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TMI Blog2018 (12) TMI 1205X X X X Extracts X X X X X X X X Extracts X X X X ..... cord. It is not in dispute the assessee had duly produced the bills for incurrence of purchase of Gold and Silver to the tune of ₹ 2,04,186/-. But we find that the assessee had not established the nexus between the incurrence of this expenditure vis-à-vis the warehousing revenue derived by it. Hence, we hold that the lower authorities were justified in disallowing this claim of ₹ 2,04,186/- towards sales promotion expenses - Decided against assessee Rental income derived from the warehousing activities - income from business or income from house property - violation of provisions of Rule 46A of the Income Tax Rules by the Ld. CIT(A) by not affording an opportunity to the Ld. AO while granting relief to the assessee in respect of this issue - Held that:- We find that the impugned issue is fairly covered in favour of the assessee in its own case by the order of this Tribunal for AY 2010-11 as decided assessee is not providing warehousing service to one or two fixed customers. There is number of customers to whom warehousing service is provided. Apart from that the godwown control of the assessee; customer had no right of occupancy. As per the definition of business u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on warehousing business since last several years. The assessee is a tenant of BPT. The assessee is liable to pay rentals in respect of premises taken on lease to BPT. BPT increased the rentals which was subject matter of litigation for AY 1990-91,91-92 92-93. However, the assessee in the past, has provided for the incremental rentals payable to BPT and claimed the same as deduction in the returns filed for AY 1990-91,91-92 92-93. This was disallowed by the Ld. AO. The rentals were ultimately fixed at a particular price by the Hon ble Supreme Court vide its order dated 13/01/2004. But the dispute in income tax proceedings regarding the allowability of rentals which were made only on a provisional basis but not actually paid to the tenant were pending before the Hon ble Bombay High Court. Pursuant to order of the Hon ble Apex Court fixing the rentals payable to BPT, the Hon ble Bombay High Court in ITA No. 838 839 of 2000 dated 04/09/2008 held that the assessee is entitled for deduction only to the extent of rent ultimately fixed by the Hon ble Apex Court. This decision was rendered by the Hon ble Bombay High court pursuant to the appeal preferred by the Revenue before Hon b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery same sum has been allowed in earlier years for the assessee, which in the facts of the instant case, was not granted vide order of Ld. AO dated 30/3/2009. Accordingly, we direct the Ld. AO to delete the addition made in the sum of ₹ 17,11,818/- u/s 41(1) of the Act and allow the ground No.1 raised by the assessee. 7. The next ground to be decided in this appeal is as to whether the Ld. CIT(A) were justified in upholding the disallowance of ₹ 2,04,186/- in respect of sales promotion expenses in the facts and circumstances of the case. The Ld. AO observed that from the details of sales promotion expenditure furnished in the course of assessment proceedings, the assessee had debited the sum of ₹ 2,04,186/- towards sales promotion expenses in its warehousing business. From the details submitted by the assessee, the Ld. AO observed that this expenditure of ₹ 2,04,186/- pertains to purchase of Gold and Silver which were given to various customers for promoting its business. The assessee also pleaded that the warehousing receipts derived by it were offered tax as income from business and that the said sales promotion expenditure were incurred in order to pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d No.3 raised by the assessee is general in nature and does not require any specific adjudication. 9. In the result, the appeal of the assessee is partly allowed. 10. Let us come to revenue appeal in ITA No.7556/Mum/2016 the only issue to be decided in this appeal is as to whether the rental income derived from the warehousing activities of the assessee is to be brought to tax under the head income from business or under the head income from house property in the facts and circumstances of the case. The interconnected issue involved therein is with regard to violation of provisions of Rule 46A of the Income Tax Rules by the Ld. CIT(A) by not affording an opportunity to the Ld. AO while granting relief to the assessee in respect of this issue. We find that the impugned issue is fairly covered in favour of the assessee in its own case by the order of this Tribunal for AY 2010-11 in ITA No.206/Mum/2015 dated 22/06/2017. The said order is reproduced page No. 93-96 of paper book herein under: - This appeal by Revenue under section 253 of Income Tax Act is directed against the order of Commissioner of Income Tax (Appeals)-29 [CIT(A)-29, Mumbai] dated 10-10-2014 for the AY 2010- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13) of the Act, business include adventure or concern in the nature of trade. The word adventure' implies a calculative risk and systematic pattern and operation involved in a trade or practice that will fulfil the instant' case of the assessee. It is providing round the clock service to the clients from various aspects from letting out of goods, their security etc. will definitely fall within the purview of business income. We also find from the order of the id. CIT(A) that the A.O. has accepted the claim of the assessee and treated the income as business income in assessment years 2005-06 2006-07. Therefore, we sustain the order of the Id. CIT(A) treating the assessee's income as business income. This ground of the Revenue is, therefore, dismissed. 5. In ground No. 2, the Revenue is aggrieved by the decision of id. CIT(A) in allowing the income of the assessee as business: income and also allowing all the expenses by violating Rule 46A of the Income Tax Rules, 1962. 6. Rule 46A provides that whenever some additional evidence is accepted by the id. CIT(A), then he must give an opportunity to the A.O. for cross examination or those evidences and or clarifica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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