TMI Blog2012 (4) TMI 467X X X X Extracts X X X X X X X X Extracts X X X X ..... e same as income from business and not income from house property – in favour of assessee. - IT Appeal No.490 (CTK.) of 2011 - - - Dated:- 13-4-2012 - K.K. Gupta, J. ORDER 1. This appeal by the assessee is on the solitary issue with respect to generation of income from a market complex constructed for the purpose of exploiting it commercially and returned as income from business has been held to be income from house property for computation by the Assessing Officer and has been confirmed by the learned CIT(A). 2. The brief facts relating to the issue in dispute are that the assessee filed its return for the impugned Assessment Year declaring loss of Rs. 13,243 being the residual amount of lease rent received by the assessee from various commercial organizations after incurring expenditure for the common area and other security and services extended being incurred for running the market complex. The claim of interest paid to the bank on the term loan utilised for the purpose of construction of the building was on other partners which was negated by the Assessing Officer by following the decision of Hon'ble Apex Court in the case of National Storage Pvt. Ltd. v. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for such expenses separately. Therefore income received is by exploiting the immovable property of the partners by way of complex commercial activities is complex one and should have been assessed as income from Business. The Assessee has been filing its return of income since 1994 offering the entire income from the market complex as income from Business. The department has been accepting the same without any objection. Unfortunately during this year the department changed its view and assessed the entire income as income from House property without any justifiable ground. Here the AO has acted mechanically without applying his mind to the earlier facts and circumstances. Since principles of consistency are rule in general the department cannot depart from the earlier practice without any cogent reason or justifiable ground. The learned Counsel for the assessee argued that the authorities below have stuck to their stand inspite of the facts brought on record by themselves regarding the commercial exploitation of the property specially when the bank was prepared to grant term loan on the basis of repayment of loan by the partners was on the basis of the amount of business receipts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssured of repayment by carrying on the commercial activities. He pointed to the remand report submitted by the Assessing Officer to the learned CIT(A) has noted in his order that the construction was on the basis of a bank loan which the partners themselves had obtained or repaid was not the issue for consideration either before the AO leading to a finding that a super structure constructed was for the purpose of letting out to be rendered as income from house property. He also pointed out that the Department's appeal was dismissed by the Hon'ble Apex Court in the case of National Storage P. Ltd ( supra ) when the AO misdirected himself to hold that the said decision stood covered in favour of the Department on the basis of facts and circumstances which have been considered by him in his order. He submitted the copies of the sanctions obtained from the bank, municipal authorities and also the various receipts for charging the tenants for common area is more than the reimbursement allowed the lessees from carrying out commercial activities which under no circumstances can be a negative figure as computed by the Assessing Officer holding the receipts as income from house property. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned CIT(A) rather leans in favour of the assessee on the basis of facts and circumstances of the case as have been brought on record. It appears the endeavor of the taxing authorities to refuse the assessee's claim of rendering income from business activities by holding the annual letting out value subject to deduction under the provisions of Section 24(b). The Assessing Officer has rather misdirected himself to hold the case laws cited by him leaning in favour of the Department when actually the Department's appeal had been dismissed by the Hon'ble Apex Court on the finding as was that the partners pooled their resources for carrying on an adventure in the nature of trade and subjected to hiring out the complex. This particular venture or concern was considered taxable as business income was held by the Hon'ble Apex Court in the case of Sambhu Investment Pvt. v. CIT ( supra ). Here again the Hon'ble Apex Court distinguished the method of finding out the intention of the income whether being taxed as income from house property or commercial activities was misconstrued by the learned CIT(A) on extraneous circumstances that the assessee itself could not have utilised the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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