH COURT OF KERALA AT ERNAKULAM
ITA.No. 214 of 2002()
1. THE COMMISSIONER OF INCOME TAX,
... Petitioner
Vs
1. M/S.MOHAN'S ENTERPRISES, KOLLAM.
... Respondent
For Petitioner :SRI.P.K.R.MENON,SR.COUNSEL,GOI(TAXES)
For Respondent :SRI.P.BALACHANDRAN (SR.)
The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice HARUN-UL-RASHID
Dated :10/12/2008
O R D E R
C .N. RAMACHANDRAN NAIR &
HARUN-UL-RASHID, JJ.
--------------------------------------------
I.T.A. No. 214 OF 2002
--------------------------------------------
Dated this the 10th day of December, 2008
JUDGMENT
Ramachandran Nair,J.
The only question raised is whether charges received separately
for providing lift service to the tenants in the building is to be assessed
as business income or income from house property. We have heard
counsel appearing for both sides.
2. The contention of the revenue is that without use of the lift
tenant has no access to the house and so much so it is an integral part of
the house and the income therefrom is therefore assessable as income
from house property. On the other hand, counsel for the assessee relied
on the decision of the Supreme Court in KARNANI PROPERTIES
LTD. V. C.I.T., 82 I.T.R. 547 and contended that issue is covered
in favour of the assessee and hence appeal has to be dismissed.
However, we are unable to accept the contention of the assessee
because the case decided by the Supreme Court pertains to supply of
2
electricity, supply of hot and cold water, scavenging and all services
related to maintenance of building which are not undertaken by
landlords generally in tenancy agreements. In fact the service of lift is
one of the components of several activities carried on by the assessee in
that case as business undertaking. In this case, strangely the only
charge received by the assessee is service charges for providing lift
service to the tenants. Strangely none of the authorities has considered
terms of tenancy agreement. In the first place the Supreme Court
decision probably may not have any relevance as of now because under
the current building rules, all multi-storied buildings above four floors
must have compulsorily lift. This pre-supposes that a tenant in a high-
rise building is entitled to lift service and it is therefore intrinsically
connected with letting out of the building for residential or commercial
purpose. In fact, lift only provides access to the tenant to the flat and it
is an alternate to the stair-case. It is not known whether a tenant has
option to go out of the lift service and be contented with use of
staircase. In other words, whether a tenant can get out of the lift
service and maintain tenancy agreement without paying for the lift
3
service. In fact, if uniform service charges are collected from every
tenant, whether he be in the first floor or top floor, then it is to be
treated as part of the rent and the separate arrangement for collection of
service charges is an arrangement to reduce tax liability. Since in this
case facts are not considered by either of the authorities we set aside
the orders of the authorities and remand the matter to the assessing
officer for factual verification and for verifying rent deed and for
making fresh assessment.
Appeal stands disposed of as above.
(C.N.RAMACHANDRAN NAIR)
Judge.
(HARUN-UL-RASHID)
Judge.
kk
4