- (1.) The Court:-This appeal was admitted on the following substantial questions of law:- "(i) Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is correct in deleting the addition of Rs.67,97,355/- being rent receivable in respect of the portion of the property owned by the assessee, which was vacant during the year, on correct interpretation of the amended provisions of section 23(1)(c) of the Income-tax Act, 1961 ? (ii) Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is correct in deleting the addition of Rs.1,49,71,491/- being service charges and depreciation of the property owned by the assessee as integral part of the letting out of the house property, and not the business carried on by the assessee ?"
(2.) The appeal primarily involves computation of income of the assessee from its immovable property for the assessment year 2005-2006. The property consists of a building in New Delhi at Barakhamba Road. For the relevant previous year a part of the building was let out and another part thereof was under construction. The assessing officer added the income receivable as income from house property.
(3.) Contention of the assessee before the assessing officer was that the building being under construction during the relevant previous year, the same could not be taxed applying the provision of Section 23(1)(c) of the Income Tax Act, 1961. On the second question, contention of the assessee was that the service charges received from the occupiers/tenants ought to be taxed as business income and not income from house property and depreciation should have been allowed. The assessing officer went against the assessee on both these counts but the assessee's stand was upheld by the Commissioner of Appeals.;