TaxTMI 
TaxTMI 
2012 (2) TMI 681
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....ises which had been used by the appellant for its business and offered to tax as 'business income', but assessed under the head 'income from house property', by the AO without assigning any reason for assessing the same under the said head". 3. As per the P&L account, the assessee had shown rental income of ₹ 8,79,158/- and interest receipts of ₹ 2,39,903/- as incomes from business and profession. It was noted by the AO that the property bearing No. G-701 and 702 on which rental income was received was in the name of the assessee company and had been let out at annual rent of ₹ 8,79,158/- on which the assessee had paid municipal taxes of ₹ 26,030/-. The AO computed the rental income as income from house property aft....
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....the deposits kept with the bank. He was of the view that the income earned by the assessee is the income from other sources and not the business income. The said view of the AO was confirmed by the CIT(A) following the decisions in the case of Cambay Electric Supply Industrial Co. Ltd., 1978 CTR (SC) 50; M/s Tuticorin Alkali Chemicals & Fertilizers Ltd. Vs. CIT, 227 ITR 172(SC); Nanaji Topen Bhai and Co., 243 ITR 192(SC); CIT Vs. V.P. Gopinath, 248 ITR 449 (SC) and also of Raja K. Narayan Singh, 16 ITR 325 (PC). Aggrieved, the assessee is in appeal before us. 8. Before us, the learned counsel for the assessee submitted that deposits were kept with the bank as margin money and, therefore, interest received thereon is business income. He, t....
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....ceived on the deposits kept with the bank as 'income from other sources'. In view of the said finding, this ground of appeal of the assessee is dismissed. 13. Ground No. 4 is relating to the rental income received by the assessee from Shiv Saga property amounting to ₹ 29,16,242/-. 14. The AO noted that the assessee had received rental income of ₹ 29,16,241/- from one, M/s Chordia Fashions Pvt. ltd. which was not reflected by the assessee in the return of income. It was claimed by the assessee during the course of assessment proceedings that the amount received by the assessee was not the income of the assessee but the same was received on behalf of one Shri J.M. Shah, who is the co-owner of Shiv Sagar Property. Before the AO,....
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.... title was not transferred to Mr. J.M. Shah and even as per the agreement dated 13/11/2003 the right in the said property had not been passed to Mr. J.M. Shah and, therefore, the assessee is the real owner and the rental receipts of ₹ 29,16,241/- treated as income of the assessee. Aggrieved by the order of the CIT(A), the assessee is in appeal before us. 16. The learned counsel for the assessee submitted that the original property was purchased jointly and subsequently the assessee had entered into sale agreement with Mr. J.M. shah on 04/01/1995 and from that date onwards the property has already been passed to Mr. J.M. Shah, therefore, the assessee is only collecting rent on behalf of Mr. J.M. shah and the same is not the income of ....
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.... given permission in Form No. 37-I of the Act. Subsequently, the assessee had also entered into leave & License agreement with M/s Chordia Fashions Pvt. ltd. wherein the assessee continued to be one of the three licensors. It shows that the assessee is continued to be the owner of the property. When the Bench asked a specific query as to why the property was not registered in the name of Mr. J.M. Shah, the assessee replied that the housing society was objected to the said deal, therefore, the assessee was unable to register the document in favour of Mr. J.M. Shah. So, the fact is that there is only a sale agreement between the assessee and Mr. J.M. Shah, which has not been executed because of the objection from the society. Therefore, on th....
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.... Supreme Court held that to tax the income of the assessee from the house property the assessee must be a person who can exercise the rights of the owner, not on behalf of the owner but in his own right. Therefore, this case is not applicable to the facts of the case under consideration as there is nothing on record to show that the assessee is not the owner of the property. In the case of CIT Vs. Podar Cement Pvt. Ltd. and Others,(supra), the Hon'ble Supreme Court held that a property cannot be owned by two persons, each one having independent and exclusive right over it. Hence, for the purpose of section 9 of the 1922 Act, the owner must be 'that person who can exercise the rights of the owner, not behalf of the owner but in his own right....