9911796707
TMI Blog2012 (9) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... AO as 'income from other sources'. 2. In the first issue, after hearing both the parties, we find that during assessment proceedings, the AO noted that assessee had received annual rent of Rs.59,48,571/- out of which a sum of Rs.7,72,465/- was claimed on account of house tax paid, Rs.133,161/- as interest on borrowed loan and Rs.15,52,832/- as per provisions of Section 24(a) @ 30% of annual income. The assessee was asked to justify the claim of declaring such income under the head 'income from house property'. In response, it was stated vide letter dated 23.11.2009 as under: "As regards your Honour's query relating to allowance of 30% of repairs of rental income be not disallowed and why rental income be not treated as business income, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, well the properties. According to him, from these objects, it was clear that main object was to deal with the real estate. Therefore, assessee was not a simplister owner of a property, which has been given on rent. He also noted that assessee has claimed an expenditure of Rs.72,796/- on account of lease deed charges, which clearly indicate that main activity was business activity and accordingly, the rental income was held to be assessable under the head ' income from business or profession' . Consequently deduction u/s 24(1) @ 30% amounting to Rs.15,52,832/- was denied. Interest amounting to Rs.1,33,161/- on borrowed capital was also disallowed because only such interest was paid in earlier year. Payment no house tax amounting to Rs.7, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Counsel for the assessee, while supporting the order of CIT(A) , submitted that in all earlier years, the identical income has been assessed as income from house property. Even after the search, when assessments were framed u/s 153A/153C, income was assessed as income from house property. 7. We have heard the rival submissions carefully and found that ld. CIT(A) has correctly decided the issue. Once assessee is owner of a building and has earned rental income, the same has to be treated as income from house property because specific head, dealing with income on house property is available. As far as the deduction on account of house tax and interest is concerned, the same are deductible even under the head 'income from business or profes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y purchased for real estate activities and was given on lease to various parties. Therefore, income could not be treated as agriculture income. On appeal before CIT(A) , it was mainly submitted that even incomes received from agriculturist out of lease charges, were to be treated as agriculture income under Section 10(1) of the Income-tax Act,1961. Ld. CIT(A) was satisf ied with the submissions and allowed the claim of agriculture income. 10. Before us, ld. DR supported the order of AO. 11. On the other hand, ld. Counsel of the assessee supported the appellate order. 12. After hearing rival submissions, we find that ld. CIT(A) has adjudicated the issue vide para 6 of his order, which is as under: "I have considered the basis of additio ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
