TaxTMI 
TaxTMI 
2011 (6) TMI 1014
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....he assesseecompany has claimed income from licencing of its business centre as 'business income' as against which the Assessing Officer has held it to be 'income from house property'. Undisputedly, the assessee has provided services like provision of lift, receptionist besides other secretarial services, data processing, conference room, etc and has also provided toilets and pantries etl. The ld. CIT(A) has confirmed the order of the Assessing Officer. Now the assessee is further aggrieved. For ready reference, we are extracting the grounds taken in assessment year 2001-02 which would give a clear picture of facts and issues involved in other years: "1. The common order of the learned CIT (Appeals)-III dated 22.12.2009 in IT A No.322, 323,324/07-08 & 941/06-07 for the Assessment Years from 2001-02 to 2004-05 and the assessment order of the Assessing Officer dated 30.11.2006 are arbitrary, incorrect and baseless both on law as well as on facts. 2. Relevant dates in the case 2002-03, 2003-04 and 2004-05 2001-02 2002-03 2003-04 2004-05 i. Return filed on 14.9.01 27.6.02 14.7.03 25.6.04 ii. Notice u/s 148 28.3....
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....er under section 147 of the Income-Tax Act. Time limits are set out in law for strict observance both by the assessee or the Revenue. A notice for scrutiny of accounts under section 143(2) has to be issued within 12 months from the end of the month in which return is filed, if it is not so issued, the Assessing Officer can, no doubt, exercise his power under Section 147, but it cannot be done merely for scrutinizing the return or verification of the same. Where the Assessing Officer has issued notice under Section 147 accompanied by a letter indicating that he wanted to verify the claim of carriage expenses and the income in respect of each truck, besides check the overdraft account apart fro III such other details, there was absolutely no inference of any escapement of income, so as to justify notice under Section 147. The notice has to be issued only under Section 143(2) in such cases. Section 147 is not an extension of the right under section 143 (2), as otherwise there would have been no purpose in laying down the time limit of one year. The High Court in an elaborate judgement has inter alia, relied upon Board's Circular No.549, dated 31st October, 1989 ([1990] 182 ITR (St....
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.... claimed as business income and the expenses including depreciation has been claimed and allowed. In order to assess this receipt under the head "House Property", basing on the decision in the case of M/s. Shambu Investments (P) Ltd 129 taxman 70 (SC), the assessments have been reopened and Notices u/s.148 issued". The Apex Court decision cited above was rendered on 21.01.2003. The department had ample opportunity to issue notice u/s. 143 based on this decision for all these years. But the department did not utilize the opportunity. The information about Supreme Court judgement was very much available during the period available for issue of Notice u/s. 143 (2). Hence, there is no new information at the time of issue of Notice u/s. 148. Therefore, it is a case of invalid Notice u/s 148 as there is no new information. Just, because, the case has not been chosen for scrutiny, it is not open to revenue to assume jurisdiction, as such assumption would tantamount to change of opinion. Consequently, Notice u/s 148 dated 19.03.07 for Asst. Year 2001-02, 2002-03 to 2004-05, assuming jurisdiction, based on Apex Court decision rendered on 21st January, 2003, when notice for issue of....
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....ity to the appellant's case The Apex court decision in the case of M/s. Shambu Investments (P) Ltd vs. ClT reported in 263 ITR 143, affirming the decision of the Calcutta High Court in CIT vs. Shambu Investments (P) Ltd (2001) 249 ITR 47 is not applicable to the facts of this case, as it was held as follows :- "The assessee owned an immovable property costing Rs. 5,42,443/-. It occupied a portion of the property and let out the rest to be used as table space to occupants, with furniture and fixtures and lights and air-conditioners. The assessee provided services like watch and ward staff, electricity and water and other common amenities. The monthly rent payable was inclusive of all charges. The assessee had also recovered by way of security from the occupants a sum of Rs. 4,25,000/-. The High Court held that the income from the property was assessable in the hands of assessee as income from House property (see [2001] 249 ITR 47 (Cal)). The assessee preferred appeals to the Supreme Court. The Supreme Court dismissed the appeals holding that there was no reason to interfere with the conclusion arrived....
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....id not cite any such heavy advance in the case of the assessee. Because, the Business Centre Charges advance is generally 6 to 10 months. Business Centre Charges, which nowhere near the cost of office space and other fixed assets which works out to and 50 Lakhs. Hence, this apex court decision cannot be applied to the facts of the assessee, on this ground and hence, the entire foundation of the assessment order relying upon this case is without appreciation of this crucial and distinguishable piece of evidence and hence, all additions for all the Asst. Years i.e. 2001-02 to 2004-05 relying upon this case, which is not applicable to the assessee, are therefore, perse illegal, arbitrary, baseless, mechanical and without any logic. The learned CIT (Appeals) did not get over the contention of the appellant that Income from Lease / Licensing of business centre can only be Business Income vide Asst. CIT vs. Saptarishi Services Ltd (2004)265 ITR 379 (Guj)special leave against this decision has also been refused by the Supreme Court (2003) 264 ITR ST 36. In the case of Everest Hotels Ltd V CIT (1978) 114 ITR 779 (Cal) applied in CIT v Roy Chowdhury (K.G.) (1992) 195 ITR 801 (Cal),....
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....re us, the intention being that office space together with interiors, cabins, chairs & tables etc. should be enjoyed together and hence practically one letting, and without office space fully furnished would not have been accepted by other, the income from Hiring/Licensing such office space with Interiors, Business cabins, Furniture & Fittings can be assessed as Business income and if not, only as Income from Other Sources and not as Income from House Property. 8. The learned CIT (Appeals) did not get over the contention of the appellant that even if one assumes that Business Centre charges is not a business income, Section 56 (2)(iii) of Income Tax Act, 1961 ought to have followed by the Assessing Officer. This was not done vide Orient Hospital Ltd. vs. DCIT 315 ITR 422 (Mad). 9. The learned CIT (Appeals) ought to have considered that Cases relied upon by the department are distinguished in grounds of appeal filed by the appellant. 10. The CIT (Appeals) - III ought to have considered the contention of the appellant that treating Business Centre Charges as income from House property is not beneficial to revenue, in the long run as Depreciation is only on ....
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....rounds, facts and circumstances of the case, the assessee prays for deletion of all additions for Asst. Year 2001-02 to 2004-05 by treating Business Centre Charges as income from House Property based on inapplicable Apex Court Decision in the case of Shambu Investments (P) Ltd 129 taxman 70 (SC) and render justice. " 3. We have heard the rival submissions in the light of the provisions of the Act. After hearing both sides, we have found it for a fact that the assessee has provided conference room, security services, full fledged business centre with separate cabins, reception, fully air conditioned and local area networking, visitors chairs, etc. apart from toilets and pantry. To support this claim, the ld.AR has relied on a decision of Hon'ble Jurisdictional High Court rendered in the case of CIT vs V.S.T Motors (P) Ltd, 226 ITR 155. On the other hand, the Department has relied on a different decision of the Hon'ble Jurisdictional High Court which was rendered in the case of A.R Complex vs ITO, 167 Taxman 46, in which letting out of commercial complex was held to be 'income from house property'. After hearing both sides, we have found for a fact that the assessee has gi....