Assessee's income from property deemed business income by ITAT, not house property income.

The Income Tax Appellate Tribunal (ITAT) dismissed the Revenue's appeals and allowed the Assessee's Cross Objections, confirming the assessment of income as business income rather than income from house property. The ITAT upheld the CIT(A)'s decision, emphasizing the commercial exploitation of property by the appellant and considering the primary intention of the assessee in their activities. The ITAT referred to precedent and joint business agreements, ultimately ruling in favor of treating the income as business income.

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Issues involved: The judgment involves the treatment of business income as income from house property by the Assessing Officer (A.O.) in multiple assessment years, leading to appeals by the revenue and cross objections by the assessee.

Issue 1 - Treatment of Business Income: The appellant had two sources of income, one from providing business accommodation to diamond firms and the other from the sale of canteen coupons. The A.O. treated major receipts as income from house property and allowed a 30% deduction u/s.24, while considering the canteen coupons income as business income. The CIT(A) deleted the addition for certain years, emphasizing that the appellant's activities were organized, involved daily operations, and aimed at commercial exploitation of infrastructure. The CIT(A) referred to judicial pronouncements and highlighted the importance of assessing the primary intention of the assessee in exploiting the property commercially. The CIT(A) concluded that the income should be assessed as business income, not income from house property.

Issue 2 - Appeal by Revenue: The Revenue contended that the A.O. had provided detailed reasoning for assessing the income as income from house property and sought confirmation of the decision. However, the appellant argued that a similar case had been treated as income from business by the Hon'ble ITAT 'A' Bench, Ahmadabad, in a previous matter. The ITAT considered the facts and the case law cited by the appellant, including the joint business agreement, and upheld the CIT(A)'s decision. The ITAT found that the intention of the appellant was to exploit the property commercially, leading to the assessment of income as business income.

Conclusion: The ITAT dismissed the Revenue's appeals and allowed the Assessee's Cross Objections based on the precedent set by a similar case, confirming the assessment of the income as business income.

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