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TMI Blog2022 (2) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... o responsible to compensate the labourers towards any liability under labour laws arising at the warehouse. Agreement also shows that the assessee is required to provide the equipment for storage of goods. We find merit in the contention of assessee that the alleged gross receipts are not in the nature of rental income from letting out the property but are business receipts received for carrying out warehouse operations as per the terms of the agreement. We set aside the finding of Ld. CIT(A) and hold that both lower authorities erred in treating the alleged receipts as rental income. Finding of Ld. CIT(A) is reversed and the net profit shown from operations of warehouse is directed to be treated as business income. Thus, the addition is de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e selected for scrutiny through CASS followed by serving of notices u/s. 143(2) & 142(1) of the Act. During the course of assessment proceedings Ld. AO observed that assessee has shown profit from warehouse operations at ₹ 5,90,980/- as business income. The gross rent received from warehouse at ₹ 12,45,517/-. Ld. AO concluded the assessment holding that the gross receipts from warehouse operation at ₹ 12,45,517/- is Income from house property and assessee is only eligible for deduction u/s. 24(a) of the Act at ₹ 3,73,655/- and the balance income of ₹ 8,71,861/- is to be taxed as income from house property. The net effect of this action of the Ld. AO resulted into an addition of ₹ 2,80,881/- (Income held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. The assessee has shown the gross receipts of ₹ 12,45,517/- as business receipts and after claiming incidental expenses of ₹ 6,54,537/- has shown the remaining amount as profit at ₹ 5,90,980/- from the operation of the warehouse. Both the lower authorities have treated the gross receipts as income from letting out warehouse and taxable as income from house property. 9. For examining this issue we have perused the agreement for letting out the warehouse placed at pages 11 to 24 which is an agreement entered into between M.P. Warehousing and Logistic Corporation and the assessee. Ongoing through clause (3) of this agreement we find that the assessee is required to maintain the 24 hours security arrangement, cleaning and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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