Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (10) TMI 895 - ITAT KOLKATAIncome from the lodging house - Nature of income - business income or house property - Held that:- The license granted by the Magistrate, Lodging House Fund clearly shows that for carrying on the business of letting out the property to be used as Holiday Home or lodge, such license was granted. The agreements referred to above also clearly show that with such stipulation only the property was let out to different organisations. Further is not a case of mere letting out the property on a rent, but the assessee also provided watch and ward, furniture and fixtures and other services. All these facts unmistakeably show the intention of the assessee that he was making use of the property for business or commercial purpose. It is worth to note that in Sultan Bros. Pvt. Ltd. –vs. – CIT (1963 (12) TMI 4 - SUPREME Court) observed that whether a particular letting is business has to be decided in the circumstances of each case, and each case has to be looked at from a businessmen’s point of view to find out whether the letting was the doing of a business or the exploitation of his property by an owner. Revenue could not produce the document, which they are relying upon and at the same time they are unable to demonistrate how and where the learned CIT was wrong. Viewing from any angle we do not find any error in the finding of the learned CIT that the income from Bani Bhawan Puri constitutes business income and not income from house property. We, therefore, uphold the finding of learned CIT and answer the issue in favour of the assessee. Undisclosed or unexplained investment or income - Held that:- Merely because the documents recovered from the premises of assessee in the survey conducted on 18.902.2003 indicate that there was undisclosed turnover of ₹ 91,65,486/- as per learned AO or ₹ 1,00,79,633/- as per learned CIT, the entire turnover amount cannot treated as the undisclosed income or investment, without having regard to the facts and figures surrounding the business of the assessee. While assessing the income of the assessee, should have had to the common course of natural elements, and public and private business in relation to facts and figures obtained in a particular case. AO did not consider this aspect and the learned CIT having gone through the details relating to the purchases sales and payments in respect of the business of the assessee reached a conclusion that the total turnover was accumulated through a periodic cycling of the sales amount to purchases and it generally takes three months for each cycle to complete. This finding of the learned CIT is in conformity with the initial plea of the assessee that the funds were being rotated at least four times during the year. Enhancing the Gross Profit Ratio from 10.36% to 11.55% - Held that:- CIT has considered the Gross Profit Ratio rate by working the formula, i.e. Gross Profit Ratio on sales X 100/100-GP on sales. By working out like this he arrived at 11.55% of Gross Profit Ratio on the total turnover of ₹ 1,00,79,633/-. By calculating the G.P. in that method and adding such amount to the undisclosed amount of ₹ 25,19,908/-, learned CIT reached the amount to be added back at ₹ 39,44,106/-. By doing so, the learned CIT granted relief to a tune of ₹ 52,21,380/-. We are at loss to understand where exactly the ld. CIT erred in this process. The reasoning adopted by the learned CIT is scientific and the findings reached by him are impeccable.
|