C.I.T.UDAIPUR vs. LAKE PALACE HOTELS and MOTELS PVT.LTD.

1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR. (1) D.B. INCOME TAX APPEAL NO.64/2012 Commissioner of Income Tax- Udaipur vs. The Lake Palace Hotels & Motels Pvt. Ltd. City Palace, Udaipur. (2) D.B. INCOME TAX APPEAL NO.66/2012 Commissioner of Income Tax- Udaipur vs. The Lake Palace Hotels & Motels Pvt. Ltd. City Palace, Udaipur. (3) D.B. INCOME TAX APPEAL NO.67/2012 Commissioner of Income Tax- Udaipur vs. The Lake Palace Hotels & Motels Pvt. Ltd. City Palace, Udaipur. DATE OF ORDER :: 24.08.2016 HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE GOVIND MATHUR Mr. K.K. Bissa, for the appellant. Mr. N.M. Ranka, Sr. Advocate with Mr. N.K. Jain and Mr. M. Aslam Naushad, for the respondents. ... By way of these appeals, the Revenue Department has challenged the orders of the learned Tribunal whereby the learned Tribunal dismissed the Revenue Appeals and confirmed the orders of the CIT (A). Counsel for the appellant contended that the expenses which are done for the aircraft services will not fall within the purview of the services of the Hotel and the lease, which has been treated as business income and not income from other sources is the income from other sources. Following substantial questions of law are sought to be

2 framed in the appeals: “(1) Whether on the facts & in the circumstances of the case, the Hon’ble ITAT is legally justified and correct in Treating the amount received from Indian Hotel Co. Ltd. as business income and not income from other sources. (2) Whether on the facts & in the circumstances of the case, the Hon’ble ITAT is legally justified and correct in deleting disallowance of Rs.13,61,191/- made on account of delayed payment of PF and ESI. (3) Whether on the facts & in the circumstances of the case, the Hon’ble ITAT is legally justified and correct in deleting disallowance of Rs.4,53,971/- out of deferred revenue expenditure. (4) Whether on the facts & in the circumstances of the case, the Hon’ble ITAT is legally justified and correct in reversing the decision of the ld. CIT (A) in treating the receipt of lease rent of Rs.48,61,880/- and aircrafts charges of Rs.41,31,670/- as business income and not income from other sources. (5) The order of the ITAT is perverse as it is against the material evidence on record and against the facts of the case.” Learned counsel for the appellant has placed reliance on the following decisions of the Gujarat High Court as well as Kerala High Court: (1) Commissioner of Income-tax-II vs. Gujarat State Road Transport Corporation, reported in (2014) 41 taxmann.com 100 (Gujarat); and (2) Commissioner of Income-tax, Cochin vs. Merchem Ltd., reported in (2015) 61 taxmann.com 119 (Kerala)

3 However, counsel for the respondent has raised preliminary objections to the substantial questions of law and submits that no substantial question of law are liable to be framed against the finding of fact arrived by the learned Tribunal and the CIT and the income which has been raised by way of lease will fall within the purview of the property which was done by the assessee. We have gone through the orders passed by the CIT as well as the learned Tribunal and the contention raised by the learned counsel for the respondents that no substantial questions are required to be framed. Even otherwise, the income by lease was the property of the assessee and will fall within his income and the allowances which were for daily payment for PF and ESI which has rightly been decided by the Tribunal. In our view, no substantial questions of law are required to be framed. Consequently, the appeals being devoid of any merit deserve to be dismissed and the same are hereby dismissed. A copy of this order be placed in each file. (GOVIND MATHUR),J. (K.S. JHAVERI),J. tikam daiya Item No.34-36