AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (8) TMI 21
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....learned Income Tax Appellate Tribunal, Madras B Bench, dated 5.8.2016 in ITA Nos.1179/Mds/2015 and 1180/Mds/2015 for the assessment years, 2010-11 and 2011-12, dismissing the appeals of the Revenue and upholding the order of the learned Commissioner of Income Tax (Appeals) II, Chennai, dated 3.11.2014 for the assessment years 2010-11 and 2011-12 and holding that the rental income from the I.T. Park, namely, Olympia Tech Park is taxable under the head "Income From Business" and under the head "income from house property". 3. The following purported substantial questions of law are sought to be raised in the present appeals filed by the Revenue :- 1. Whether on the facts and in the circumstances of the case and in law the Appellate Tribuna....
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....be assessed as "income from house property" and not as «business income" and further whether non-appreciation/ ignorance of the ratio of decision of Hon'ble Apex Court, while deciding the issue, had made the order of ITAT perverse, both in law and facts ? 4. The finding of the learned Tribunal in this regard are quoted below from its order. 10. We have considered the rival submissions on either side and perused the relevant material available on record. Admittedly, the assessee disclosed dividend income of Rs. 6,77,302/- and claimed as exempted. As rightly submitted by the Ld. O.R., when the assessee earned exempted income or income which does not form part of total income and claimed expenditure, the Assessing Officer may comp....
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....nger res integra and it is squarely covered by the recent judgment of the Division Bench of this Court in the case of M/s. PSTS Heavy Lift and Shift Ltd., Wavoo Mansion, 2nd Floor 48, (Old No.39), Rajaji Salai vs. M/s. CeeDeeYes IT Parks Pvt. Ltd., decided on 30 January 2020, in Tax Case Appeal Nos.2193 to 2195 of 2008 & 979 of 2009. Paragraphs 17 to 22 of that judgment are quoted below for ready reference :- "17. We are of the clear opinion that once the property in question is used as business asset and the exclusive business of the assessee company or firm is to earn income by way of rental or lease money, then such rental income can be treated only as the "Business Income of the Assessee" and not as "Income from House Property". The ....
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....will depend upon the facts of each case and where such income is earned by the Assessee by way of utilisation of its business assets in the form of property in question or as an idle property which could yield rental income by its user, by the lessees. In the earlier provisions of Income from House Properties, even the notional income under the Head "Income from House Property"; was taxable in the case of self-occupied properties by landlords, is a pointer towards that. 19. Since, in the present cases, it is not even in dispute that all the exclusive and main source of income of the Assessee was only the rentals and lease money received from the lessees in both the cases and the Assessing Authority took a different and contrary view mainl....
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.... cannot be taxed as Income from house property. 21. Moreover, the Heads of Income, as defined in Section 14 of the Act do not exist in silos or in watertight compartments under the Scheme of tax and thus, these Heads of Income, as we have noted above, are fields and heads of sources of income depending upon the nature of business of the Assessee. Therefore, in cases where the earning of the rental income is the exclusive or predominant business of the Assessee, the income earned by way of lease money or rentals by letting out of the property cannot be taxed under the Head "Income from house property", but can only be taxed under the Head "Income from business income". 22. In view of the aforesaid, where the facts of the cases are undisp....
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....he relevant year was from any of its idle properties and the Assessee company used to enjoy such properties as a landlord from only earning the rental income. 8. On the contrary, it seems that the Assessee diversified and added its business line for the development of real estate of particular type, namely software companies and even though the name of the company continue to remain as M/s. Khivraj Motors Pvt. Ltd. The burden of the argument of the learned counsel for the Revenue, perhaps emanated from only the name of the company, forgetting that the main business activity of the company from its motor business had been diversified into developing a special kinds of property and earning lease rental income as its main business income. By ....