2011 (6) TMI 1014 - AT - Income Tax

Summary

Issues Involved:
1. Classification of income from office space given on license: 'business income' vs 'income from house property'.
2. Jurisdictional validity of notice u/s 148 for assessment years 2001-02 to 2004-05.

Summary:

1. Classification of Income:
The primary issue in these appeals was whether the income from licensing office space should be classified as 'business income' or 'income from house property'. The assessee provided various services such as lift, receptionist, secretarial services, data processing, conference room, toilets, and pantries. The Assessing Officer classified this income as 'income from house property', which was upheld by the CIT(A). However, the Tribunal found that the assessee's property was a commercial asset, providing comprehensive business facilities, and thus, the income should be classified as 'business income'. The Tribunal relied on the decision of the Hon'ble Jurisdictional High Court in CIT vs V.S.T. Motors Pvt. Ltd., which held that income derived from a commercial asset should be treated as 'business income'. Consequently, the Tribunal set aside the CIT(A)'s findings and ordered that the income be accepted under 'business income' for all the assessment years.

2. Jurisdictional Validity of Notice u/s 148:
The assessee challenged the jurisdictional validity of the notice u/s 148 for the assessment years 2001-02 to 2004-05, arguing that it was based on a mere change of opinion and lacked fresh information. The CIT(A) dismissed these objections, relying on the Supreme Court's decision in ACIT vs. Rajesh Jhaveri Stock Brokers (P) Ltd. The Tribunal, however, did not find it necessary to delve deeply into this issue as it was not pressed before them. Therefore, the jurisdictional challenge was dismissed.

Conclusion:
On merits, the appeals for assessment years 2001-02 to 2004-05 were partly allowed, and the appeals for assessment years 2005-06 and 2006-07 were fully allowed. The jurisdictional objections were dismissed. The Tribunal pronounced the order in the open court on 8.6.2011.