TaxTMI 
TaxTMI 
2006 (5) TMI 45
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....taken from I. T. A. No. 16 of 2005. The substantial question of law sought to be raised are as under: "(i) (a) That whether, under the facts and circumstances of the case, the assessing authority is justified in taking the action under section 148 and making the reassessment by changing the head of the income from business income to rental income based on the change of opinion and without bringing any material or evidence to justify the issue of notice under section 148 and there being interpretation of law and hence the proceedings are unjurisdictional and need to be quashed. (b) That, under the facts and circumstances of the case, the Commissioner of Income-tax (Appeals) and Tribunal were justified in not adjudicating upon the issue....
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....;Rs.1,27,020." 2 The assessee filed its return of income on September 16, 1993, declaring an income of Rs. 26,400 which was later on revised on January 18, 1994, declaring the income at Rs. 4,800 only. Though, the assessee derived the income of Rs. 1,73,894 from renting out building and machinery against which it claimed expenditure of Rs. 1,27,020 including remuneration paid to partners but the same was being shown as income from business. Since in the opinion of the Assessing Officer income chargeable to tax had escaped assessment, notice under section 148 of the Income-tax Act, 1961 (for short "the Act") was issued to the assessee. In response to the notice, the assessee reiterated its earlier return filed declaring the income at Rs. ....
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.... through the material available on record as well as case law and the earlier order of the Tribunal in the case of the assessee. Whereas the assessee has relied on order of the Tribunal, the learned Departmental Representative has subsequently raised a point as to the intention of the assessee of enjoying income in the form of rental only and not as business income. We find that facts in the assessment years 1980-81 to 1983-84 were somewhat different as the assessee had claimed its closure of business only some time ago and there could be an intention of the assessee to restart its business and the assessee was given benefit of such intention as the business had closed down only some time ago But herein these cases we find that the assessee....
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.... submissions which were made before the authorities to the effect that the issue in the present case already stood settled by the earlier order of the Tribunal passed in favour of the assessee and there being no change in the facts and in the circumstances, the same should have been followed by the Tribunal and further that the closure of the business was temporary and the assessee still had the intention to restart the same. Both these issues have been dealt with in detailed by the Tribunal. While deciding the appeals for the assessment years 1980-81 to 1983-84, the Tribunal had given the benefit of intention of the assessee to restart the business, which according to him, had to be closed temporarily at that time because of depression in ....
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....om letting of the machinery on hiring for a temporary period was held to be income from the business. 10 However, in the facts and circumstances of the case in hand, as found by the Tribunal, it is clear that the intention of the assessee was not to restart business which was closed about 17 years back. Closure of the business ended ultimately with the sale of land, etc. 11 Inthe case of CIT v. G. V. Rattaiah and Co. [2002] 256 ITR 351, the Andhra Pradesh High Court, while answering the questions referred to the court against the Revenue, held that the finding of the Tribunal could not be lightly interfered with unless the court finds the finding ex facie erroneous and not supported by any evidence. Further, in the above referred case....
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....ding that the premises were not let out for being exploited commercially and, therefore, a question of law does arise from the order of the Tribunal. It is true that the Tribunal has not recorded any positive finding on this point but while dismissing the appeal, it has upheld the finding recorded by the first appellate authority that the let out premises were leased out for the commercial purpose with a motive to reduce the burden of expenditure and to reduce the loss. It would have been better if the Tribunal had recorded its own positive finding but on the facts we find that the assessee had shifted its premises from the old place to the new place due to commercial expediency and let out the old premises with a motive to reduce the burde....