TaxTMI 
TaxTMI 
2017 (12) TMI 789
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....ng to the assessee is chargeable to tax in the hands of another company Ambience Development and Infrastructure Pvt. Ltd by virtue of agreement dated 31.03.2008:- "1. That the Ld. CIT(A) erred in law and on facts in deleting the addition of Rs. 7,61,90,927/- (after giving 30% deduction on account of house property income) made on account of lease rental income without appreciating the fact that the assessee is the legal owner of the property in line with section 60 of the Income Tax Act, 1961. 2. That the Ld. CIT(A) erred in law and on facts in deleting the addition and ignoring the fact that her predecessor Ltd. CIT(A) has confirmed the addition on the same ground. 3. (a) The order of the CIT (A) is erroneous and not tenable in law and on facts." 3. On identical facts and circumstances the revenue has raised the following grounds of appeal in ITA No. 6873/Del/2014 for the Assessment Year 2010-11:- "1. The Ld. Commissioner of Income Tax (Appeals) erred in law and on facts of the case in deleting the addition of Rs. 10,13,30,442/- made by A.O. on protective basis in the case of M/s Ambience Developers and Infrastructures Pvt. Ltd. and the ....
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.... Rs. 101330442/- included in the total income of the assessee on protective basis under the head "income from house property" made by the AO was deleted. The revenue has raised following grounds of appeal in ITA No. 6872/Del/2014 for the Assessment Year 2010-11:- "1. The Ld. Commissioner of Income Tax (Appeals) erred in law and on facts of the case in deleting the addition of Rs. 10,13,30,442/- made by A.O. on account of lease rental on protective basis. 2. (a) The order of the CIT (A) is erroneous and not tenable in law and on facts." 7. The assessee has raised the following grounds of appeal in CO. No. 377/Del/2015 in the ITA No. 6872/Del/2014 for the Assessment Year 2010-11:- "1. In not accepting the lease rentals received from retail spaces of Ambience Hotels and Resorts Pvt. Ltd. (AHRL) and offered for taxation in its hands under an agreement in lieu of interest free deposit of Rs. 75 crores given to AHRL and treating the same income in the hands of AHRL. 2. In not accepting the concept of beneficial ownership of the property in possession and enjoyment as held by the apex court in CIT V. Podar Cement Pvt. Ltd. (1997) ....
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....o. 345 and 355/Del/2014 and ITA No. 413/Del/2014. He further submitted that the assessee‟s miscellaneous application filed on 16.08.2007 for rectification of the order of the coordinate bench are pending for decision. He, therefore, submitted that these appeals may be adjourned till the decision in the miscellaneous application. 11. The ld DR strongly objected to this and submitted that whatever may be the decision in that particular miscellaneous application, it shall apply if the assessee prefers similar miscellaneous applications in these appeals too. He submitted that issue is squarely covered by the order of the coordinate bench, hence, it should be decided. 12. We have carefully considered the rival contentions. The brief controversy involved is that in whose hands lease income from shops is assessable, in the hands of Ambience Hotels and Resort Pvt. Ltd, or Ambience Developer and Infrastructures Pvt. Ltd. According to the ld AO it should be charged to tax in the hands of Ambience Hotels and Resort Pvt. Ltd whereas, the ld CIT(A) held that same is chargeable to tax in the hands of Ambience Developers and Infrastructure Pvt. Ltd. The coordinate bench while deciding....
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..... Ltd. (in short, AHRPL) on 31.12.2009 at Rs. 3,82,40,3030/- and Rs. 5,73,28,357/- respectively under section 143 (3) of the Income-tax Act, 1961 (for short „the Act‟). Subsequently, the Commissioner of Income-tax, Central-II, New Delhi vide order dated 29.03.2012 set aside the assessment order u/s 263 of the Act and directed the Assessing Officer to assess the lease income from leasing of shops/rental space in the hotel in assessee‟s hand after making proper enquiries and verification. 6. During the assessment proceedings, AO noticed in case of ADIPL that assessee has projected lease and licence charges of Rs. 29,18,07,201/- which includes lease rental of Rs. 6,27,84,240/- pertaining to leasing of retail space in Ambience Hotel, Gurgaon, in its return of income. AO further noticed that the space in question is ownership of AHRPL but assessee is showing income from letting out the shop and space in its hands on the basis of some agreement entered into between ADIPL and AHRPL for a consideration of Rs. 75,00,00,000/-. AO came to the conclusion that since the income of Rs. 6,27,84,240/- being lease rental has already been taxed in the hands of owner company....
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....s right to manage and carry on business as per Agreement (supra) entered into between the AHRPL and ADIPL and relied upon decision rendered by Hon‟ble Apex Court in CIT vs. Poddar Cement Pvt. Ltd. - (1997) 226 ITR 625 (SC). 12. The ratio of the decision rendered by Hon‟ble Apex Court in the case of Poddar Cement Pvt. Ltd. (supra) is that a person who is entitled to enjoy the income from the property was liable to tax on such income on the principle that who has the benefit will have the burden as well and requirement of ownership on the basis of title is not required for taxing the income. 13. In the instant case, the entire arrangement of transferring of shops and retail space by AHRPL to ADIPL is based upon agreement dated 31.03.2008 entered into between the AHRPL and ADIPL, the operative clauses thereof are reproduced as under for ready reference :- "1. That in consideration of abovesaid deposit of Rs. 75,00,000/- (Rupees Seventy Five Crores Only), the First Party doth hereby agrees to grant and assign in favour of the Second Party all its rights and interest to lease and manage the Said Space or any part thereof and to receive and appropriate to its o....
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....head income from house property by returning following findings :- "5.1.5 On perusal of the details on record, I find that the appellant company, ADIPL even after showing the above lease income in its hands, had declared loss for the year under consideration in its return, where as the appellant company i.e. AHRL was running into profits. In my considered view, the entire arrangement was made by the appellant to avoid incidence of tax in its hands. Reliance is placed in the present case on the judicial pronouncement of the Hon'ble Apex Court in the case of Smt. Tara Devi Aggarwal, which is clearly applicable in this case. ADIPL, a loss making company, had shown the income belonging its group company, i.e. the appellant company AHRL, a profit making company in its return to be assessed in its hands in order to assist the appellant company to avoid tax payment. Section 60 is merely a declaratory of a principle which is well settled under the Income tax law, namely, the profits on their coming into existence attract tax at that point and the revenue is not concerned with the subsequent application of the profits." 16. In view of what has been discussed above, we are of....