PRITI NIMISH PATEL,MUMBAI vs. DCIT - CC-25, MUMBAI

The only grievance of the assessee relates to assessing rental income of Rs.29,04,000/- offered under the head income from house property, as business income.

Rival contentions have been heard and record perused. Facts in brief are that consequent to closure of business, the assessee has given its property on rent and was in receipt of licence fee income of Rs.29,04,000/-, which was offered as income from house property. During the course of assessment the AO observed that similar income was assessed as business income in the assessment year 2009-2010, but the assessee has not filed any appeal against that order, accordingly he 2 treated the income from house property as business income. By the impugned order CIT(A) confirmed the action of AO, against which assessee is in further appeal before us.

I do not find any merit in the orders of lower authorities, insofar as the issue is directly covered by the decision of Hon’ble Supreme Court in the case of Shambhu Investments Pvt. Ltd.,263 ITR 143, wherein it was held that income realised by owner by way of rental income from a building is assessable under the head income from house property. Merely because in the assessment year 2009-10, the assessee has not filed any appeal against the treatment of income offered under the head income from house property as business income, will not preclude the assessee to put a rightful claim of its income which is duly covered by the decision of Hon’ble Supreme Court in the case of Shambhu Investments (supra). Accordingly, the AO is directed to compute the income under the head income from house property and allow necessary deduction u/s.24 of the I.T.Act.

In the result, appeal of the assessee is allowed. Order pronounced in the open court on this 27/07/ 2016. Sd/- (R.C.SHARMA) ऱेखा सदस्य / ACCOUNTANT MEMBER भुंफई Mumbai; ददनांक Dated 2707/2016 प्र.कु.मभ/pkm, नन.स/ PS आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to : अऩीराथी / The Appellant 1. प्रत्मथी / The Respondent. 2. आमकय आमुक्त(अऩीर) / The CIT(A), Mumbai. 3. आमकय आमुक्त / CIT 4. ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / DR, ITAT, Mumbai 5.