Loading judgment…
Facts
The Revenue appealed against the Ld.CIT(Appeals) order for AY 2015-16, disputing whether fit-out charges should be assessed as business income or 'Income from house property'. The assessee contended that this issue had already been settled by the Tribunal for previous assessment years (AY 2011-12 & 2012-13).
Held
The Tribunal upheld the Ld.CIT(A)'s decision, ruling that income from fit-out charges should be assessed as business income. This decision was consistent with the Tribunal's earlier order for AY 2011-12, which found that separate rent and fit-out agreements indicated a business purpose, and all relevant facts were disclosed by the assessee.
Key Issues
Whether fit-out charges are to be assessed as business income or under the head "Income from house property".
Sections Cited
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “G” NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD & DR. BRR KUMAR
Revenue by Shri Vivek Vardhan, Sr. DR Assessee by Shri M P Rastogi, Adv. सुनवाईक�तारीख/ Date of hearing: 01.02.2024 30.04.2024 उ�ोषणाक�तारीख/Pronouncement on आदेश /O R D E R PER C.N. PRASAD, J.M.
This appeal is filed by the Revenue against the order of the Ld.CIT(Appeals)-9, New Delhi dated 28.12.2018 for the AY 2015-16.
The only issue in the appeal of the Revenue is as to whether the fit-out charges are to be assessed as business income or under the head “Income from house property”.
I.T.A.No.2373/Del/2019
The Ld. Counsel for the assessee, at the outset, submits that the issue in appeal is decided by the Tribunal for the assessment years 2011-12 & 2012-13. Copy of the order for the AY 2011-12 in dated 30.05.2019 is placed on record.
Heard rival submissions. We find that an identical issue came up for adjudication by the Tribunal for the AY 2011-12 and the Tribunal in dated 30.05.2019 affirmed the order of the Ld.CIT(A) in holding that income from fit-out higher charges as business income observing as under: -
“7. We have heard both the parties and perused the material available on record. From the perusal of the Rent Agreement dated 30/08/2007, it can be seen that it is with the sole purpose for rent in respect of the entire building to the Multi National company IBM. The Fit Out Agreement dated 18/01/2008 was entered between the parties for the sole purpose of smooth running of the business of the lessee and it is totally a separate legal document. Both these agreements do not have any motive as regards the evasion of the tax aspect. In-fact, when we see the Supplementary Agreement dated 23rd September, 2009, the parties have agreed that the assessee will provide the fixtures in the said premises lease by IBM at a much lower rate than to the estimated cost of Rs. 1,500/-. Thus, in-fact the assessee has disclosed all the materials before the Assessing Officer and it is not an evasion of tax. The case laws referred by the Ld. DR also not relevant as the same are distinguishable in facts. In case of Shambhu Investment there is no separate charges included in the agreement, but in the present case there are two separate agreements and each terms have been expressed in the agreement. Thus, the CIT(A) has rightly considered the 2
I.T.A.No.2373/Del/2019 income from Fit-Out Hire Charges as business income as held in A.Y. 2008-09. There is no need to interfere with the finding of the CIT(A). Thus, the Revenue’s appeal is dismissed.” 5. Respectfully following the said order of Tribunal, we reject the ground raised by the Revenue.
In the result, appeal of the Revenue is dismissed.
Order pronounced in the open court on 30/04/2024