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TMI Blog2021 (12) TMI 1043X X X X Extracts X X X X X X X X Extracts X X X X ..... ace rented out by it to two parties as business income. However, the income tax authorities and even appellate authorities did not agree with the aforesaid plea of the assessee and held that the assessee was primarily in the activity of providing IT Solutions and related activities and that renting of property was not the business activity of the assessee. One fact which is apparent on the file is that the assessee had not concealed his income and under the bona fide belief, offered the same for taxation. However, the income tax authorities assessed it under different head. Even the pertinent fact on the file is that in the immediate preceding assessment year, the assessee had offered the same income as income from business and which was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he justice be provided to the appellant by following those principles. iii) That the Appellant reserves the right to alter, add or delete any grounds of appeal at the time of hearing. 2. A perusal of the above grounds of appeal reveals that the assessee in this case has agitated the levy of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 (in short 'the Act'). The brief facts of the case are that the assessee was a partnership firm that came into existence with effect from 11.04.2011. The main object of the firm as per para 3 of the partnership deed was That the nature of the business of the partnership shall be to provide, deal, offer, develop, run, sell, outsource information technology, clients need based IT Solutions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c. As the firm was not providing only the vacant space on rent but providing the space with various other fixtures as per requirement of party, according the income from space rentals has been shown as income from Business and Profession. 4. However, the AO did not get satisfied with the above reply of the assessee and held that the business activity of the assessee was related to information technology solutions and related solutions activity. He, therefore, treated the aforesaid rental income as income from house property. The assessee carried the matter upto the level of Tribunal but could not succeed. 5. In the meantime, the AO levied the impugned penalty u/s. 271(1)(c) of the Act on the ground that the assessee had wrongly shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been mentioned that one of the object of the assessee was to provide space solutions to its clients. The assessee taking shelter under the aforesaid object, returned the income from the space rented out by it to two parties as business income. However, the income tax authorities and even appellate authorities did not agree with the aforesaid plea of the assessee and held that the assessee was primarily in the activity of providing IT Solutions and related activities and that renting of property was not the business activity of the assessee. May it be so, one fact which is apparent on the file is that the assessee had not concealed his income and under the bona fide belief, offered the same for taxation. However, the income tax authorities a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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