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TMI Blog2007 (6) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Supreme Court in the case of Universal Plast Ltd [ 1999 (3) TMI 15 - SUPREME COURT] . it is to be held that such income was assessable as income from business. Thus, the Tribunal upheld the CIT(A) s decision to treat the hire charges as Profit and gains of business or profession , emphasizing the temporary nature of the lease and the assessee s intention to continue its business. The Tribunal also stressed the importance of consistency in tax assessments and found that the judicial precedents cited by the assessee were applicable to the facts of the case. X X X X Extracts X X X X X X X X Extracts X X X X ..... business income'. During the previous year relevant to assessment year 2000-01 and in earlier two years, the assessee could not take up the business on its own due to difficult market conditions and poor health of the Director who was looking after this business. Therefore, to continue the business of exhibition of films it was let out to M/s. B.N. Gupta & Co. for some part of the year and to M/s. National Timber Traders with effect from 20-1-2000 to 21-3-2000. It was submitted that the assessee again started running the business of its own with effect from 1-4-2000 and continued till 20-1-2002. The letting out of the cinema hall for the limited purpose of exhibition of films during the previous year subject to bearing of running and maintenance expenses of the theatre by the assessee-company was, hence, only temporary and had been resorted to under extreme compulsion and limitations Thus, it was pleaded that the receipts of the assessee should have been assessed under the head 'Profit and gains of business or profession'. It was also submitted that Assessing Officer had obtained all relevant information from the assessee to take a totally different stand and treated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepted it in the case of one assessee, then it is not open to the revenue to challenge its correctness in the case of other assessee, without just cause. 4. Union of India v. Kaumudini Narayan Dalal [2001] 249 ITR 219 (SC) to contend that High Court having rendered its decision following an earlier decision of the same Court which was not challenged by the revenue in appeal, it was not open to revenue to challenge before Supreme Court the correctness of later decision of the High Court. 5. Radhasoami Satsang v. CIT [1992] 193 ITR 321 (SC) to contend that in absence of any material change, a different view than that taken in earlier years, could not be taken. 5. Coming to the merits of the case he pleaded that the facts of the present case falls within four corners of the decision of jurisdictional High Court in the case of CIT v. Northern India Theatres (P.) Ltd. [1981] 128 ITR 497 (Delhi) to contend that where under the terms of lease, the licence for running the cinema is in the name of the assessee and it was the assessee who has got the permission to run the cinema, it was for the assessee to decide how to run the cinema, whether by itself or through the agency of another ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y exploiting the property as owner by leasing out the same and realising income by way of rent, and therefore, the rental income was assessable under the head "Income from house property" and not as "business income". 11. Shambhu Investment (P.) Ltd. v. CIT [2003] 263 ITR 143 (SC) to contend that where assessee has let out portion of the premises with furniture and fixtures and provided services to the occupants, monthly rent inclusive of charges will be assessable as income from property. 12. Replying to the rejoinder the ld. Counsel pleaded that the case law relied upon by the ld. DR is distinguishable on facts and he reiterated the submissions made earlier. 13. We have carefully considered the rival submissions in the light of material placed before us. There is no material on record to controvert the fact that for shorter period the assessee had leased out its theatre to two parties mentioned above and the reasons were stated to be the difficult marker conditions and the poor health of Director who was looking after such business of the assessee, [reference can be made to para 2.2 page 13 of the order of CIT( A)]. The period for which such lease was given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er nomenclature, lease amount, rents, licence fee) received by an assessee from leasing or letting out of assets would fall under the head 'Profits and gains of business or profession'. (2) It is a mixed question of law and fact and has to be determined from the point of view of a businessman in that business on the facts and in the circumstances of each case including true interpretation of the agreement under which the assets are let out. (3) Where all the assets of the business are let out, the period for which the assets are let out is a relevant factor to find out whether the intention of the assessee is to go out of business altogether or to come back and restart the same; (4) If only or a few of the business assets are let out temporarily while the assessee is carrying out his other business activities then it is a case of exploiting the business assets otherwise than employing them for his own use for making profit for that business; but if the business never started or has started but ceased with no intention to be resumed, the assets also will cease to be business assets and the transaction will only be exploitation of property by an owner thereof, but not e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Supreme Court, we are of the opinion that it is not a case where it can be held that letting out of the theatre by the assessee was not commercial utilization of the assets particularly when the assessee could not itself run it by compulsion of certain circumstances. 18. The case law relied upon by the ld. DR cannot be held applicable to the facts of the present case as in none of those cases the assessee had let out the commercial assets for a short period. The property was constructed and utilized for the purpose of earning rent. Thus, the case law relied upon by the ld. DR is distinguishable on facts. 19. Thus, keeping in view the case law relied upon by both the parties and the facts of the present case, we are of the opinion that ld. CIT(A) has rightly decided the issue which is in accordance with law. We decline to interfere. This ground of revenue is dismissed. 20. Ground No. 2 reads as under: On the facts and the circumstances of the case the ld. CIT(A) has erred in deleting the addition of Rs. 21,12,523/- made by the AO on account of unexplained and unconfirmed sundry creditors. 21. The AO disallowed a sum of Rs. 21,12,523/- in absence of details and on account o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eleted. The revenue is aggrieved with the aforementioned findings of CIT (A), hence in appeal. 23. Referring to the asstt. order it was pleaded by the ld. DR that the assessee did not furnish any detail and according to the audited report the balances outstanding under the head 'sundry creditors' were unconfirmed. It is in these circumstances the AO added the same to the income of the assessee. Ld. CIT(A) has wrongly deleted the addition in absence of details and confirmation of sundry credits. Thus she pleaded that addition has wrongly been deleted by CIT (A) and his order should be set aside and that of AO be confirmed. 24. On the other hand, it was pleaded by the learned Counsel that on 28.3.2003 the assessee was required to submit details and confirmation etc. with regard to sundry creditors and assessment was completed on 31.3.2003. Thus he pleaded that at first instance no proper opportunity was given by the AO to submit the required details as well as confirmation etc. with regard to sundry creditors. He contended that there is no dispute to the fact that all these credits were old. Thus he contended that unless they are written off no addition could have been mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered the contention of the AO on the basis of which the addition has been made i.e. the balances are unconfirmed and no details were furnished. Thus the ld. CIT(A) has deviated from the stand of the AO and has deleted the addition on wrong footings. In the absence of details and confirmations the claim of assessee, as pointed out earlier, cannot be accepted. The case law relied upon by the assessee also does not support the case of the assessee as that was not a case where details were not furnished and balances were also not unconfirmed. Therefore, the case laws relied upon on merits of addition are distinguishable on facts. So as it relates to contention of the assessee that there was a lack of opportunity, accepting that argument, we are of the view that the matter requires reconsideration at the level of AO to give a chance to the assessee to avail opportunity to contest the addition. In this view of the situation, we restore this issue to the file of AO with a direction to give reasonable opportunity of hearing to the assessee and then pass an order on this issue in accordance with law. We direct accordingly. 27. This ground is allowed for statistical purposes. In the resul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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