2021 (9) TMI 967

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....ee is in the business of production and distribution of Hindi Films and assessee has shown income from house property and income from business and profession. During the year, the assessee declared receipts from hiring of studio to the extent of Rs. 51,19,024/- under the head 'other income' in the books of account and brought the same to tax under the head 'income from house property'. The Assessing Officer observed that the assessee has claimed deduction u/s 24(a) of the Act @ 30% and also claimed deduction of property tax. He also observed that besides it also claims several business expenses pertaining to the said studio by enjoying dual benefit. The Assessing Officer by following the assessment orders passed for assessment year 2010- 11, 2011-12 and 2012-13 treated the income from studio under the head 'business income' as against income from house property. 3. Aggrieved with the above order, the assessee preferred an appeal before Ld. CIT(A)-4, Mumbai and filed detailed submission before him, the same was reproduced by Ld. CIT(A) at page 3 to 9 of his order. After considering the detailed submissions of the assessee and after considering First Appellate orders for assessmen....

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.... land alone. It is the finding of fact by the Ld. CIT(A)-7, Mumbai in the case of the appellant for A.Y. 2010-11 as well as for A.Y. 2012-13 that what has been let out on monthly basis is the 'Dahisar land' of the assessee and no other facility was provided. These finding of facts have been given by the Ld. CIT(A)-7, Mumbai in the case of the assessee is based on the details filed by the assessee itself. However, it looks that the Ld. CIT(A)-7, Mumbai, on misreading the provisions of Sec 22 of the Act. has allowed the ground of appeal in the favour of the assessee. In view of the facts and circumstances of the case and discussion hereinabove, when what has been let out is the 'Dahisar land' alone by the assessee, then the consequent income cannot be considered to have been covered under the provisions of Sec 22 of the Act and in this view of the matter, the principles of consistency in reference to the said decision of Ld. CIT(A)-7, Mumbai cannot be followed. Accordingly, the conclusion reached by the AO in the assessment order is upheld and the ground of appeal so raised by the appellant is dismissed." 4. Aggrieved with the above order, the assessee preferred an....

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....plea of the assessee by taking a view by relying on section 22 of the Act. The assessee also filed a written submission in respect of additional evidence and also filed additional evidence in the form of paper book before the Tribunal and the Bench remanded the matter to the Assessing Officer. After considering the additional evidences submitted by the assessee. The AO filed remand report before us. For the sake of clarity, we are reproducing the AO's report and assessee's response below: "AO's Remand Report "2. As per the indenture agreement submitted it can be seen that everywhere it is mentioned that the land is appurtenant to the structures standing their land. However, as per the documents presented and the MOU submitted the rent has been received from Bungalow and not land. 3. Therefore, as rightly pointed out by the assessing officer the real issue is whether such income is from house property or business. 4. In this regard the facts are summarized as per below: - i. It is seen from the records that in its books the assessee has accounted for the Dahisar land and the Dahisar building separately. It is also seen as per depreciat....

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....ors of cinematographic films and pictures...................... Over the years production and distribution of Hindi feature films has been the main activity. The activity of renting out has never been the object of the company, it is therefore, be incorrect to give the activity of renting the colour of business income when the main object clause forming part of the Memorandum of Association of the Company does not even permit renting activity. 2. Our client ("the Company") lets out the Dahisar land to outside T.V. / Commercial producers, income is derived from the Dahisar land which is appurtenant to the Cl shed with asbestos roof ("bungalow"). The bungalow is used by the company for its own business purposes as a storage premise. The bungalow is not let out. Only the open land appurtenant to the bungalow is let out The bungalow is used by the Company for its own business purposes for storage of old dresses and costumes, old camera lights, old cameras, nagra lights etc. The Cl shed with asbestos roof (loosely described as "bungalow") occupies only 13% of the entire plot area. 3. What is provided to the T.V. serial producers is only the vacant open land by the Comp....

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....sions made by the assessee before Assessing Officer in respect of additional evidence and further relied on the following case law in Raj Dadarkar & Associates v. ACIT (2017) 394 ITR 592 (SC) and PCIT v. City Centre Mall Nashik Pvt. Ltd. (2020) 424 ITR 85 (Bom). 6. On the other hand, the Ld. DR relied on the order of authorities below and he also relied on the remand report submitted by the Assessing Officer. 7. Considered the rival submissions and material on record. We notice that assessee is in the business of production and distribution of films. Due to slack in the film production and assessee is not at present producing any films and it is owning production facilities which includes and consists of Bungalow and vacant land adjacent to Bungalow at Dahisar. It is submitted that the Bungalow is used by the assessee for its own business as storage premises. The vacant land appurtenant to bungalow is let out. The bungalow is CI shed with asbestos roof occupies only 13% of the entire area. The vacant open land is let out to the serial producers in its capacity as a landlord and the required instrument for production of serial/movies are brought by tenants. The duration of the....