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TMI Blog2016 (8) TMI 903X X X X Extracts X X X X X X X X Extracts X X X X ..... m business. - Decided in favour of the assessee - I.T.A. No.4123/Del/2005 - - - Dated:- 13-7-2016 - SHRI N. K. SAINI, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER For The Appellant : Shri P. Dam Kanunjna, Sr. DR For The Respondent : Shri Mukesh Kumar Bansal, CA ORDER PER BEENA A. PILLAI, JM: The present appeal raised by the Revenue, has been taken up with the directions of Hon'ble High Court in I.T.A.No. 1117/2008 vie order dated 02.04.2008. The Hon'ble High Court observed as under: 16. It is clear from the aforesaid paragraph that to arrive at a legal conclusion, factual aspects have to be ascertained. Without noticing the factual aspects including the contentions, clauses of the lease agreement and maintenance agreement, the tribunal has erred in reaching and giving its conclusions without any discussion. Inferences have been drawn without referring to the material/evidence. Therefore, an erroneous order has been passed. 17. In view of the aforesaid discussion, we answer the second substantial question of law quoted above in negative i.e. in favour of the appellant-Revenue and against the assessee and an order of remit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld the findings of Ld. CIT(A) vide order dated 31.10.2007. 3.2 Aggrieved by the order of this Tribunal, the revenue preferred an appeal u/s 260A of the Act before the Hon'ble High Court. On considering the arguments advanced by the Revenue, the Hon'ble High Court sent back the issue to this Tribunal for re-verification of the facts in the light of decision passed by Hon'ble Supreme Court in the case of Universal Plast Ltd. (supra). 4. We have perused the orders of authorities below as well as the arguments presented by both the sides. Hon'ble Supreme Court in the case of Universal Plast Ltd. (supra) has laid the following propositions: (i) No general principle could be laid down which is applicable to all cases and each case has to be decided on its own facts and circumstances. (ii) Whether an income falls under one head or another has to be decided according to the common notions of a practical and reasonable man, for the Act does not provide any guidance in the matter. (iii) In each case, what has to be seen is whether the asset is being exploited commercially by the letting out or whether it is being let out for the purpose of enjoying the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction quite apart from the ordinary business activities of the assessee. (ix) In the descending whether an assessee dealt with its property as owner or as a businessman or as a prudent man of commerce. One must see not the form which it gave to the transaction but to the substance of the matter. In which that property is used, ownership of property and leasing it out may be done as a part of business or it may be done as a landowner. Whether it is the one or the other must necessarily depend upon the object with which the act is done. If the dominant object of leasing out is incidental to and for the purpose of the assessee's business, the income would be business income. What has to be discovered is whether the property is subservient to the main business of the assessee. 4.1 It has been submitted by the Ld. A.R. that the industrial property at F-83, Okhla was used by assessee for its printing press business since 1986. The Ld. A.R. submitted that assessee had temporarily shut down the activity of printing press as it had shifted its branch office to Mayar Tower. Ld. A.R. submitted that the assessee had let out the industrial property temporarily for a period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay of August, 2000 and expiring on 24h day of Augusts, 2003. The lease has an option to renew the Agreement for a further period of 36 months on the same terms and conditions as laid down in this agreement. Such option shall be exercised by the lessee 60 days before the date of the expiry of the Agreement. The lessee also undertakes to hand-over vacant and peaceful possession of the said premises after expiry of 6 years from the date of the Agreement i.e. 24th day of August, 2006. After the initial period of 3 yeas a fresh lease deed will be executed. 4.6 It has been submitted by the Ld. A.R. that on expiry of this agreement the assessee has neither extended lease with the same party nor has given it on lease to any other party thereafter. 4.7 Ld. A.R. has submitted that commercial property was subjected to lease temporarily due to shifting of branch office to Mayar Tower, Yamuna Marg, Delhi. It has been categorically recorded by Ld. CIT(A) that the property is a commercial property and the assessee has not closed down its business activities pertaining to printing press. Ld. A.R. has relied upon the decision of coordinate bench of this Tribunal in I.T.A.No. 337/RJT/2013 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom his business. Whether he uses that commercial asset himself for lets it out to somebody else to be used. The asset would not cease to be commercial asset simply because temporarily it was put out of use or it was let out to another person for his use. 5.4 The Coordinate Bench of Rajkot Tribunal in I.T.A.No. 337/Rjt/2003 and C.O. No.3/Rjt/2004, in case of ITO Vs M/s. Ultravision Associates has held as under: If we apply the tests laid down by the Supreme Court in Universal Plast Ltd.'s case (supra), to the facts of the present case, we find that all the assets of the business were not rented out by the assesseecompany. It was doing the main business of manufactures, imports, purchases and dealing In scientific apparatus, chemicals, chemical products, articles of glass, metal, wood, paper etc., more or less connected with science, as given in clause 3(a) of the Memorandum of Association. Out of the three properties in Mumbai, the property in dispute was being used for its Regional Office. In the interest of the company, it decided to let out one of its properties, to the City Bank, by way of exploitation of business assets, for making profit. The assets were let out, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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