TMI Blog2015 (4) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... urt of fact has recorded a specific finding in favour of assessee and in the absence of anything to show that the same is perverse or contrary to record or based on misreading, we do not find any reason to take a different view.Tribunal was justified in law in holding that the assessee firm is entitled to registration. - Decided in favour of assessee. - Income Tax Appeal No. - 101 of 1999 - - - Dated:- 10-3-2015 - Hon'ble Sudhir Agarwal And Hon'ble Shashi Kant,JJ. For the Appellant : A.N. Mahajan,A. Kumar,B. Agarwal,B.J. Agrawal,G. Krishna,P. Krishna,S. Choopra For the Respondent : R.S. Agrawal ORDER 1. Heard Sri Dhananjay Awasthi, learned counsel for appellants and Sri R.S. Agrawal, learned counsel for respondent. 2. Following substantial questions of law have arisen in this appeal : (i) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in law in holding that a genuine firm was in existence without appreciating the facts that the same property belonging to husbands was surreptitiously transferred to their wives through the camouflage of a firm to evade tax. (ii) Whether on the facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial utility' c)To purchase, take on leave or in exchange hire or otherwise acquire and hold either absolutely or conditionally and either alone or jointly with others any estate or interest in any land, building, theatre, hotels, works, undertakings, rights, privileges and in real or personal property of any kind and to carry on any other business or business allied or incidental to the aforesaid business; 7. From the facts as borne out from record, it appeared that property known as Auto Sales Building, was the business assets of M/s. Auto Sales. This firm was dissolved on 31.10.1978. The firm property situated at 18- P.D. Tandon Road, Allahabad was alloted to Sri Brij Mohan Gupta and Sri Anil Gupta having 1/3 share each. The income from house-property situated at 18-P.D. Tandon Road, Allahabad belongs to Sri B.M. Gupta and Sri Anil Gupta. Thereafter, firm M/s. Auto Sales Property was constituted consisting of three partners. The property owned by Sri B.M. Gupta and Anil Gupta was let out to the above firm on a rent of ₹ 48,000/- per annum. The annual rent receivable from various tenants in the aforesaid property was ₹ 90,180/-. The Assessing Officer observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tever nomenclature, lease amount, rents license fee) received by an assessee from leasing or letting out of assets would fall under the head ' Profits and Gains of business or profession; It is a mixed question of law and fact and has to be determined from the point of view of a businessman in that business on the facts and in the circumstances of each case including true interpretation of the agreement under which the assets are let out; 13. In Sultan Brothers Private Ltd. v. Commissioner of Income Tax, Bombay, [1964] 51 ITR, 353 (SC), the assessee constructed a building fitted it up with furniture and fixtures and let it out on lease fully equipped and furnished for the purpose of running a hotel at a monthly rent of ₹ 5,950/- and monthly hire of ₹ 5000/-. Considering the aforesaid facts, it would be an income from business. The Court said that the object of asesseee was to acquire land and buildings and after investments either sell or let them out. It was held that whether a particular letting is business activity or otherwise has to be decided in the circumstances of the each case; the determination would be from the perspective of the businessman. A com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has cancelled registration of firm on the ground that firm had no existence in reality and was not carrying on business, specified in the Deed of Partnership, though, a genuine firm was in existence, and it was engaged in business activities in accordance with the partnership deed. Revelant findings recorded by Tribunal in para-7, read as follows : On the other hand, it is found that a genuine firm was in existence and it was engaged in the business activities in accordance with the partnership deed. The documents filed by the assessee amply support such a finding. The mere fact that the property taken on lease by the firm belonged to the relative of the partners will not render the firm non-genuine . 20. It is well settled law that the Tribunal being the final fact finding authority, its decision can be successfully assailed by the High Court only, if it is palpably perverse. 21. In K. Ravindranathan Nair v. Commissioner of Income Tax, [2001] (1) SCC 135, perversity has been explained as indicative of an action, opinion or conclusion which could not reasonably be arrived at. Even an incorrect conclusion would be perverse or mala-fide only if it is patently deliberate. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In Thayyil Enterprises v. ITO (Supra), looking to the concurrent findings recorded by Income Tax Authorities confirmed by Tribunal, the Court on the facts found that the assessee himself did not claim rental income as business income and conceded the same as income from house property. This is evident from para-2 of the judgment which reads as under : The petitioners itself had not made any such claim by returning the income in the returns filed ; on the other hand, petitioners itself conceded income from house property under the specific head of 'Income' provided for under the Income Tax Act for the assessment of rental income. 30. Similarly, in Keyaram Hotels (P.) Ltd. v. ACIT (Supra), the Court found that the assessee failed to place any material to support the case that property from which income has been derived was used as a business property and exploitation of property was in the nature of business of the assessee company. This is evident from the observations made para-6 of the judgment which reads as under : Before the authorities under the Act as well as the Tribunal, the assessee has not placed any materials to support the case that the property ..... X X X X Extracts X X X X X X X X Extracts X X X X
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