TaxTMI 
TaxTMI 
2016 (1) TMI 890
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....f convenience. ITA No. 6216/Mum/2013 - A.Y. 2008-09 2. The assessee has raised two substantive grounds of appeal. The issues in both these grounds are inter-linked and relates to the treatment of rental income under the head 'House property' against the claim of the assessee to be under the head 'business income' and simultaneously disallowance of business loss, 3. The assessee is engaged in the business of property leasing. While scrutinizing the return of income, the Assessing Officer noticed that the assessee has credited income of Rs. 23,49,497/- which as per Schedule 'J' of the P&L account consists of rent received of Rs. 22,50,000/- and miscellaneous income of Rs. 99,497/-. The Assessing Officer further found that the rental ....
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....ssee vehemently submitted that this issue has been elaborately discussed and decided by the Hon'ble Supreme Court in the case of Chennai Properties & Investments Ltd Vs CIT 373 ITR 0673. It is the say of the Ld. Counsel that in this case the Hon'ble Supreme Court has held that deciding factor is not ownership of land or leases but nature of activity of assessee and nature of operations in relation to them. The Hon'ble Supreme Court highlighted and stressed that objects of the company must also be kept in view to interpret the activities. The Ld. Counsel concluded that in that case letting of properties is infact is business of the assessee therefore the income was taxed under the head 'Income from business'. The Ld. Counsel referred to the ....
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....r statistical purpose. ITA No. 2775/M/2014 - A.Y. 2009-10 10. Vide ground No. 1,2 & 3, the assessee has challenged the assumption of jurisdiction by the CIT-6, Mumbai u/s. 263 of the Act. 11. Briefly stated the facts of the case are that the assessment was made on 7.12.2011 u/s. 143(3) of the Act in which the total income of the assessee which was a loss of Rs. 30,11,340/- was converted into a profit of Rs. 11,59,696/- by disallowing the claim of expenditure amounting to Rs. 41,71,036/-. 11.1. Invoking the powers conferred upon him u/s. 263 of the Act, the Commissioner issued a show cause notice dated 10.2.2014 by which the Ld. CIT(A) alleged that the AO failed to carry out all the relevant and meaningful enquiry which were warr....
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....fter examining the same, the AO made the assessment order u/s. 143(3) of the Act. 14. Per contra, the Ld. Departmental Representative strongly supported the order of the CIT. It is the say of the Ld. DR that the AO has completed the assessment by overlooking a very important fact that of filing of revised return by the assessee. The Ld. DR continued by arguing that since the AO has completely ignored the revised return, the entire assessment has become erroneous and prejudicial to the interest of the Revenue and there is no error in the assumption of jurisdiction by the Commissioner u/s. 263 of the Act. 15. Having heard the rival submissions at length, we have carefully perused the assessment order and the order of the Commissioner wi....
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....f law. The first objection is that the AO worked out the assessable income on the basis of original return electronically filed on 30.9.2009 declaring loss of Rs. 30,11,340/-. It is further alleged that the AO remained totally silent on the observations of the auditors that property was purchased only as stock-in-trade but inadvertently shown as fixed assets on which depreciation was claimed. It is also alleged that no details have been brought on record to show that there was composite rental agreement and the AO failed to examine that in the previous year assessment has been completed by treating rental income as Income from House property and not as business income. 16.1. Let us now examine these allegations in the light of the query ....
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....ts in totality in the light of the main objects of the company, we do not find any lack of enquiry on the part of the Officer for taxing the income under the head business income and not under the head income from house property. The AO has taken a view which may be different from the view of the Ld. Commissioner and assuming that the view taken by the AO is a loss to the Revenue but the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd (supra) has held that "every loss of Revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest of the Revenue", for e.g. when an Income Tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue or where ....