2011 (9) TMI 1212 - AT - Income Tax

Summary

Issues involved: Appeal against order regarding treatment of rental income as business income and accumulation of surplus amount.

In the present case, the Revenue appealed against the order of the ld. CIT(A) regarding the treatment of rental income as business income and the accumulation of surplus amount by the assessee-trust. The Department challenged the deletion of addition of Rs. 24,69,447 representing the rental income received by the society as business income, and also contested the action of the ld. CIT(A) in allowing the accumulation of surplus amount by revising Form 10 during the assessment proceedings.

Treatment of Rental Income:
The ld. Counsel for the assessee contended that the issue of treating rental income as business income is settled against the Department by the decision of the Hon'ble Madras High Court in the case of CIT vs. Chennai Properties and Investments Ltd. The Tribunal found that since the issue is covered in favor of the assessee by the decision of the Hon'ble Jurisdictional High Court, there was no ground to interfere in the order of the ld. CIT(A) on this matter, and thus dismissed the Department's appeal on this issue.

Accumulation of Surplus Amount:
Regarding the accumulation of surplus amount, the ld. CIT(A) allowed the relief to the assessee based on the modified Form 10 filed during the assessment proceedings. The Tribunal noted that the ld. CIT(A) followed the decision of the Hon'ble Punjab & Haryana High Court in the case of CIT v. Simla Chandigarh Diocese Society, and since no contrary decision was presented, the Tribunal upheld the action of the ld. CIT(A) on this issue as well. Consequently, the appeal of the Revenue was dismissed.

In conclusion, the Tribunal upheld the decisions of the ld. CIT(A) on both issues, citing relevant legal precedents and dismissing the appeal of the Revenue.