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TMI Blog2014 (12) TMI 1321X X X X Extracts X X X X X X X X Extracts X X X X ..... r the head, “profits and gains of business or profession”, we are of the view that principle of consistency will apply in this case as the issue stand covered by the decision of coordinate bench in the case of M/s. Banwarilal Goel & Sons Vs. ITO [2014 (2) TMI 1337 - ITAT KOLKATA] In view of the above discussions, we uphold the grievance of the assessee and direct the Assessing Officer to treat the income in question as income from business as has been in preceding and subsequent assessment year. - Decided in favour of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- 13,80,000 4 Anglo Swiss Watch Co 58, Hemanta Basu Sarani 15,000/- 1,80,000 The Assessing Officer after considering the submissions of the assessee, assessed the same as 'income from house property' from the following:- Sl No Name of Tenants Premise occupies Total (Rs) 1 Hutch 4E, BBD Bag, ground floor 6,00,000 2 Hutch 8, BBD Bag - 1920 s.ft. - now known as, 62 Hemanta Basu Sarani 13,80,000 3 Anglo Swiss Watch Co 58, Hemanta Basu Sarani 1,80,000 21,60,000 But assessed the balance at ₹ 1.44 lakhs from CRI Ltd. as income from other source as under:- "Fees received from CRI Ltd. for allotment of space for putting up transformer ₹ 1,44,000/-" Aggrieved against the action of the Assessing Officer in assessing the income declared by the assessee as income from business or profession as 'income from house property' preferred appeal before CIT(A). 4. The CIT(A) after considering the submission of the assessee, accepted the claim of the assessee to be assessed as 'income from business or profession' vide his order as under:- "I have carefully considered the submission of the A/R of the appellant along with the supporting details furnished, pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Registrar of Companies having its independent Memorandum of Incorporation and Articles of Association and assessed to tax separately on the income earned by them. There having common directors on the companies' Board did not by itself prove any colourable device, nor has the Assessing Officer bring on record any material to support his finding. Therefore, such unsupported finding cannot be sustained. Secondly, the finding that the lessee company could exercise rights in his own rights and so the income earned by it from sub-letting is income from house property I also not justified. In R.B. Jodha Mal Kuthiala v. CIT [1971] 82 ITR 570 (SC), it has been held that owner must be that person who can exercise rights in his own rights - For the purpose of section 9 of the 1922 Act [corresponding to section 22 of 1961 Act], the owner must be that person who can exercise the rights of the owner, not on behalf of the owner but in his own rights. This would mean that the owner must have the right of transfer of the property, which is not vested in the lessee. In CIT v. Supreme Credit Corporation Ltd. [1998] 230 ITR 700 (Cal), it has been held that to deem the lessee as the owner of the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ike purchasing current in bulk and supplying the same to tenants, provision of hot and cold water, scavenging and lift services and maintained a large staff for the provision such services from the facts found by the Tribunal it follows that the services rendered by the assessee to its tenants were the results of its activities carried on continuously in an organized manner with a set purpose and with a view to earn profits. Hence those activities have to be considered as business activities. Decision of Calcutta High Court dated 16th June, 1967 in IT Ref. No. 20 of 1963 reversed. The appellant company has specifically shown to have carried out the following activities in order to earn the income: 1. To ensure regular supply of water 2. To keep outside area clean and hygienic. 3. To keep common parts clean and properly lighted. 4. To liason with CESC regarding supply of electricity 5. To provide general security.' These are activities of regular in nature and are services to the tenants with a set purpose and with a view to earn profits. Therefore, following the ratio laid down by the Hon'ble Supreme Court in the case cited supra, these activities have to be considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No. 374/K/2009 for AY 2005-06 dated 13.02.2014, wherein it is held as under:- "6. We have heard the rival contentions, perused the material on record and gone through facts and circumstances of the case. We find that the Hon'ble Calcutta High Court in the case of Shambhu Investment held that "the mere fact of attachment of income to any immovable property cannot be the sole factor for assessment of such income as income from house property. It is necessary to find out the primary object of assessee while exploiting the property. If it is found that the main intention is for letting out the property or any portion thereof the same must be considered as rental income or income from house property. In case, it is found that the main intention is to exploit the immovable property by way of complex commercial activities, in that event it must be held as business income". The view was expressed by Hon'ble Calcutta High Court and approved by Hon'ble Supreme Court in case of Shambhu Investment (P) Ltd.(Supra) In this view of the matter, it is clear that what is to be really seen is whether the property is exploited by way of complex commercial activity or not. In this backdrop, it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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