ITO 3(1)(2), MUMBAI vs. BRINDABAN BUILDERS P.LTD, MUMBAI
In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal upheld the CIT(A)'s order, agreeing that the income from letting of premises with services rendered should be assessed as business income. The Cross Objection by the assessee regarding reopening of assessment became infructuous.
What were the facts?
The Revenue appealed against the CIT(A)'s decision to treat income from property letting as business income, contrary to the AO's assessment as income from house property. The CIT(A) followed a previous ITAT ruling in the assessee's own case for a different assessment year.
What were the issues?
Whether income from letting of property with services is to be assessed as business income or income from house property. The validity of reopening the assessment.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC”, BENCH MUMBAI
Before: SHRI R.C.SHARMA, AM &
आदेश / O R D E R PER R.C.SHARMA (A.M):
This is an appeal filed by the Revenue and Cross Objection by the assessee against the order of CIT(A) -20, Mumbai dated 27/02/2017 in the matter of order passed u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961.
In the appeal filed by the revenue, revenue is aggrieved by the action of CIT(A) for assessing the income under the head income from business, which was assessed by the AO as income from House property. I found that CIT(A) has treated the income so offered by the assessee as income
CO 203/Mum/2017 M/s. Brindaban Builders Pvt. Ltd., from business after having the following observation of the Tribunal in assessee’s own case dated 03/10/2012. The precise observation of the CIT(A) was as under:- “7. I have perused the assessment order and submissions made by the appellant in this regard. The only issue in the present appeal is whether the income from letting of the property is to be assessed as business income or income from house property. It is noted that the issue at hand is a recurring one which has been decided in the favour of the appellant by the Hon'ble ITAT Mumbai „B' Bench vide its order dated 03-10-2012 in the ITA No.6902/Mum/2011. The Hon'ble Tribunal while allowing relief to the assessee on this issue had noted that the assessee was engaged in letting of premises with rendering of services and facilities and the entire activity of the assessee was such that the letting of the property was in the nature of business rations. It was held by the Hon'ble ITAT that the income received by the assessee was not only from letting out, but it is because of facilities and services rendered and so should be assessed under the head business income. Since the facts of the present case are identical to A.Y.2008-09, it is noted that the directions of the Hon'ble ITAT in assessee's own case for A.Y.2008-09 are applicable to the present case. In view of this discussion and respectfully following the judgment of the Hon'ble ITAT Mumbai for A.Y.2008-09 the additions made by the A.O, cannot be sustained in appeal and are directed to be deleted. Accordingly the ground nos. 1 to 3 of appeal are allowed.”
In earlier years the department had accepted the income so offered by assessee as income from business.
I found that tribunal have held the income as income arising from hiring of office premises was assessable as income from business, accordingly I do not find any infirmity in the order of CIT(A) for treating the hiring income as income from business by following the decision of the Tribunal holding that income is accessible under the head income from business. Facts and circumstances during the year under consideration i.e A.Y.2007-08 are parametria, therefore, following the order of Tribunal in
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