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TMI Blog2016 (11) TMI 1248X X X X Extracts X X X X X X X X Extracts X X X X ..... to be brought to tax as ‘Profit and Gains of Business or Profession’ and also allowed the claim of depreciation on assets except on building which was leased by the tax-payer in that case , as the facts in the instant case are similar. Treatment to loss - sale of securities under ‘Portfolio Management Services’ - Business loss or short term capital loss - assessee is aggrieved that the learned CIT(A) enhanced assessment without affording opportunity of being heard to the assessee - Held that:- The power of learned CIT(A) is co-terminus with powers of the AO which include power of enhancement of the assessment by the learned CIT(A) but principles of natural justice are to be adhered to and the learned CIT(A) ought to have given proper opportunity of being heard to the assessee in accordance with principles of natural justice before enhancing of the assessment. Thus in order to do complete justice in the matter, this issue is to be set aside and restored to the file of the learned CIT(A) to de-novo adjudicate the issue on merits after affording opportunity of being heard to the assessee. Needless to say that proper and sufficient opportunity of being heard shall be provided by lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-2013 of Mr. Nimesh L. Joshi, Managing Director of the assessee company which is placed in file , wherein it is submitted by the said Mr. Nimesh L. Joshi that the appeal was delayed by 11 days due to his illness during the relevant period . The ld DR did not raised any objection to the delay. The delay of 11 days in filing appeal late is condoned and the appeal is being heard on merits. 4. It was observed by the AO that the assessee has taken on lease premises owned by M/s Mahalaxmi Engineering Company Private Limited and subITA leased the same property to M/s G E Countrywide Consumers and Financial Services Limited and received income in the form of maintenance charges of ₹ 46,51,200/- and leave and license fees of ₹ 72,38,430/-from the sublease and shown under the head profit and gains from business and profession . The AO show caused the assessee as to why the same should not be brought to tax under the head income from other sources . The assessee submitted before the AO that there are two separate agreements for providing the license and amenities / services to the occupants of the premises and this a complex process of providing the space solutions ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commercial basis, vide appellate order dated 27-12-2011 passed by learned CIT(A). The learned CIT(A) also disallowed depreciation on assets to the tune of ₹ 1,71,006/- since the rental income and maintenance income has been assessed to tax as income from other sources , no depreciation is allowable u/s 57(2) of the Act as the depreciation does not relate to income from plant and machinery or furniture . 5. Aggrieved by the appellate order dated 27-12-2011 passed by learned CIT(A), the assessee filed second appeal with the Tribunal. 6. The learned counsel for the assessee contended before the Tribunal that the assessee case is covered by the decision of the Mumbai Tribunal in the case of the sister concern of the assessee namely Shreenath Balaji Computech Private Limited v. ACIT in ITA no. 6251 6253/Mum/2012 for the assessment years 2006-07 and 2008-09 vide orders dated 17-06-2015. The assessee also relied upon the decision of Hon ble Supreme Court in the case of Chennai Properties and Investment Limited v. CIT in (2015) 373 ITR 0631(SC) and decision of Mumbai Tribunal in the case of ITO v. Rasiklal Co. reported in (2009) 119 ITD 61(Mum. Trib). 7. The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Association of the assessee company (pb-I/page 1-30) did not specify that the assessee would take any premises on lease and would in turn sub-lease the same of leave and license basis , but the intention of the assessee to exploit the asset leased by it is clear from activities carried on by the assessee from the perusal of its audited financial statements (pb-I/page 31-65) . The assessee in our considered view is involved in a systematic activity of exploiting its asset, which in turn it had taken on lease , is thus involved in carrying on business activity. Thus, the income arising there from such business activity is to be assessed to tax in the hands of the assessee under the head Profits and Gains from Business or Profession as income from business. The assessee is entitled for claim of expenditure including depreciation of assets but not on the building , as the building was leased by the assessee wherein the assessee is not the owner , as deduction against such business income . The case of the assessee is covered by the decision of Mumbai Tribunal in the case of Shreenath Balaji Computech Private Limited v. ACIT in ITA no. 6251/Mum/2012 and 6253/Mum/2012 vide orders ..... X X X X Extracts X X X X X X X X Extracts X X X X
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