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2020 (7) TMI 100 - ITAT DELHITreatment to loss from the unit in Trump Hotel International under ‘income from other sources' - HELD THAT:- As evident from the conduct of the assessee that the assessee was not intending to run a unit in Trump Hotel International himself but rather he had purchased the unit while he was employed with an Oil Exploration Company in USA and he has given this unit for being run under the ‘Hotel Operations and Maintenance Agreement’ to be run by the managing company. At no point of time has the assessee ever been engaged in running the Hotel Unit on his own. It is also evident that the control of the affairs of the assessee’s unit like to whom the unit is to be let out, what kind amenities are to be provided within the unit, what tariff has to be charged from the unit etc. are beyond the control and decision making powers of the assessee. Unit under consideration cannot be considered to be a business undertaking of the assessee. Admittedly and undisputedly, the Department has also accepted this position in the preceding two assessment years. Although the principle of res judicata does not strictly apply to Income tax proceedings, all the same, the Hon’ble Apex Court in the case of Radha Soami Satsang Vs. CIT, [1991 (11) TMI 2 - SUPREME COURT] as held that the revenue cannot disturb and alter issues which have already been settled in previous years if there is no change in the facts and circumstances - unable to accept the view taken by the Ld. CIT (A) and we set aside his finding on the issue and direct the Assessing Officer to treat the loss from the unit in Trump Hotel International under ‘income from other sources’. Determining the head of income for share of loss from LLCs situated in the USA - assessee had made investment in two limited liability companies in the USA - HELD THAT:- Assessee, by virtue of being the whole time employee Director in an oil exploration company, could not have made the capital outlay in the two limited liabilities company for the purpose of business and, apparently, this was only for the purpose of an investment. AO seems to have overlooked this factor and somehow failed to appreciate that in the case of outlays of this nature, it is important to determine as to whether the investment was in the realm of business or not. AO has at no point of time established that the intention of the assessee was to earn out of business - also has chosen to ignore the fact that in the preceding assessment years, the investment of this nature have consistently have not been treated as business. Even on the ground of consistency, the impugned loss should have been treated as loss under other sources. Also it is well-settled that the onus is on the Revenue to prove that the particular time of income or loss is from business. However, in the present case such a finding by the Assessing Officer is entirely absent. Accordingly, there is no foundation for AO to have treated the impugned loss as business loss and we have no option but to disagree with the findings of the Ld. CIT (A). - Decided in favour of assessee.
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