TaxTMI 
TaxTMI 
2017 (7) TMI 609
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....ed notice under section 263 of the Act which is reproduced in the impugned order in which it was briefly noted that assessee earned rental income from commercial premises and income from providing other related side by facilities, services and activities to the tenants/lessee of commercial premises in the shape of Air Conditioner, power and back-up, Gen Set, Slider, A.C. repairs and maintenance, booking, canteen, cycle stand etc. and earned net profit of Rs. 48,66,505/- after claiming expenses of Rs. 2.60 Cr. The assessee declared income from house property as well as business income. The ld. Pr. CIT also noted that assessment order passed by the Assessing Officer does not appear to be reasonable because assessee was involved in letting out of commercial properties and providing facilities, services etc. to its let out properties which make all the receipts from letting out these commercial properties and related facilities etc. to these let out properties as 'income from house property' instead from 'business income'. 3. The assessee in reply to the notice under section 263 of the Act submitted a reply before ld. Pr. CIT which is reproduced in the impugned order in which the as....
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..... CIT noted that Assessing Officer has not called for the details on the basis of which the issues have to be decided. The ld. Pr. CIT also did not accept contention of the assessee that in earlier year, the income earned by assessee by providing facilities was considered as business income. The ld. Pr.CIT, therefore, held that assessment order passed by the Assessing Officer is erroneous and prejudicial to the interest of revenue. The assessment order was set aside with direction to decide the matter afresh in accordance with law. 5. We have heard ld. Representatives of both the parties and perused the material on record. The ld. counsel for the assessee referred to various pages in the Paper Book from PB-51 to 82 which are assessment orders under section 143(3) of the Act and computation of assessable income for the assessment years 2005-06, 2006-07, 2008-09, 2009-10 and 2010-11. The assessee submitted before authorities below that it has received rent from various tenants, mostly companies and same was assessed under the head 'income from house property' in earlier years. The assessee filed copies of the lease deeds executed between assessee and the tenants. In the copies of ....
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....CIT that in Lease Deed, no installation of different services has been promised or undertaken to be supplied would clearly show it is business income of assessee different from rental income. The ld. counsel for the assessee referred to PB 132 which is reply filed before Assessing Officer at assessment stage in which assessee explained same facts that assessee received rent from various tenants which are assessed under the head 'income from house property'. The assessee also received income from various services rendered to the tenants as per agreements which are assessed under the head 'income from business & profession'. The contention of ld. DR that Assessing Officer has not applied his mind to the facts of the case and passed non-speaking order is rejected because the Assessing Officer considered this issue at assessment stage after calling for the reply of the assessee on the same issue which have already been considered in detail in earlier years, accepted the claim of the assessee that income received on account of other facilities provided to the tenants was business income of the assessee. 6. Hon'ble Punjab & Haryana High Court in the case of Hari Iron Trading Co. V....
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....rinters 264 ITR 276, decision of Delhi High Court in the case of Escorts Ltd. 338 ITR 435, decision of Madhya Pradesh High Court in the case of Godawari Corporation Ltd. 156 ITR 835 and decision of Hon'ble Supreme Court in the case of Radha Soami Satsang Vs CIT 193 ITR 321. Hon'ble Punjab & Haryana High Court in the case of Vikas Chemi Gum (India) 276 ITR 32 held that "When same source of income in 1986-97 was not challenged by the Revenue, it is not open to challenge the same source of income in subsequent year". The ld. counsel for the assessee, therefore, rightly contended that the impugned order under section 263 have been passed only on the basis of two judgements of Hon'ble Supreme Court in the cases of M/s Shambu Investment Pvt. Ltd. and M/s Sultan Brothers Pvt. Ltd. (supra) without bringing any material on record against the assessee. 7(i) The ld. counsel for the assessee relied upon decision of the Hon'ble Supreme Court in the case of Chennai Properties & Investment Ltd. Vs CIT 373 ITR 673 in which it was held that, "The letting of the properties was, in-fact, the business of the assessee. The assessee, therefore, rightly disclosed the income under the h....
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....vt. Ltd. 249 ITR 47 and decision of the Hon'ble Punjab & Haryana High Court in the case of Sheetal Khurana Foods Pvt. Ltd. Vs ITAT & Ors. 335 ITR 1 in support of the contention that when property have been let out and other facilities have been provided by the assessee to the tenants, the entire income should be considered as 'income from house property'. However, we may note here that these are proceedings under section 263 of the Act and in these proceedings, the Revenue Department shall have to satisfy the conditions that the assessment order is erroneous and prejudicial to the interest of Revenue. 9. Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. Vs CIT 243 ITR 83 held as under : "Every loss of revenue as a consequence of an order of the Assessing Officer, cannot be treated as prejudicial to the interests of the Revenue, for example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the....