9911796707
TMI Blog2012 (4) TMI 467X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the residual amount of lease rent received by the assessee from various commercial organizations after incurring expenditure for the common area and other security and services extended being incurred for running the market complex. The claim of interest paid to the bank on the term loan utilised for the purpose of construction of the building was on other partners which was negated by the Assessing Officer by following the decision of Hon'ble Apex Court in the case of National Storage Pvt. Ltd. v. CIT (66 ITR 596) and Sambhu Investment Pvt. v. CIT (263 ITR 143). The receipts by way of lease rent were brought to tax by giving statutory deduction u/s.24 of the Act. 3. The learned Counsel for the assessee initiating his arguments submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffered their individual share, constructed market complex and earned income. So the income earned by the assessee firm was by carrying on adventure in the nature of trade and should have been assessed as income from Business. The commercial complex is exclusively part of its commercial activity therefore the income earned should have been assessed as income from Business. The assessee received income was not a bae letting of the tenement as it is also providing other incidental services like electrician, plumber, sweeper, watch and ward, and a clerk for collection and deposit of electricity Bills water Bills etc. and received reimbursement for such expenses separately. Therefore income received is by exploiting the immovable property of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t complex as a business activity insofar as the lessees had no hold of the common area or the security and sanitation services rendered by the assessee. They enjoyed the premises occupation on the assessees control of the complex. There was no agreement by the assessee firm to get the reimbursement of the same from these lessees in order to establish that the income there from has to be taxed as income from house property. He pointed out that the case laws relied upon by the Assessing Officer and the learned CIT(A) in respect of Sambhu Investment Pvt. v. CIT (263 ITR 143) rather lean in favour of the assessee when it has been found that the main intention was to exploit the immovable property commercially and in that event it is to be held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s had obtained or repaid was not the issue for consideration either before the AO leading to a finding that a super structure constructed was for the purpose of letting out to be rendered as income from house property. He also pointed out that the Department's appeal was dismissed by the Hon'ble Apex Court in the case of National Storage P. Ltd (supra) when the AO misdirected himself to hold that the said decision stood covered in favour of the Department on the basis of facts and circumstances which have been considered by him in his order. He submitted the copies of the sanctions obtained from the bank, municipal authorities and also the various receipts for charging the tenants for common area is more than the reimbursement allowed the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of a house property and not for carrying on business activities insofar as the Assessing Officer in his remand report has submitted that the capital contribution has not been defined in the partnership deed indicating as to why the capital was pooled as their resources for constructing a commercial complex to be exploited not by carrying any business activities but by letting out to different commercial organizations. The various expenditures incurred by the assessee for security, sanitation and other services are claimed by the assessee on estimate for which no documentary evidence was furnished. The sanction from the bank or municipal authorities does not indicate any intention of the assessee to carry on exploitation of a commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not have utilised the property for its own commercial venture when the manufacturing unit had been shifted to Mancheswar Industrial Estate area. I am of the considered view that this observation of the learned CIT(A) rather leans in favour of the assessee's claim that the bank took cognizance of the commercial viability of this project to grant loan which partners pooled their resources to repay the loan and let out the property to the commercial organizations for earning income against which incidental expenses incurred for carrying out such activities were denied. The depreciation and interest therefore becomes an integral part for earning the income cannot be lost sight off when there is specific provision for claiming the same from ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
