TaxTMI 
TaxTMI 
2023 (7) TMI 237
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....dia) Pvt. Ltd. The said document has been signed for the period of three years from the period 01/10/2016 to 30/09/2019. The rent for initial one year previous is Rs. 2,70,000/-. For the subsequent, the rent has been fixed at Rs. 2,83,500/- and which would Increase to Rs. 2,97,675/- in the third year of lease. The lease document also talks about deduction of tax at source, submission of Form-16A to the lessor by the lessee etc. It has been specified in the said lease document that the property would be used only for educational purposes and that the lessor would also receive Rs. 20,000/- per month on account of maintenance. The lease has been registered in the office of Sub-Registrar, Jaipur-V. Perusal of the lease document also shows that the said property has been leased to Vibrant Academy (India) Pvt. Ltd. on similar terms and conditions as per any other property the income from which income is chargeable to tax as rental income. Thus the income from property under reference is in the nature of rental income and not business income. 11. The assessee has not submitted release agreement signed with Patanjali IAS Classes Pvt. Ltd. 12 Thus the assessee has shown income from the ....
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....see filed the following submissions. 1.1. The assessee firm was engaged in the business of letting out of properties. The firm also rendered various services like provision of security services, lift maintenance, upkeep of properties and cleaning services, etc. 1.2. Since income eamed was from letting out of properties along with various services to lessees, the income was offered for tax, under the head, Income from business and profession. 1.3. It is submitted that the partnership as defined in Indian Partnership Act, 1932 is a contract between two parties who have joined hands to carry on some business. Thus, the very basis for partnership was to carry on business. The partnership deed also categorically provided for carrying on the business of leasing, managing, and maintaining the property. 1.4. During the course of assessment proceedings, a detailed questionnaire was issued by Id. AO vide notice u/s 142(1) dated 20.11.2020 [PB 5-6] seeking pinpointed queries about the nature of business activities as well as verification of such receipts. The same was done, obviously, to verify the issue for which the case was selected for scrutiny. 1.5. The detailed reply to the sa....
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....rpret the activities [Para 8 of the order] 1.11. Finally, in Para-11 of the order, Hon'ble SC taking into consideration the fact that as per object clause of memorandum of association of the company, its object was letting out of properties held that "letting of the properties is in fact is the business of the assessee" 1.12. Ld. PCIT has neither distinguished the case of Hon'ble SC nor has followed the same. The order of Ld. PCIT is contrary to the law laid down by Hon'ble SC and, therefore, deserves to be quashed. 1.13. Regarding wrongful assumption of jurisdiction by Id. PCIT, in the present case,following judicial precedents are relied upon: Contention Case Laws Assessment was completed by AO on the basis of exhaustive enquiries and detailed submissions filed by the assessee firm and even otherwise Explanation 2 to Section 263, inserted vide Finance Act, 2015, cannot override the basic requirements of sub-section (1) of Section 263 1. Torrent Pharmaceuticals Ltd. [2018) 173 ITD 130 (Ahd.- Trib) 2. Eveready Industries India Ltd.[2020] 181 ITD 528 (Kolkata Trib) 3. M/s. Smira Pune Food Pvt. Ltd(ITA No.3205/DEL/2017, ITAT Delhi Bench. 4. Shri Narayan Tatu ....
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....by a single officer. 1.16. Where the assessee firm has fumished the requisite information and the NFAC has completed the assessment after considering all the facts, the order cannot be termed as erroneous. Reliance is placed on the following judicial pronouncements: 1. CIT v Ratlam Coal Ash Co (1988) 171 ITR 141 (MP) 2. Ashok Kumar Parasramka v ACIT (1998) 65 ITD 1 (Cal) 3. CIT v Mehrortra Brothers (2004) 270 ITR 157 (MP) 4. CIT v Parameshwar Bohra (2004) 267 ITR 698 (Raj) . 5. Paul Mathews & Sons v CIT (2003) 263 ITR 101 (Ker) 6. CIT v Arvind Jewellers (2003) 259 ITR 502 (Guj) 7. CIT v Hastings Properties (2002) 253 ITR 124 (Cal) 8. CIT v Goal (JP) (HUF) (2001) 247 ITR 555 (Cal) 1.17 From the facts on record (PB 22-27), it is crystal that the order was passed by AO after full enquiries and therefore, the case is not falling within clause (a) and (b) of Explanation 2 to Section 263. In view of the above factual and legal position, ld. PCIT has grossly erred in assuming jurisdiction u/s 263. Thus, the entire order by ld.PCIT deserves to be quashed.'' 2.3 On the other hand, the ld. DR supported the order of the ld. PCIT and also filed the submission alongwith c....
