Tribunal decision: Rental & parking income as business income, expenses review ordered

The Tribunal directed the Assessing Officer to treat rental income and parking space income as business income, emphasizing consistency with previous years. The Tribunal also instructed a re-decision on the disallowance of expenses and unabsorbed depreciation, providing the assessee with a reasonable opportunity to be heard. The CIT(A)'s decision to tax parking space income as other sources was overturned in favor of treating it as business income due to its connection to the building. The Tribunal did not address the issue of statutory deduction for parking space income.

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Issues:
1. Assessment of income from a commercial building as rental income under the head income from house property instead of income from business.
2. Assessment of income from parking space of a commercial building as income from other sources instead of income from business.
3. Disallowance made by the Assessing Officer as claimed in the Income & Expenditure Account.
4. Not allowing set off of unabsorbed brought forward depreciation.
5. Statutory deduction from income from parking space.

Issue 1: Assessment of Rental Income:
The Assessing Officer assessed the rent of a portion of a cinema building as income from house property and rent received for parking area as income from other sources. The CIT(A) confirmed this assessment. However, the Tribunal noted that the facts and circumstances remained the same as in earlier years when the rent was accepted as business income. The Tribunal emphasized the principle of consistency and directed the Assessing Officer to treat the rent from the building as business income, as shown by the assessee.

Issue 2: Assessment of Parking Space Income:
The CIT(A) taxed the income from the parking space as income from other sources, stating that it was not used for parking vehicles of cinema visitors. However, the Tribunal directed that since the parking space was appurtenant to the building, the income from it should be treated as business income. The Assessing Officer was instructed to follow this direction.

Issue 3: Disallowance in Income & Expenditure Account:
The CIT(A) did not provide any finding on the disallowance of expenses claimed in the profit & loss account. The Tribunal directed the Assessing Officer to re-decide this issue along with the issue of unabsorbed brought forward depreciation, considering the treatment of income from letting out the cinema building and parking space.

Issue 4: Set off of Unabsorbed Depreciation:
The CIT(A) confirmed the Assessing Officer's decision of not allowing the set off of unabsorbed brought forward depreciation. However, the Tribunal did not provide a specific direction on this issue in the judgment.

Issue 5: Statutory Deduction for Parking Space Income:
The assessee claimed that statutory deduction should have been allowed from the income from the parking space. The Tribunal did not address this issue specifically in the judgment.

In conclusion, the Tribunal partly allowed the appeal, directing the Assessing Officer to treat the rental income and parking space income as business income, re-decide the disallowance of expenses and unabsorbed depreciation, and provide a reasonable opportunity for the assessee to be heard.

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