TaxTMI 
TaxTMI 
2017 (11) TMI 509
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....es are business income instead of income assessed by Assessing Officer (in short AO) as from house property i.e. rental income. The Revenue has raised following ground in AY 2006-07: - "1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that Business Centre Service charges of Rs. 1,47,71,318/- should be treated as "Business Income" instead of "Income from house Property", without appreciating the facts of the case." We take facts from AY 2006-07 and decide the issue for the reason that the facts and circumstances are exactly identical in all the three years. 3. Briefly stated facts are that the AO, during the course of assessment proceedings, on perusal of profit and loss account noticed that the assessee has credited in the profit and loss account the following items of income: - "1. Business Centre Service Charges Rs. 1,47,71,318/- 2. Interest on fixed deposits 1,74,321/- Total 1,49,45,639/-." 4. The AO noticed that the assessee has also debited various expenses against these receipts including interest and finance charges. The assessee have entered into an agreement i.e. business conducting agreement date....
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..... Aggrieved, assessee preferred the appeal before CIT(A). The CIT(A) after going through the decision of Hon'ble Supreme Court decision in the case of Shambhu Investment (P) Ltd. vs CIT (2003) 263 ITR 143 (SC) treated the business center receipts as business income by observing in Para 4.3 as under: - "4.3. 1 have carefully considered the facts of the case, the submissions of the appellant, assessment order. The A.O. has given importance to the words used in documents furnished to bank to conclude that receipts were rent. The appellant's submission that this cannot be sole criteria for construing the income received from income from house property is accepted. Where a receipt is a business receipt or a receipt for mere letting out of an immovable property would depend on facts of the case. Applying the ratio laid down in CIT Vs. Shambhu Investment (P) Ltd. 263 ITR 143 [SC]. If property is let out, with intention to have rental income it would be assessable as income from house property. On the other hand if th2 primary object is to exploit property by complex commercial activities, the income from the same should be considered as business income. The business con....
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....usiness income if letting out of the premises itself is the business of the assessee. In view of the above the learned Sr. DR requested for setting aside of these three appeals to the file to the AO to deciding the issue on the receipts earned by assessee whether the same is business income or income from house property. On the other hand, the learned Counsel for the assessee, Dinkle H. Hariya, Chartered Accountant could not contest or distinguish the decision of Hon'ble Supreme Court. 7. In view of the above facts and circumstances, we are of the considered view that let the matter be restored back to the file of the AO for deciding the issue in term of the decision of Hon'ble Supreme Court in the case of Raj Dadarkar & Associates (supra). The AO will examine the factual aspects of the case and will decide the issue after considering this judgment and other judgments as cited by assessee if any. Accordingly, this issue of the Revenue's appeal is allowed for statistical purposes. 8. The next issue in ITA No. 2742 & 2744/Mum/2013 for AY 2007-08 and 2009-10 is as regards to the order of CIT(A) holding that the interest on fixed deposits with bank as business income whe....
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....ediate nexus with the assessee's business." 9. Ground No. 1 to 4 is the common ground as was in AY 2006-07. Since, we have already restored the matter to Ld. AO, these grounds stands allowed for statistical purposes. 10. Ground No. 5 is related with treatment of interest on FDR earned by the assessee. Briefly stated facts are that the AO during the course of assessment proceedings noticed from the P & L Account that the assessee has disclosed interest on fixed deposits at Rs. 1,98,803/- and treated the same as income from business. The AO treated the same as income from other sources as interest income on fixed deposit cannot be business of the assessee and hence he taxed the same as income from other sources. Aggrieved, assessee preferred he appeal before CIT(A). 11. The CIT(A) after going through the submissions of the assessee held that these fixed deposits with the company are kept for taking loan which was used for the purpose of business. Hence, he treated the same as business income by observing in Para 7.2 of his appellate order as under: - "7.2 I have considered the submissions of the appellant and the order of the AO. The appellant had kept a fixed ....
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.... the assessee filed condonation petition supported by affidavit stating the reasons for delay, the reasons given in Para 4 to 10 reads as under: - "4. I say that the department filed an appeal under section 250 of the income tax act, 1961 ("the Act") before the Hon'ble Tribunal against the appellate order on 26.04.2012. However, Niyman Mall was not served with a copy of this appeal memo. Therefore, when the appeal was fixed for hearing on 24.06.2013, this fact was pointed out before the Hon'ble Tribunal and the appeal was adjourned accordingly. 5. I say that Niyaman mall thereafter purused matter with the AO. It appears that the appeal memo was, thereafter handed over to Mr. Nishikant Bharti, Accounts Assistant of a group company -future market Networks Ltd., somewhere in July 2013 when he was visiting Aayakar Bhavan for some other work and he happened to the visit the AO. 6. Accordingly, the last day for filing the Cross objection before the Hon'ble Tribunal was within thirty days thereafter. However, for the reasons recorded herein below, the Cross objection was filed on 7th September, 2016. 7. I say that during the material time, Niyman Mall's entire records we....