TMI Blog2012 (9) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the assessee, consequently, the character of such lease rent is business income, therefore, it was not income from other sources. Income from rent/rental - CIT(A)'s direction to AO that the income from rent/rental is to be taxed as income from house property - Held that:- the amount of Rs. 41,04,721/- was received by the assessee from letting out of buildings of the assessee which was claimed as such earning of such rental income is not the regular business of the assessee. Our view is fortified by the ratio of the decision in the case of Potdar Cements Private Limited and others; 226 ITR 625 and CIT vs. Dhoompalam Commercial Complex Industry Pvt. Ltd [2003 (1) TMI 52 - KARNATAKA HIGH COURT] therefore, the learned CIT(A) rightly d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the Revenue is in support to the assessment order whereas the learned counsel for the assessee defended the impugned order. 3. We have perused the record and considered the arguments advanced by the learned respective counsel. In the appeal of the Revenue, the facts, in brief, are that the assessee is a local authority established by Government of Madhya Pradesh, declared loss of Rs.1,89,44,531/- in its return on 31.10.2007. In response to the notices u/s 143(2) and 142(1) of the Act, the assessee attended the proceedings before the learned AO. The first ground raised is that on the facts and in the circumstances of the case, the learned CIT(A) erred in directing the AO to tax the lease rent amounting to Rs.83,86,485/- as bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority, consequently, we find no infirmity in the conclusion drawn by the learned first appellate authority. It is affirmed. 4. The next grievance of the Revenue is towards direction to the AO that the income from rent/rental amounting to Rs.41,04,721/- is to be taxed as income from house property. On perusal of record and after hearing the rival submissions, we find that during the relevant period, the amount of Rs. 41,04,721/- was received by the assessee from letting out of buildings of the assessee which was claimed as such. The claim of the assessee is that such rental receipt is out of the main business of the assessee. During first appellate stage, the relevant pages of the notification, issued by the Government of Madhya Prade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee under two sub-heads (a) interest of Rs. 20,83,262/-from deposits in the bank and (b) the amount of Rs. 90,46,614/- as interest from delayed payments (total Rs.1,11,29,876/-). 5.1 So far as the first receipt of Rs.20,83,262/- is concerned, the assessee executes various construction activities through various schemes like town development scheme, private and public partnership scheme, self financing scheme and self construction scheme, etc. and the surplus money out of these business receipts was deposited with the bank and interest was earned out of surplus money. The claim of the assessee is that such earning is out of the business activities of the assessee. However, we find that such surplus money deposited with the ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est income of Rs.20,83,262/- should have been treated as business income as the same was earned during regular course of business activities. For the reasons discussed hereinabove in para 5.1, wherein we have affirmed the stand of the learned CIT(A), there is no merit in this ground raised by assessee, therefore, dismissed. 8. The next ground raised in the cross objection is that the learned first appellate authority erred in not considering the income of Rs. 41,04,721/- as business income which was earned out of business activities but it was treated as income from rent. 8.1 For the reasons discussed hereinabove in para 4, this ground of the cross objection is dismissed. The cross objection of the assessee is dismissed. Finally, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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