TaxTMI 
TaxTMI 
2016 (4) TMI 1398
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....ainst the order of the CIT(A) in holding that the rental receipts of the assessee are business receipt and not income from house property. 3. Briefly stated facts are that the assessee in its P&L Account has credited an amount of Rs. 1,05,78,000/- under the head business centre service charges. As against this, the assessee has debited various expenses including interest and finance charges amounting to Rs. 2,08,64,803/- and also claimed depreciation amounting to Rs. 8,45,860/-. The AO assessed the business centre service charges credited by the assessee in its P&L Account as income from house property and treated the same as rental income. He stated that the assessee has simply relied on some terms and conditions and also objects mentione....
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....rges as business receipts by observing in para 5 as under: "5. We have considered rival contentions and found from the record that the business asset was used by the assessee in, its business of letting out as per its primary object to exploit the property by complex commercial activity. After considering the Business' Conducting that the assessee has granted permissive use of the services and facilities provided in the premises by the assessee. The Conductor has no right of occupancy, but only limited access for the purposes of business activities during hours of day fixed in the agreement. We also found that the premises are in the control of the assessee and the assessee is required to provide services as per the agreement for whic....
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....out of its interest bearing borrowings." 7. Briefly stated facts are that the AO treated the business service centre charges as rental income and assessed the same under the head income from house property. Once it is assessed as income from house property, the AO noted that the interest paid to Central Bank of India amounting to Rs. 1,43,64,614/- on term loan of Rs. 15 cr. for a period of 12 months interest @ 12.50% was a corporate loan for the corporate needs. According to him, the utilization of this Rs. 15 cr. was for advancement of interest free loan to sister concerns viz., ESES Commercial Pvt. Ltd. and Erudite Trading Pvt. Ltd. According to AO, these two companies did not own any property at the time of taking loan and also not enga....
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....able. Hence, the ground of appeal of the appellant is allowed." Aggrieved, revenue is in second appeal before Tribunal. 8. We have heard rival submissions and gone through facts and circumstances of the case. Admittedly and finally, the business centre service charges are assessed as business receipts and we have also confirmed this aspect in the above issue. We find that the AO himself noted the fact that the loan of Rs. 15 cr. obtained from Central Bank of India was utilized for advancing further loan to assessee's sister concerns viz. ESES Commercial Pvt. Ltd. and Erudite Trading Pvt. Ltd. and factually this is a corporate loan. Ld. counsel for the assessee before us clearly stated that the assessee and its sister concerns are engaged ....