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TMI Blog2016 (7) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... eparture from the earlier stand of treating the income from providing business service centre facility as income from business income. Therefore, on these aspect we set-aside the order of CIT(A) and direct the Assessing Officer to treat the income earned by the assessee from business service centre as ‘income from business’ in conformity with his stand for the other assessment years. Thus, assessee succeeds on this aspect of the controversy. - Decided in favour of assessee Disallowance u/s 14A - Held that:- The case set-up by the assessee is based on the provisions of section 14A(2) of the Act, which requires the Assessing Officer to record a satisfaction about the correctness of the claim by the assessee before proceeding to disallow an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. In this appeal assessee has raised the following Revised Grounds of appeal:- 1. The learned CIT(A) erred in confirming the order of learned Assessing Officer treating Business Services Charges received of ₹ 2,52,55,504/- as income from House Property without appreciating that Assessee is in the business of providing Business Service Centre and Business Service Charges are consistently assessed as Business Income and hence Business Service Charges received may be treated as income from Business and Profession u/s 28 of the Income Tax Act. 2. The learned CIT(A) erred in disallowing ₹ 12,10,223/- u/s 14A r.w.Rule 8D without appreciating that Sec. 14A r.w.Rule 8D cannot be invoked in on automatic fashion and that asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as income from business and profession . Apart therefrom, reference has also been made to the written explanation furnished before lower authorities, copies of which have been placed in the Paper Book at Pages 39 to 43, in order to justify that the income is earned for providing composite business centre service facilities and not merely for letting out of the premises. The Ld. Representative for the assessee explained that so far as rentals earned from the two premises situated at Chennai Pune is concerned, the same has been offered by the assessee itself as income from house property since the properties were let out to tenants and not used for the business of providing business centre services. It was, therefore, contended that asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was difference between letting out of house property and the running of commercial business centre. The relevant discussion in the orders of the authorities below reveals that none of the factual aspects canvassed by the assessee have been negated by the income-tax authorities. In fact, the emphasis of the Assessing Officer has been that since the premises owned by the assessee are used to provide such services, income therefrom be taxed as income from house property. In our considered opinion, the simplistic approach adopted by the Assessing Officer is clearly untenable and the controversy has to be addressed keeping in mind the nature and manner in which activities have been carried out by the assessee. Moreover, even on the principles of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eating the income from providing business service centre facility as income from business income. Therefore, on these aspect we set-aside the order of CIT(A) and direct the Assessing Officer to treat the income earned by the assessee from business service centre as income from business in conformity with his stand for the other assessment years. Thus, assessee succeeds on this aspect of the controversy. 6. The only other issue remaining is with regard to the disallowance made under section 14A of the Act. In this context, brief facts are that assessee company was found to have earned dividend income of ₹ 31,01,182/-, which was exempt from tax. In its return of income assessee had disallowed a sum of ₹ 7,93,306/- being inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Maxopp Investment Ltd. vs C.I.T. (2012) 247 CTR (Delhi) 162 In the present case, we find from the discussion in the assessment order that there is no satisfaction recorded by the Assessing Officer about the correctness of the claim of the assessee and he has proceeded to re-compute the disallowance under section14A of the Act by applying the provisions of Rule 8D of Income Tax Rules, 1962 in a mechanical manner. Therefore, in our view the action of the Assessing Officer is lacking in jurisdiction and deserves to be set aside. We hold so. As a consequence, we set-aside the order of the CIT(A) and direct the Assessing Officer to retain the disallowance made by the assessee in his return of income and delete the balance. Thus on thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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