TaxTMI 
TaxTMI 
2014 (1) TMI 700
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....e arising in the instant appeal, being agitated by the assessee per four grounds, is the assessment of income in the sum of Rs.9,25,300/- earned by it by way of running and maintaining a business centre, as 'income from house property', as against 'income from business' returned by it. 2.2 It would be relevant to recount the background facts of the case. The assessee is a company registered as a Non-Banking Financial Company (NBFC) with the Reserve Bank of India (RBI). It purchased an office at A-14, Shree Ram Industrial Estate, G. D. Ambekar Marg, Wadala (W), Mumbai in the year 1996, which was used by it, being also its registered office, as its office premises from 1996 to 2004, whereat the business operations stood scaled down considera....
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....f fact or as to law; the issue under reference being without doubt a mixed question of fact and law, attends the same. This is more so as the ld. CIT(A) has also distinguished the decision/s relied upon by the assessee. It was, therefore, incumbent on the assessee to show as to what error in applying the law or incorrect assumption of facts inflicts his order for us to reverse, vacate, modify the findings by the ld. CIT(A), while the assessee does none of it. Be that as it may, we proceed to decide the appeal on the basis of the material on record. It would again be relevant to delineate the law attending the issue at hand. Owning of house property cannot be considered as a business within the meaning of the Act, which provides for separat....
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....nt' income could be considered as a business receipt. Examples toward this would be of a 'hotel' or a 'guest-house', to cite some. In each case, therefore, the facts would need to be examined to see the dominant object or purpose which is sought to be achieved. In fact, even here, depending on the facts and circumstances of the case, the courts have advocated or upheld the course of bifurcation of the income, i.e., as attributable to the services, and that to the house property. The determinative test would lie in ascertaining the dominant object of the letting or the character of the arrangement, considered as a composite one. 3.2 Coming to the facts of the present case, the assessee claims to be running a business centre. We could apprec....
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....e said facilities are required for an effective utilization and enjoyment of the house property itself. It is also, as we see it, not a case falling u/s. 56(1)(iii), i.e., the letting of assets, of which letting of building is an integral part. We observe that the assessee has incurred expenditure on electricity. In this regard, it is noted that the assessee also continues to maintain its office from the same premises, having also kept some staff. As such, a part of the electricity expenditure would also be toward the assessee's own office. The manner of computing the rental income has not been disclosed, so that it would include reimbursement of electricity expenses, either at a fixed cost or on the basis of allocation at a fixed percentag....
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....e necessary for the purpose of maintaining the corporate existence and keeping the business operations in place. The same has not been allowed by the Revenue as no business was carried out during the year. We find merit in the same as any expenditure u/ss.30 to 37 could only be allowed in computing the income in respect of any business or profession carried out by the assessee at any time during the relevant previous year. The assessee before us, as also before the authorities below, has claimed that it is exploring business opportunities in the NBFC sector, having employed specific employees for the same. In our view, if the assessee could demonstrate this fact, i.e., of actually exploring the business opportunity in the NBFC sector, it ca....