Case: Commissioner of Income-Tax ?? 9 Vs. M/S. Pelican Investments Private Limited

3. The respondentassessee filed its return of income on 29th October, 2006, declaring a total loss of Rs.The Assessing Officer made an order under section 143(3). The annual value under section 23(1)(a) was computed at Rs.A deduction under section 24 at 30% amounting to Rs.18,08,108/was allowed. He, accordingly, assessed a sum of Rs.42,18,919/to be income from house property.4. The Commissioner of Income Tax (Appeals) allowed the respondents appeal against the inclusion of compensation received in respect of agreements under the head Income from house property on the basis of the previous decision of the Commissioner of Income Tax for the assessment yearand the fact that there were no change in circumstances since then. The Tribunal upheld the order in this regard.

Reasoning:
11. The submission, however, is not well founded. Firstly, it was not contended that the agreements were a camouflage to conceal a licence of twenty one years or to circumvent the said provisions of the Act. Indeed, that could not have been the case. As we noted earlier, the first agreement was entered into on 7th November, 1984 before the provisions came into force. Section 27(iiib) and 269UA(f) came into force with effect from 1st April, 1988 and 1st October, 1996, respectively.On the other hand, the agreements establish beyond doubt that they are separate and distinct. For instance, neither the respondent nor HLL had a right to renew the first agreement. This is the clearest indication that the subsequent agreement was separate and distinct and was entered into on the basis of fresh negotiations.The mere fact that the same licencee continues under consecutive agreements would make no difference. If a licencee enters into a fresh agreement upon the expiry of the earlier agreement, it would be pointless his vacating the premises and immediately reoccupying it. That would be an unnecessary, hollow formality. His not doing so cannot constitute two or more distinct agreements to be a single composite agreement even for the purpose of computing the duration of the period of the licence.17. It would be a different matter altogether if it were established that the different licence agreements were, in fact, a camouflage for one composite agreement for a period of 12 years or more. That, at the cost of repetition, is neither the appellants case nor established on the basis of the record. The record, in fact, indicates the contrary.18. Added to this is the fact that the department had accepted the respondents case throughout. It is only for the assessment yearsonwards that the present contention had been raised. There were, as noted by the Commissioner of Income Tax (Appeals), no change in circumstances which would warrant a different view being taken.