TaxTMI 
TaxTMI 
2018 (4) TMI 1349
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....NCOME FROM HOUSE PROPERTY" 1.1 On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in upholding the action of the Deputy Commissioner of Income Tax, Central Circle - 3(4), Mumbai ('the AO') in assessing the license fees received from the composite letting of property under the head "Income from House Property". 1.2 He failed to appreciate and ought to have held that: a. the aforesaid property has been let out along with furniture, fixtures and other amenities from the A.Y, 2002-03 and have since been assessed under the head Profits and Gains of Business or Profession in all assessments completed under section 143(3) of the Act from A.Y. 2002-03 to A.Y. 2008-09. There has not been any change in the activity of the Appellant during the captioned Assessment Year. In absence of change in facts, the license fees cannot be assessed under the head Income from House Property; b. the mere fact that the Appellant has not expanded her business activity cannot be a basis to treat the income as Income from House Property. 1.3 The Appellant, prays that the License fees be treated as income under the head "Profits and gains of Business and....
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.... the ground that even without considering such deduction the assessed income is below the returned income. 4.3 The Appellant, therefore, prays that the CIT(A) be directed to adjudicate the ground regarding non-allowability by the Assessing Officer of maintenance charges while computing annual value of let out properties. WITHOUT PREJUDICE TO GROUNDS I, II, III and IV. GROUND V: RETURNED INCOME HELD TO BE TOTAL INCOME MERELY BECAUSE IT IS GREATER THAN INCOME AS COMPUTED BY THE ASSESSING OFFICER. 5.1 The CIT(A) erred in confirming the action of the Assessing Officer in assessing the total income to be the returned income solely for the reason that the returned income was greater than the income as assessed by him merely because the CBDT circular states so. 5.2 He failed to appreciate and ought to have held that the total income has to be computed in accordance with the provisions of the Act and that an excessive amount returned by the Appellant cannot be assessed to tax merely because it has been returned or that the CBDT circular states so. Since it is the duty of the Assessing Officer to correctly compute the income. 5.3 The Appellant prays that subject to the cla....
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....s drawn by learned counsel for the assessee to the decision of the tribunal in said orders. The Ld. DR fairly agreed that the said issue in ground no. (V) is covered by the decision of the tribunal in assessee own case in ITA No. 273/Mum/2015 and 274/Mum/2045 for AY 2010-11 and 2011-12 respectively vide common orders dated 28.07.2017. 6. We have considered rival contentions and have perused the material on record . We have observed that the assessee has offered for taxation income from letting of flats as business income which was assessed by the AO as income from house property , wherein the assessee agreed to be assessed under the head „Income of house property‟ with respect to the letting of the flats instead of its earlier claim as filed in return of income to have earned income from business from letting of these flats. However , after assessing the said income of the assessee under the head „Income from house property‟, the AO has not given full effect to is own decision to assessee assessee‟s income as income from house property because of the reason that the assessed income went down below the returned income . The authorities below retained ....
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....herefore, while computing the tax liability the Assessing Officer has to give full effect to the income computed by him by adopting such approach. Merely because in the process of such computation the income determined by him becomes lower than the income returned by the assessee, the Assessing Officer for the purpose of computation of tax liability cannot adopt the income returned by the assessee. Once the Assessing Officer takes a decision to reject the claim made by the assessee in the return of income, he has to give full effect to his decision and cannot apply his decision in a selective manner. When the Assessing Officer proceeded to compute the income from letting out of property as house property income, he has to allow the assessee the statutory benefits attached to such income. In this regard, the CBDT circular referred to above by the learned Commissioner (Appeals) cannot come to the rescue of the Revenue. As held by the Hon'ble Gujarat High Court in Gujarat Gas Co. (supra), the CBDT instructions as contained in Circular no.549 dated 31st October 1989 cannot over ride the statutory provisions contained under the Act, hence, such instructions of CBDT cannot bind the Asses....