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TMI Blog2016 (9) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... in the State of J & K and letting out the same. This is exactly the same object as was that of the assessee in ‘Chennai Properties And Investment Limited’ (supra). Therefore, in accordance with ‘Chennai Properties And Investment Limited’ (supra), we hold that the assessee is correct in contending by way of the additional ground taken that the rental/licence fee received by the assessee in respect of the subject property given on lease to BHL is liable to be assessed as business income and not as income from house property, as the assessed by the Taxing Authorities. The additional ground taken by the assessee is thus, accepted. - ITA No. 323(Asr)/2015, 757(Asr)/2014, 758(Asr)/2014, 369(Asr)/2015, 370(Asr)/2015, 371(Asr)/2015, 372(Asr)/2015, 373(Asr)/2015, 33(Asr)/2015, 34(Asr)/2015, 443(Asr)/2015, 480(Asr)/2015, 481(Asr)/2015, 482(Asr)/2015, 483(Asr)/2015, 484(Asr)/2015 - - - Dated:- 26-8-2016 - SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER Appellant by: S/Sh. Ajay Vohra, Sr.Adv.alongwith Gaurav Jain, Krishan Kumar Satish Sachdeva Respondent by: Sh.Umesh Takkyar, DR ORDER Per A. D. Jain, JM These are the cross appeals eight by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cost of land and building at ₹ 6,68,30,535 and adopting 10% thereof as the ALV of the subject property for the year under consideration, purely on ad-hoc basis. 2.4. That the CIT(A) erred on facts and in law in rejecting the comparable instances brought on record by the appellant in support of the fair market value of the subject property. Additional Ground 3. That on the facts and in the circumstances of the case, the rental/license fee of ₹ 5 Lacs received by the appellant in respect of subject property, given on lease to Bharat Hotels Ltd., is liable to be assessed as business income, instead of income from house property assessed by the lower authorities. 3. The Revenue has raised the following grounds of appeal in ITA No.443(Asr)/2015, for the assessment year 2006-07, which are identical in all other appeals: 1. That on the facts and circumstances of the case and in law, the Ld. CIT (A) has in passing the Appellant order without giving an opportunity of j heard to the Assessing Officer which is mandatory as per the provisions of Section 250(1) and 250(2) of the I.T. Act, 1961. Thus, violating principal of natural justice and theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee took on lease land measuring 222 kanals and 19 marlas under and adjoining Gulab Bhawan Palace for a period of 40 years, vide lease deed, dated 21.03.1973 at an annual rent of ₹ 22,897/- from Shri Vikramaditya Singh. This lease was renewed for a period of 99 years vide lease deed, dated 22.11.1997. The said Gulab Bhawan Palace, i.e., building/super structure thereof was renovated by the assessee and it was let out to Bharat Hotels Limited ( BHL , for short) vide licence agreement dated 03.02.1998 for a period of 99 years, whereunder the BHL was given a right to use, upgrade, renovate and reconstruct the Gulab Bhawan Palace and other adjoining structures, for the purposes of commissioning a 5-Star Hotel, at an annual license fee/rent of ₹ 5 lacs. For the assessment year 2006-07, the assessee filed its return of income, on 20.10.2006 declaring income of ₹ 28,76,910/- including license fee of ₹ 5 lacs. received from BHL, under the head of business income. This was accepted under section 143(1) of the I.T.Act, 1961 and the return of income was not selected for scrutiny u/s 143(3). However, a notice under section 148 of the Act was issued on 21.03.2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd it is not income from house property, as wrongly assessed. It has been stated that it is settled law that there is no estopples in law and wrong position taken can legally always be resiled from. 7. On the other hand, relyinge on the impugned order, the ld. DR has contended that Chennai Properties And Investments Limited (supra), is not at all applicable to the facts of the present case and, therefore, the same has wrongly been sought to be relied on by the assessee. In that case, as per the ld. DR, the assessee had also made claim under one head of income and the AO had applied another. The ld. DR contends that this is not so in the present case. 8. We have heard the rival cntentions on this issue and have perused the material available on record with regard thereto. Initially, the assessee had claimed the income earned by the assessee from letting out the subject property, i.e., Gulab Bhawan Palace, as business income. This position was accepted u/s 143(1) of the Act. However, on the reopening of the completed assessment, in the revised return, the income was offered as income from property, in accordance with the provisions of section 22 read with section 23 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India Housing and Land Development Trust Limited , (supra), the Hon ble Supreme Court observed that that was a case where the company had been incorporated with the object of buying and developing landed properties and promoting and developing markets; that thus, the main objective of the company was to develop landed properties into markets; that the company had rented out some shops and stalls developed by it and the income derived from the renting of those shops and stalls was in question, i.e., as to whether such income was income from house property, or the income from business; that while holding that the income shall be treated as income from house property, the Hon ble Supreme Court rested its decision on the context of the main objective of the company and had taken note of the fact that letting out of the property was not the object of the company at all; and that the Hon ble Supreme Court was, therefore, of the opinion that the character of that income, which was from the house property, had not altered, because it was received by the company formed with the object of developing and setting up of properties. Discussing the decision of the Hon ble Supreme Court in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 222 kanals and 19 marlas under and adjoining Gulab Bhawan Palace was taken on lease vide perpetual lease deed dated 22.11.1997. It was further let out for a period of 99 years. The assessee retained the right to use, upgrade, renovate and reconstruct Gulab Bhawan Palace and other adjoining structures for the purposes of commissioning. The 5-Star Hotel, had an annual licence fee/rent of ₹ 5 lacs. The assessee offered the said receipt as business income. 12. The argument might be raised that since the assessee had itself earlier offer the income from letting out the property as income from house property, the assessee cannot now be turned around to resile from this self-avowed and accepted position. To this, it is trite that there is no estopple against the law. An assessee can well resile from a wrong position originally taken. To support this position, the assessee has rightly relied on the following decisions: i) CIT vs. Bharat General Re-Insurance Co. Ltd. , 81 ITR 303 (Del.) ii) Pt. Sheo Nath Prasad Sharma V. CIT , 66 ITR 647 (All.) iii) Smt. Snehlata Jain Vs. CIT , 192 CTR 50 (J K) iv) S.R. Koshti vs. CIT , 276 ITR 16 (Guj.) v) DCIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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