TaxTMI 
TaxTMI 
2017 (6) TMI 1153
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....bmissions and perused the material available on record. In view of the above, we are reproducing hereunder the relevant portion from the aforesaid order of the Tribunal dated 26/11/2010:- "3. Brief facts of the case are that the assessee is engaged in the business activities of club house and resort and provides recreation facilities of swimming pool, indoor games, joyride and entertainments. The assessee's resort is located in Mumbai Pune High way at Village Vineigaon, Taluka, Khalapur, Dist. Raigad. The assessee took over the management of the existing company. During the relevant year to the assessment year under consideration, the development activities of the building were also in progress. The assessee leased out the club rooms and other infrastructures in the building to MMTI Educational Research Trust, Veera Desai Road, Andheri (W), Mumbai for a sum of Rs. 20,52,000/- The assessee admitted the rental income as business income. The AO questioned the nature of the income and asked the assessee to explain the nature of rent. The assessee has stated before the AO as the development activities of the clubrooms and other work was in progress, the assessee thought it fit ....
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....hat the assessee had not started the business activities as per its own objective as given in the Memorandum Of Association. The portion of the premises was let out for the purposes of earning the income to the MMTI Educational. Research Trust for holding the classes and therefore even the premises was let out for carrying out any business of resort or hotels as per the business object of the assessee. Therefore, it is the case of earning the income by letting out the business premises and not exploiting the business asset. He has relied upon the decision of the Hon. Supreme Court in the case of M/s Shambhu Investments Private Limited V/s CIT (263ITR 143). 7. We have considered the rival contentions and relevant record. It is undisputed fact that the assessee had not completed its construction work of the premises for running the business of club and resort. The part of the premises was leased out to MMTI Educational. Research Trust for a period of three years as per the lease agreement. Since the development work of the business premises was in progress, therefore, the portion which was leased out by the assessee was never utilized by the assessee for its business activit....
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....is own use for making profit for that business; but if the business never started or has started but ceased with no intention to be resumed, the assets also will cease to be business assets and the transaction will only be exploitation of property by an owner thereof, but not exploitation of business assets." 8. From the decision of the Hon. Supreme Court it is clear that no prescribed test can be laid down to ascertain whether the lease/rent received by the assessee would fall under the head "profit and gain of business or profession or "income from house property". The issue has to be determined on the basis of the facts and circumstances of the case. It was also held that if the assessee never started business or has started the business but ceased but no intention to resumption then the asset also will ceased to be a business asset. In the case of Commissioner Of Income Tax vs Mohiddin Hotels Pvt. Ltd. And Anr. (supra) the leased out premises was the hotel along with the business. Therefore, it was held that the intention was to exploit the hotel as business asset. In the case in hand, it was not leased out of premises along with the business but it was only a part of ....
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....ax (Appeal) and such plea has been preferred for the first time before the Tribunal. The ld. counsel relied upon the decision in the case of CIT vs Smt. Rajkumari Vimla Devi & Ors. (2005) 279 ITR 360 (All.) 3.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee is engaged in the business of club house & Resorts, providing recreation facilities, swimming pool, indoor games, joy rides, etc. The assessee sold two plots namely plot no. 46/0, Kandhroli, Dist. Raigad and 42/2. It was explained that the stamp duty authorities valued the property/plot no.46 at Rs. 32,21,000/- against the amount of Rs. 22 lakh, received by the assessee and other plot at Rs. 88,48,000/- as against the amount of Rs. 58,27,800/-, actually received by the assessee. The Ld. Assessing Officer referred both the properties to the Valuation Officer, invoking the provisions of section 50C(2) of the Act. The Valuation Officer sent a preliminary valuation report dated 07/12/2009, whereby, he valued the plot no.46 at Rs. 24,52,200/- and the remaining plot at Rs. 66,45,398/-. The assessee objected to the report. However, the Valuation Offi....