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2015 (6) TMI 718 - AT - Income TaxRevision u/s 263 - CIT directing the A.O. to examine the issue that the lease rental incomes from shops/retail space owned by Ambience Hotels & Resorts Ltd. should not be assessed in the assessee’s hands but in the hands of Ambience Hotels & Resorts Ltd.- Held that:- It is now a established proposition of law that for invocation of the provisions laid down under sec. 263 of the Act, both the ingredients i.e. firstly the assessment order must be erroneous and secondly it must be prejudicial to the interest of revenue are to be examined. It appears from the assessment orders that taxability of ₹ 6,27,84,240 in the proper hand in view of the provisions of section 60 of the Income-tax Act, 1961 as well as Section 53A of the Transfer of the Property Act, has not been examined by the Assessing Officer as the issue was linked to both the assessees as it was to be taxed in one hand and effect thereof was to be given in the other hand. Thus, it can be said that in absence of examination/inquiry of the above aspect the assessment orders are erroneous as well as prejudicial to the interest of Revenue. When the learned CIT was setting aside the matter to the file of the A.O. for framing the assessment orders afresh as per the law after examining/making inquiry on the issue, he was not justified and a contradiction in his stand in directing the Assessing Officer to tax the lease income in the hands of the Ambience Hotel & Resorts and reduce the same from Ambience Developer & Infrastructure Pvt., especially when keeping in view the peculiar facts and circumstances of the case and in absence of examination/making inquiry by the A.O., it was a debatable issue as to in whose hand and under what head the lease income is to be taxed. The above findings of Learned CIT typed in bold to tax the lease income in the hands of M/s. Ambience Hotel & Resorts Ltd., and direction to the Assessing Officer to reduce the same income from M/s. Ambience Developers & Infra-structure (P) Ltd. are thus held invalid and are modified by deleting the same. - Decided partly in favour of assesse
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