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....w of the judgment of the Hon'ble Apex Court in the case of Chennai Properties (Supra). It is also to be noted that judgment of Hon'ble Madras High Court was delivered on 11/11/2014 whereas the decision of the Hon'ble Supreme Court in Chennai Properties was delivered on 09/04/2015. The fact of rejection of assessee's SLP by the Hon'ble Supreme Court against the order of Keyaram Hotels (Supra)does not merge the decision of the Madras High Court into that of Supreme Court. The Hon'ble Supreme Court dismissed the SLP in the following words: "The Special Leave Petitions are dismissed" It is pertinent to mention that mere dismissal of SLP without commenting on the correctness or otherwise of the order from which leave to appeal is sought what the court means is that it does not consider it to be a fit case for exercise of its jurisdiction under Article 136 of the Constitution. Therefore, to argue that the order of the Hon'ble Madras High Court has been upheld by the Hon'ble Supreme Court is wrong. Reliance is placed on the following judicial pronouncements: 1. V.M. Salgaocar & Bros. (P) Ltd. and ors. v. CIT [2000] 160 CTR (SC) 225. "10. Different considerations apply when a specia....
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.... the Constitution, by such dismissal this Court does not lay down any law, as envisaged by Article 141 of the Constitution, as contended by the learned Attorney General. In Indian Oil Corporation Ltd. v. State of Bihar it has been held by this Court that the dismissal of a Special Leave Petition in limine by a non-speaking order does not justify any inference that, by necessary implication, the contentions raised in the Special Leave Petition on the merits of the case have been rejected by the Supreme Court. It has been further held that the effect of a non-speaking order of dismissal of a Special Leave Petition without anything more indicating the grounds or reasons of its dismissal must, by necessary implication, be taken to be that the Supreme Court had decided only that it was not a fit case where Special Leave Petition should be granted. In Union of India v. All India Services Pensioners Association. this Court has given reasons, for dismissing the Special Leave Petition. When such reasons are given, the decision becomes one which attracts Article 141 of the Constitution which provides that the law declared by the Supreme Court shall be binding on all the courts within the ter....
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....''Income from Business and not under the head ''Income from House Property''. During the course of assessment proceedings, it was pointed out by the AO that TDS u/s 194C was deducted towards rendering, managing and maintaining services by the assessee firm. Consequently, the AO accepted the explanation of the assessee firm and assessed the income under the head ''Income from Business and Profession''. However, ld. PCIT while invoking the provisions of Section 263 of the Act erred in placing a restrictive interpretation to CBDT Circular No. 16/2017 dated 25-04-2017 wherein the ld. PCIT has missed the principal enumerated in the said circular. The said circular emphasizes that lease rent received by the assessee from letting out the building alongwith other amenities in a Software Technology Park would be chargeable to tax under the head ''Income from House Property''. Therefore, in this way, every case of ''letting out buildings alongwith other amenities'' would automatically fall in the income from business and it will not be merely restricted to Software Technology Park only as has been wrongly understood by ld. PCIT. It is important to mention here that the AO after detailed enqu....
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....ularly when the detailed questionnaire was issued by the AO during the assessment proceedings and in this regard the assessee had also furnished all the details alongwith decision of Chennai Properties & Investments Ltd. vs CIT (supra). Therefore, it cannot be presumed that there was lack of enquiry on the part of the AO. In this regard, we draw strength from the decision of Coordinate Bench in the case of Smt. Lata Phulwani (ITA No. 246/JP/2020). It is a settled law by now that where the AO has exercised the quasi judicial power vested in him in accordance with law and arrived at a conclusion and such a conclusion cannot be considered erroneous simply because the ld. PCIT does not feel satisfied with the conclusion. In this regard, we take into consideration the decision of Hon'ble Rajasthan High Court in the case of CIT vs Ganpat Ram Vishnoi, 296 ITR 292. Even otherwise, provisions of Section nowhere allow to challenge the judicial wisdom of the AO or to replace the wisdom in the guise of revision unless the view taken by the AO is not at all sustainable in law. We are of the view that extent of enquiry cannot be stretched to any level by forcing the AO to go through the assessme....