2012 (4) TMI 654 - AT - Income Tax

Summary

Issues involved: Determination of whether the income should be treated as "Business Income" or "Income from House Property" for assessment year 2005-2006.

ITA No.976/Ahd/2009 (Revenue's appeal):
The Revenue appealed against the deletion of an addition of Rs. 8,29,326 made by the AO on account of "Business Income" treated as "Income from House Property." The Revenue argued that the income should be assessed as "Business Income" based on the nature of the activities carried out by the assessee. The assessee, engaged in developing infrastructure for industries and providing services to parties, contended that the income should be assessed as "Income from Business" as per relevant legal precedents. The Tribunal examined the joint business agreement between the assessee and a party, which outlined the provision of infrastructure facilities by the assessee. It was observed that the assessee had organized and continuous business operations, indicating a commercial intent in exploiting its infrastructure facilities. The Tribunal upheld the CIT(A)'s decision to treat the income as business income, dismissing the Revenue's grounds.

CO. No.92/Ahd/2009 (Assessee's CO):
The assessee's Cross Objection (CO) challenged the Revenue's appeal on similar grounds related to the treatment of income as "Business Income" instead of "Income from House Property." The CO was dismissed by the Tribunal as the ground raised was considered merely supportive in nature. Consequently, both the Revenue's appeal and the assessee's CO were dismissed, affirming the treatment of income as business income.

In conclusion, the Tribunal upheld the CIT(A)'s decision to treat the income as "Business Income" rather than "Income from House Property" for the assessment year 2005-2006, based on the commercial intent and organized business operations of the assessee.