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TMI Blog2019 (1) TMI 999X X X X Extracts X X X X X X X X Extracts X X X X ..... of brought forward business loss by treating the business income as NIL. - Held that:- CIT(A) while appreciating the facts of the present case had rightly considered that AO has erred in holding the amount as Brought forward Business Loss and disallowing the said amount, which represents the credit available u/s 115JAA and hence the disallowance of the said amount made by the A.O. was rightly set aside by directing AO to give the credit for the said amount u/s 115JAA of the Income-tax Act, 1961. - Decided against revenue - I.T.A. No. 5926/Mum/2017 - - - Dated:- 16-1-2019 - Sh. Sandeep Gosain, JM And Sh. G. Manjunatha, AM For the Appellant : Shri Arvind Kumar, DR For the Respondent : Shri Rajesh S. Shah, AR ORDER PER SANDEEP GOSAIN, JUDICIAL MEMBER: The present Appeal filed by the revenue is against the order of Ld. CIT (Appeal) 20, Mumbai dated 30.06.17 for AY 2014-15 on the grounds mentioned herein below:- 1. Ld. CIT(A) has erred in deleting the addition of ₹ 5,09,27,464/- house property income determined by the AO against the income/loss shown as business income by the assessee. 2. Whether on the facts and in circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) is not justifiable and is liable to be set aside. However, on the other hand, the Ld. Representative of the assessee has refuted the said contention and argued that the CIT(A) has decided the matter of controversy on the basis of the decision of the Hon‟ble Supreme Court in the case of Chennai Properties and Investments Ltd. Vs. CIT (2015) 56 Taxmann.com 456 (SC) and on the basis of the decision of the Hon‟ble Supreme Court in the case of Shambhu Investment P. Ltd. Vs. CIT 263 ITR 143 (SC) therefore, the finding of the CIT(A) is not liable to be disturbed in the interest of justice. It is also specifically argument that the case of the assessee has duly been covered by the decision of the Hon‟ble ITAT Mumbai Bench in ITAT. No.1771/M/2016 dated 05.01.2018, therefore, in the said circumstances, the appeal of the revenue is liable to be dismissed. Before going further, we deemed it necessary to advert the finding of the CIT(A) on this issue which has been given in para no. 9 and is reproduced as under.: - 9, The 3rd, 4th, 5th and 6th grounds of appeal are of similar nature and are taken together as these pertain to head of income which the liability to pay ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee and the related expenditure has to be allowed in the hands of the assessee. Since the income is held to be in the nature of business income the assessee would be entitled to the set off of brought forward business loss as per the return of income. The A.O, is directed to allow this claim of the assessee. Accordingly, these grounds of appeal of the appellant are allowed. 5. However, it also came into notice that the Hon‟ble ITAT in the assessee‟s own case in ITA. No. 1771/M/2016 dated 05.01.2018 has decided the matter of controversy in favour of the assessee in which the income from lease and service charges of the assessee has been treated as income from the business. The relevant finding has been given in para no. 4, 5 6 which are hereby reproduced as under.: - 4. Issue No. 1 3 are inter-connected, therefore, are being taken up together for adjudication. Under these issues the matter of controversy is that whether the income from leave and license of ₹ 1,99,73,433/- and service charges of ₹ 1,33,90,233/- were chargeable under the head of income from business or income from house property. The Ld. Representative of revenue ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chennai Properties and Investment Ltd. as discussed and the ratio as laid out by the Apex Court is applicable on the facts of the case. Respectfully following the judgment of the Apex Court in the case of Chennai Properties and Investment Lt business of the assessee and memorandum of association and also relying upon the finding of the Hon‟ble Supreme Court in the case of Chennai Properties and Investment Ltd. Vs. CIT (2015) 56 Taxmann.com 456 (SC) has allowed the claim of the assessee and treated the income from leave and lease and service charges as business income. Moreover, the facts are more clear when the Hon‟ble ITAT has decided the issues in favour of the assessee while passing the order in the assessee‟s own case for the A.Y. 2010-11 in ITA. No. 261/M/2016 dated 08.11.2016 as Hon‟ble ITAT has held as under:- 3. We have heard rival contentions and gone through the facts and circumstances of the case. We find that the assessee entered into leave and license agreement and service agreement separately in respect of leasing out of industrial premises and for providing services. The assessee company has given its two industrial buildings i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o entered into service agreement in respect of various services rendered by them. Copy of the said agreement is annexed herewith as Annexure-C. it can be seen from the annexed agreement that in addition to letting out of premises our client provides various kinds of services such as security, maintenance of premises, operating and maintenance of elevators, repairs and maintenance of the building and fire alarm and other safety features. In addition to the aforesaid services, the agreement also contains a residual clause whereby out client is to provide various assistance as may be requested by the licensee. Further out client submits that they have developed the entire property in to industrial complex with the requisite infrastructure facilities and they also provide various services to the licenses. In view of the above our client submits that they have let out the industrial units along with venous infrastructure facilities and they also provide various other services to the licensees. In addition to the aforesaid, out client would also like to state that the directors of our client are also employed fulltime to enable the smooth functioning and operation of the industrial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 223; Court in the case of Chennai Properties and Investments Ltd. and on the facts of the case it is held that the income earned by the appellant company during the year was in the nature of business income and not in the nature of income from House Property as taken by the Learned Assessing Officer. The additions made by the Assessing Officer in this regard cannot be sustained in appeal and are directed to be deleted. Accordingly, the grounds of appeal of the appellant are allowed. 4. We find from the above facts and circumstances of the case that the CIT (A) has rightly allowed the claim of the assessee that of the leave and license charges and service charges as income from business and we uphold the same. This issue of Revenue‟s appeal is dismissed. 6. In view of the above said facts and circumstances, we are of the view that the CIT(A) has rightly allowed the claim of the assessee and considered the income from leave and license charges and service charges as income from business. Accordingly, we decide these issues in favour of the assessee against the revenue. 6. On appraisal of the above mentioned finding and considering this fact that the case of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the assessment proceedings. It is observed that the Ld. AO has erred in holding the amount of ₹ 7,47,711/- ( ₹ 2,53,993/- +Rs. 4,93,718/- for A.Y. 2010-11 and A.Y. 2013-14 respectively) as Brought forward Business Loss and disallowing the said amount of ₹ 7,47,711/-. In view of the fact that the aforesaid amount of ₹ 7,47,711/- represents the credit available u/s 115JAA of the Income-tax Act, 1961, the disallowance of the said amount of ₹ 7,47,711/-made by the A.O. cannot be sustained in appeal and is set aside. The learned A.O is hereby directed to give the credit for the said amount of ₹ 7,47,711/- u/s 115JAA of the Income-tax Act, 1961. Accordingly, this ground of Appeal of the appellant is allowed. After having gone through the facts of the present case and hearing the parties at length, we find that Ld. CIT(A) while appreciating the facts of the present case had rightly considered that AO has erred in holding the amount of ₹ 7,47,711/- as Brought forward Business Loss and disallowing the said amount, which represents the credit available u/s 115JAA of the Income-tax Act, 1961 and hence the disallowance of the said amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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