TaxTMI 
TaxTMI 
2023 (2) TMI 204
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....l business and the assessee has received rent in the form of revenue sharing. 3. On the facts and circumstance of the case the Ld.ClT(A) erred in not appreciating that the deduction u/s 801D is available to the assessee who is engaged in the business of hotel and the assessee is clearly not engaged in the business of the Hotel and even the main object clause of MOA is to "to carry on the business as developers, promoters for commercial and industrial buildings." 4. On the facts and circumstance of the case the Ld.ClT(A) erred in relying on Chennai Properties and Investments Ltd. V. C1T [2015] 373 ITR 673 as facts are completely different and without appreciating the judgement given by the Hon'ble Apex Court in case of Raj Dadarkar & Associates v. Assistant Commissioner of Income Tax, CC-46 [2017] 394 ITR 592 (SC). 5. On the facts and circumstance of the case the Ld. CIT(A) erred in relying on the principal of consistency as the Hon'ble Delhi High Court in case of Krishak Bharati Cooperative Ltd. [2012] 23 taxman.com 265 (Delhi) has held that there cannot be a wild application of the principal of consistency after interpreting the judgement given by the Ho....
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....der. On considering the submissions/explanation given by the assessee, the Ld. CIT(A) recorded his findings in paras 6 & 7 of his order which are extracted below: "__________6. Ground No. 2, 3, 4 and 5 are directed against assessment of rental declared under 'business income as 'Income from Other Sources' and disallowance of claim of deduction u/s 80ID. Brief facts as noted from the impugned order are that the assessee company during the course of assessment proceedings furnished a copy of the revenue sharing agreement to the Ld. AO. On perusal of the Revenue sharing agreement, the AO observed that the assessee company is owner of only 1/8" share of the property on which the hotel was situated and the balance 7/8" share is taken by the assessee company on lease from other co-owners. He further opined that the assessee company has sub-let the hotel to M/s Highest Cruises & Entertainment Pvt. Ltd. and the Revenue Sharing Agreement was just a device to declare the sublet income assessable as "Income from Other Sources" as "Income from Business and Profession" so as to enable itself to claim deduction u/s 80ID(2) of the Act. Thus, the deduction claimed by the assessee....
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....nclusions and exclusions of some of the revenues, as contractually agreed between the parties for sharing of the income from the hotel, which cannot be interpreted to mean that it is letting of property when it is based on total revenue from the hotel and services. After considering the main object clause of MOA which includes earning of income from developing / letting of properties, and the judicial pronouncements in the case of Chennai Properties and Investments Ltd. Vs. CIT Central 3 Tamil Nadu (2015) 56 taxmann.com 456 (SC), I hold that the receipts of the assessee are to be assessed as revenue from business activities. 6.4 The AO has further disallowed the deduction claimed by the appellant company under Section 80ID(2) on the pretext that the revenue from business is assessable as Income from Other Sources. The AO has not found any deficiency in the fulfilment of conditions for claiming deduction u/s 80ID(2). 6.5 The appellant company submitted that it has complied with all the pre-conditions for claiming deduction u/s 80ID(2) and duly furnished the copy of Form 10CCBBA, being a report u/s 80ID duly certified by Chartered Accountant as Page 29-32 of Paper b....
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.... of the same is allowable and thus, this ground of appeal is allowed." 6. Dissatisfied by the aforesaid finding of the Ld. CIT(A), Revenue is in appeal before the Tribunal and all the six grounds of appeal relate thereto. 7. The Ld. DR placed reliance on para 4 of the Ld. AO's order which he supported. On the other hand, the Ld. AR drew our attention to the observation of the Ld. CIT(A) made in para 6.6 of his order wherein the Ld. CIT(A) observed that the Revenue has accepted and treated the share of profit received by the assessee from the hotel as business income in AYs 2012-13 and 2013-14 and that there is no change in any fact during the year. The Ld. AR referred to the assessment order dated 25.02.2015 passed by the Ld. AO under section 143(3) of the Act for AY 2012-13, a copy of which is placed at page 115-116 of the Paper Book. The Ld. AR also pointed out that it would be obvious from the chart placed at page 24 of Paper Book- II that the Ld. CIT(A) has allowed the claim of the assessee in the immediately preceding AY 2014-15 as well. 8. We have carefully considered the rival submission of the parties and perused the record. The only major objection of the Ld. AO f....