2019 (2) TMI 646 - AT - Income Tax

Lease rental income earned from commercial properties - Income From House Property OR business income - AR submitted that the issue contested by the assessee in the present appeal has been decided against the assessee by the Hon ble Supreme Court in earlier Assessment Years in light of the decision of M/s Ansal Housing Finance & Lease Company Ltd in assessee s own case 2012 (11) TMI 323 - DELHI HIGH COURT - Held that - We have heard both the parties and perused the material available on record. The assessee through its AR has rightly submitted that the issue contented in the present appeal is decided against the assessee by the Hon ble Jurisdictional High Court. Therefore, this appeal is dismissed but in light of the SLP pending before the Hon ble Supreme Court. The assessee is at liberty to take appropriate action if the Hon ble Apex Court decided the issue in favour of the assessee. In result, the appeal of the assessee is dismissed.

Issues:
1. Natural justice violation in CIT(A) order
2. Treatment of lease rental income as Income From House Property
3. Taxing rental income from commercial mall as income from house property
4. Categorization of interest income on FDRs

Issue 1: Natural justice violation in CIT(A) order
The appellant contended that the CIT(A) erred in law by passing the order under section 250 of the Income Tax Act, 1961, in violation of the principles of natural justice. However, the Ld. AR submitted that the issue had been decided against the assessee by the Hon'ble Supreme Court in earlier assessment years. The Ld. AR further mentioned that the assessee had filed a Special Leave Petition (SLP) before the Hon'ble Supreme Court, which was pending. The Ld. AR submitted Form No. 8 declaring that the question of law was pending before the Supreme Court, and if the issue was decided in favor of the assessee, appropriate action would be taken.

Issue 2: Treatment of lease rental income as Income From House Property
The CIT(A) held that the Assessing Officer (AO) was correct in treating the lease rental income from commercial properties as Income From House Property instead of business income. The appellant contested this decision, arguing that the income should be classified as business income rather than income from house property. The issue was linked to a previous order of the Hon'ble Delhi High Court, which the appellant claimed had not attained finality as an appeal had been filed before the Hon'ble Supreme Court.

Issue 3: Taxing rental income from commercial mall as income from house property
The CIT(A) confirmed the AO's conclusion regarding the taxing of rental income from a commercial mall as income from house property instead of business income based on a previous order of the Hon'ble Delhi High Court. The appellant disputed this decision, stating that the High Court order had not reached finality as an appeal was pending before the Supreme Court.

Issue 4: Categorization of interest income on FDRs
The CIT(A) upheld the AO's decision to treat interest income on Fixed Deposit Receipts (FDRs) as 'Income from Other Sources'. The appellant argued that the interest income should be considered as Business Income rather than categorized under 'Income from Other Sources'. The appellant sought a different categorization of the interest income.

In conclusion, the appeal was dismissed by the ITAT Delhi, as the issue had been decided against the assessee by the Hon'ble Jurisdictional High Court. However, the appellant was granted liberty to take appropriate action if the Hon'ble Supreme Court ruled in favor of the assessee.

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