TaxTMI 
TaxTMI 
2018 (10) TMI 1636
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....he circumstances of the case and in law, the Ld. CIT(A) erred in holding that income from service charges of Rs. 1,68,39,526/- is chargeable under the head "Income from Business" instead of "Income from House Property," 4. "On the facts and in circumstances of the case and in law, the Ld. CIT(A) erred in relying upon the decision of Apex Court in the case of M/s Chennai Properties and Investments Ltd. which is quite distinguishable from the facts of the instant case. 5. The appellant prays that the order of the Ld. CIT[A) on the grounds be set aside and that of the Assessing Officer be restored." 6. "The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary." 3. The brief facts of the case are that the assessee filed its return of income on 30.09.2013 declaring total income to the tune of Rs. 1,60,510/-. Thereafter, the case was selected for scrutiny assessment under CASS. Statutory notices u/s 143(2) & 142(1) of the Act were issued and served upon the assessee. The assessee company is engaged in the business of development and construction of infrastructure projects, housing projects, commercial premises and allied bus....
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....bmissions of the appellant and order of the Assessing Officer in this connection it is noted that the assesses company had given its two industrial buildings Indiplex-l and lndiplex-ll on ease and had received licence fee of Rs. 2,52,59,282/-, service charges of Rs. 1,68,39,526, income from facilitation charges of ^ 1,57,000 and Common Area Maintenance charges of Rs. 25,01,615/- which were shown as business income. During the course of assessment proceedings, the Assessing Officer had made additions by treating the business income declared by the assessee to be in the nature of income from house property. The counsel of the assessee has vehemently opposed the additions the Assessing Officer and submitted that these be deleted. It is noted that assessed company is in the business of building and leasing premises of special nature as per Ihe requirements of the clients. The Company has installed special equipment and premises is designed to suit clients needs. It is not simply letting out a structure to earn rental income out of it is noted that on similar facts Hon'ble Supreme Court in the case of Chennai Properties and Investments Ltd. vs CIT [2015] 55 Taxmann.com 456 (SC) ha....
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....usiness whereas the same should be treated as income from house property, therefore, in the said circumstances the order passed by the CIT(A) is wrong against law and facts and is liable to be set aside. On the other hand, the Ld. Representative of the assessee has strongly relied upon the finding of the Ld. CIT(A) and also relied upon the order passed by the Hon'ble ITAT in the assessee's own case for the A.Y. 10-11 in ITA. No.261/M/2016 dated 08.11.2016. Before going further we deemed it necessary to advert the finding of the CIT(A) on record: - "The second, third and fourth grounds of appeal are of similar nature and are taken together as these pertain to head of income which the liability to pay tax arises. I have carefully considered the facts of the case, the submissions of the appellant and order of the Assessing Officer. In this connection it is noted that the assessee company had given its two industrial buildings Indiplex-I and Indiplex-II on lease and had received license fee of Rs. 1,99,73,433/- and service charges of Rs. 1,33,90,233/- which were shown as business income. During the course of assessment proceedings, the Assessing Officer had made additions by treating....
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....nd also relying upon the finding of the Hon'ble Supreme Court in the case of Chennai Properties and Investment Ltd. Vs. CIT (2015) 56 Taxmann.com 456 (SC) has allowed the claim of the assessee and treated the income from leave and lease and service charges as business income. Moreover, the facts are more clear when the Hon'ble ITAT has decided the issues in favour of the assessee while passing the order in the assessee's own case for the A.Y. 2010-11 in ITA. No. 261/M/2016 dated 08.11.2016 as Hon'ble ITAT has held as under:- "3. We have heard rival contentions and gone through the facts and circumstances of the case. We find that the assessee entered into leave and license agreement and service agreement separately in respect of leasing out of industrial premises and for providing services. The assessee company has given its two industrial buildings i.e. Indiplex-I and Indiplex-II on lease and received license fee of Rs. 25, 82,016/- and service charges of Rs. 21, 24,766/- , which was shown as business income. We find from the objects of the company as mentioned in the Memorandum of Association, the main objects of the Company was to acquire properties and construct and hold the ....
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....epairs and maintenance of the building and fire alarm and other safety features. In addition to the aforesaid services, the agreement also contains a residual clause whereby out client is to provide various assistance as may be requested by the licensee. Further out client submits that they have developed the entire property in to industrial complex with the requisite infrastructure facilities and they also provide various services to the licenses. In view of the above our client submits that they have let out the industrial units along with venous infrastructure facilities and they also provide various other services to the licensees. In addition to the aforesaid, out client would also like to state that the directors of our client are also employed fulltime to enable the smooth functioning and operation of the industrial complex and to look after the day to day activities which are involved in maintenance of the industrial units and also to cater the various requirements of the licensees. Directors Remuneration amounting to Rs. 15, 55, 000 is paid to the directors during the year and the same can be verified from note 9 of the "Schedule 16. Noted to Accounts." In view of the abov....