TMI Blog2014 (8) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... ession - the AO is directed to treat the interest income under the head “Profits and Gains of Business or Profession – Decided in favour of assessee. Taxability of income from amenities under the head “Income from other sources” – Held that:- The assessee has entered into two separate agreements one relating to the rent of the leased premises and the other relating to the amenities - Relying upon CIT Vs. J.K. Investors [2012 (11) TMI 186 - BOMBAY HIGH COURT] - the service agreement is totally dependent upon the rent agreement considering the amenities to be provided by the assessee, which includes lift facility, security, common area facility, car parking etc. - all the amenities are part and parcel of the building which are necessary fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 79/- and rent at ₹ 17,96,792/-. The interest income has been offered under the head profits and gains of business or profession and rental income under the head Income from house property. 4.1. During the course of the scrutiny assessment proceedings, the assessee was asked to justify its claim of interest income offered under the head profits and gains of business or profession. It was explained that the assessee is in the business of investment and finance and in pursuance to its business activity, the assessee received loan from ACT Fininvest Ltd., and tendered the same to M/s. Dawns Mills Co. Ltd. The AO considered the explanation of the assessee in the light of the Memorandum and Articles of Association. The AO observed that g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served that the assessee was not engaged in money lending business. The assessee has earned interest only on the money advanced by it to its sister concern. Therefore, the interest income cannot be said to be in the ordinary course of the business and went on to confirm the action of the AO by treating the interest income under the head income from other sources on holding that the assessee is not carrying out any business activity. The Ld. CIT(A) further confirmed the disallowance of expenditure. 6.1. On the issue of income from house property vis- -vis income from other sources, the Ld. CIT(A) observed that the assessee was having two separate agreements one for the leasing out of premises and the other for the provision for amenities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he head Profits and Gains of Business or Profession. Having held that, we direct the AO to consider the claim of expenditure under the head Profits and Gains of business or profession as per the provisions of law after due verification and after giving reasonable opportunity of being heard to the assessee. Ground No. 1 is allowed and ground No. 2 is allowed for statistical purpose. 10. The next grievance relates to the taxability of income from amenities under the head Income from other sources . It is not in dispute that the assessee has entered into two separate agreements one relating to the rent of the leased premises and the other relating to the amenities. A perusal of both these agreements shows that the service agreement is de ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
