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TMI Blog2012 (7) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... dividual income has been already taxed in their hands as stated by the appellant, there can be no double taxation of the same amount - the assessee trust merely sub-let out the leased property and the income is held to be liable to tax as income from other sources and not income from house property or income from business - provisions of sec. 161(1A) are not applicable in the case of the assessee. - in favour of assessee. - ITA No. 2165/Mum/2011 - - - Dated:- 25-5-2012 - SHRI R S SYAL, SHRI VIJAY PAL RAO, JJ. Assessee by Sh A L Sharma Revenue by Sh C G K Nair ORDER PER VIJAY PAL RAO, JM This appeal by the revenue is directed against the order dated 24.12.2010 of the CIT(A) for the AY 2006-07. 2 The only g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of MeDowell Co vs CTO reported in 154 ITR 148, the Assessing Officer treated the trust as covered u/s 161(1A) of the I T Act and accordingly assessed the amount of Rs. 13,76,742/- as business income in the hand of the assessee trust. 3.2 On appeal, the CIT(A) held that the trust cannot be held as an association of a person as the constituent persons have not come together to earn income in question. The CIT(A) has further observed that since the beneficiaries are merely recipients of income; therefore, they have to be taxed as representative of the assessee u/s 161(1) of the Act. When the income as already been taxed in the hands of the beneficiaries, then there cannot be any double taxation of the same amount. Accordingly, by follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ees of the assessee trust are allowed to act as builders, contractors, realtors and deal in purchase and sale of ownership flats, lands and other immovable properties as per clause 5 of the deed of trust. Therefore, it is a case of doing the business of taking the property on lease and then sub letting the same on higher rent by the trust which is also the business of the trustee. 4.2 On the other hand, the ld AR of the assessee has submitted that since 1991, the income from license fee received by the assessee has been accepted by the revenue as income from other source except for the AY 2005-06 in which the Assessing Officer has treated the license fee as business income, which has been reversed by the CIT(A) by accepting the claim of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med to be made upon him in his representative capacity only, and the tax shall, subject to the other provisions contained in this Chapter, be levied upon and recovered from him in like manner and to the same extent as it would be leviable upon and recoverable from the person represented by him. [(1A) Notwithstanding anything contained in sub-section (1), where any income in respect of which the person mentioned in clause (iv) of sub-section (1) of section 160 is liable as representative assessee consists of, or includes, profits and gains of business, tax shall be charged on the whole of the income in respect of which such person is so liable at the maximum marginal rate : Provided that the provisions of this sub-section shall not app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e taxation of the same amount. Respectfully following the decision of the Bombay High ?Court in the above two cases, the addition is deleted. The Assessing Officer has argued that the trust has taken a premise on rent from Baldota Brothers, a related concern of Rs.14,244/- only and has given on rent to Central Warehousing Corporation for Rs. 15,51,812/-. This activity, the Assessing Officer ahs stated is a business activity and also a colourable device for tax avoidance. However as it appears, the activity is a single isolated activity and there is no structured, systematic activity with frequency. Moreover, the income from this source is getting taxed at the hands of beneficiaries as all of them have taxable income. Therefore, even on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue, namely, S. G. Mercantile Corporation P. Ltd. [1972] 83 ITR 700 (SC) cannot be made applicable to the facts of the case considering that in the said case the lease was for a period of 50 years, the property in question was a market which was let out to various persons who occupied the shops therein, and land in the form of stalls as well as open parcels of lands to vendors by the assessee therein. In other words, there were more than one tenant indicating a systematic and organised activity of sub-letting the property. 13 In the circumstances, the Tribunal was not justified in holding that the assessee was doing business. In the facts of the case, the income is liable to be taxed as Income from other sources and not as Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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