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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 ..... the appellate proceedings before the learned CIT(A) arising from the assessment order dated 30th November , 2010 passed by the learned Assessing Officer (hereinafter called "the AO") u/s 143(3) of the Income Tax Act,1961 (Hereinafter called "the Act"). 2. The grounds of appeal raised by the assessee company in the memo of appeal filed with the Income Tax Appellate Tribunal, Mumbai (hereinafter called "the Tribunal") read as under:- "1. Under the facts and circumstances of the case and in law, the learned Commissioner(Appeals) [ for short 'Ld. CIT(A)'] has erred in confirming the action of Learned Assessing Officer [ for short 'Ld. AO' ] in treating the legitimate business income in the form of "Leave & License fees and Maintenance & Amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the same property to M/s G E Countrywide Consumers and Financial Services Limited and received income in the form of maintenance charges of Rs. 46,51,200/- and leave and license fees of Rs. 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 having ingredient of business activities. The assessee submitted before the AO that this nature of the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a related concern and giving the same on sub-lease cannot be termed as a business activity. It was observed by the AO that the assessee is not the owner of the premises and hence the income cannot be included under the head income from house property. Since the income does not fall under any of the heads of income, it will fall under the residuary head of 'income from other sources', as was held by the AO vide assessment order dated 30-11-2010 passed by the AO u/s. 143(3) of the Act. 4. Aggrieved by the assessment order dated 30-11-2010 passed by the AO u/s. 143(3) of the Act, the assessee filed first appeal with the learned CIT(A), which appeal was dismissed by the learned CIT(A) as the assessee did not had any evidence to show that it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d license basis and also providing amenities. The assessee's main income is on account of 'leave and license fees' and 'maintenance and amenities fees' . The assessee is not the owner of the property and has taken the property on lease from M/s Mahalaxmi Engineering Company Private Limited and sub-leased the same property to M/s G E Countrywide consumer and Financial Services Limited and received income in the form of maintenance charges of Rs. 46,51,200/- and leave and license fees of Rs. 72,38,430/- from the sub-lease. The assessee has also claimed to be 'premises service provider' which interalia included the services of providing electricity, use of lifts, uninterrupted water supply, maintenance of staircases and common areas, watch and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 buildi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee is not entitled for set off of short term capital loss against any other head of income as per provisions of Section 71(3) of the Act and hence the set off of loss being short term capital loss of Rs. 8,08,101/- was withdrawn and the income was enhanced to that extent by the learned CIT(A). The assessee is aggrieved that the learned CIT(A) enhanced assessment without affording opportunity of being heard to the assessee. The learned DR relied on the orders of the authorities below. 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 opportun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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