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TMI Blog2003 (2) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... ese appeals is as under: "On the facts and in the circumstances of the case and in law the learned Commissioner of Income-tax (Appeals) erred in directing to tax the income derived by the assessee from house property as 'income from business', as against the same assessed as income from house property by the Assessing Officer." The facts of the case are that the assessee-company had entered into a deed of lease with M/s. Kohinoor Tobacco Products (P) Ltd. According to the lease agreement which is unregistered M/s. Kohinoor Tobacco Products (P) Ltd., had leasehold land on which construction till the plinth level was carried out. The leasehold land was located in Jabalpur. The assessee took this land on sub-lease from M/s. Kohinoor Tobacco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing facility; (f) Conference room facility; and (g) Message service and local transport facility. The Assessing Officer examined the accounts of the assessee and found that no electricity expenses have been claimed in the profit and loss account and that the services rendered could not be provided without electricity. It was also the view of the Assessing Officer that the assessee had designed its affairs in such a way that it could take the benefit of various case law and thus avoid the payment of tax. The Assessing Officer also relied on the ratio laid down in the case of East India Housing and Land Development Trust Ltd. v. CIT [1961] 42 ITR 49 (SC). He was therefore of the view that the entire receipts had to be taxed as income from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered as business centre. Further the assessee had spent enormous amount on acquiring air cooling plant for the same building. The assessee has also spent sizeable amount in acquiring furniture and fixtures to be fitted in the same building. The details regarding the acquisition of lift, acquisition of air cooling plant and acquisition of furniture and fixtures had been given along with the balance-sheet and profit and loss account. 1.05. During the course of assessment proceedings, the learned Assessing Officer has asked to show cause as to why the rent received from the tenants be not treated as income under the head "Income from house property". In response to this notice, the assessee had submitted detailed reply vide letter dated F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge services and security services were provided by the assessee." Besides this, the assessee relied on the following decisions before the Commissioner of Income-tax (Appeals): (i) Sultan Bros. (P.J Ltd. v. CIT [1964] 51 ITR 363 (SC); (ii) CIT v. Prem Chand Jute Mills Ltd. [1978] 114 ITR 769 (Cal); (iii) CIT v. National Mills Co. Ltd. [1958] 34 ITR 155 (Bom); (iv) CIT v. Ajmera Industries (P.J Ltd. [1976] 103 ITR 245 (Cal); (v) Addl. CIT v. Hindustan Machine Tools Ltd. [1980] 121 ITR 798 (Karn); and (vi) CIT v. Vikram Cott.on Mills Ltd. [1988] 169 ITR 597 (SC). Finally, the assessee submitted that the impugned income should be assessed as income from business and not as income from house property. The Commissioner of Income-tax (App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he electricity was not paid by the appellant no services were provided by the appellant and therefore the income should be assessed under the head 'Income from house property'. The appellant's arguments are that the expenses were made by the sister concern of the appellant which was to be reimbursed to the sister concern. It was stated that leaving out the facilities of the transport and data processing all the other facilities were provided by the appellant to its tenants. Regarding data processing services and transport facilities, it was stated that the users of the business centre did not ask for the services and therefore they were not provided. In this case the entire income earned has two components, i.e.,-- (i) part of the income i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax (Appeals). The Revenue has not brought anything on record that the assessee is the owner of the property in question. So, it is difficult to believe that the assessee is earning income from the property as far as this income is concerned. Kohinoor Tobacco Products (P) Ltd. was the owner of an old house bearing Corporation No. 1080 of 1970 at Gold Bazar, Jabalpur. By an unregistered lease deed dated October 5, 1987, Kohinoor gave the lease of the land at Rs. 1,000 per month to M/s. Saptarashi Services (P) Ltd to construct a new building thereon, as per the plan approved by the municipal corporation. Accordingly, M/s. Saptarashi Services (P) Ltd. constructed the service centre. The directors of Kohinoor Tabacco Products (P) Ltd., are: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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