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TMI Blog2015 (4) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... d has raised the following grounds;- 1. That whole of assessment proceedings and the assessment order passed thereby are wrong and bad in law as the same are not based on any valid notice issued and served upon the appellant u/s 143(2) of the I. T. Act, 1961 (the Act) within time limit stipulated in amended Proviso to Section 143(2) (ii) of the Act. Hon'ble CIT (A) has erred in rejecting this ground of the appellant's appeal and in sustaining the validity of the Assessment Order passed without valid service of notice u/s 143(2) of the Act within the stipulated time limit. 2. That Hon'ble CIT (A) has erred in sustaining the treatment of rental income earned by the appellant by giving counters/spaces/shops in 'Retail Mall' as "Income from House Property" instead of "Profits & Gains of Business". 3. That Hon'ble CIT (A) has erred in upholding the disallowance of deduction of various expenses such as electricity charges, depreciation, general expenses, legal & professional fees, repairs & maintenance, salary, bank charges and partners' interest debited in trading & profit & loss account totaling to Rs. 20,15,236/- after treating rental income as "Income f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We have heard the rival submissions and perused the material on record. We find that before us Assessee has taken an additional ground with respect to non allowing the set of brought forward business loss against the income assessed under other head. The aforesaid ground, as admitted by the Assessee, was not taken before ld. CIT(A). Considering the submissions made by the Assessee, we are of the view that it deals with the legal right of the Assessee and therefore the same is admitted. Before us, Ld AR submitted that he did not want to press ground no. 1 and therefore the ground is dismissed. Ground No. 2, 3 & 4 are interconnected and therefore considered together. 7. During the course of assessment proceedings, A.O on perusing the Balance sheet and the Profit and Loss account noticed that Assessee had not done any business during the year and the only income was from the rent receipt from the property given on rent. On further perusing the Profit and Loss account he noticed that Assessee had shown opening stock, closing stock, sales receipts, expenses on various heads. He also noticed that the closing stock of Rs. 1,25,36,346/- as appearing on 31st March, 2007 was not appearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o earn profit from sale of the units of the project and the premises concerned was a complex and running of the same as a retail mall is commercial activity and, all the expenses were incurred in carrying out the said business. It is further submitted that the appellant's intention was to exploit the said business asset of 'Picnic Retail Mall' and earning of rental income. I find that the above arguments were also taken up before the Assessing Officer who has duly considered the same in paras 5 to 9 of the order. I also find that the appellant himself, in the statement of facts filed along with Form No. 35, has submitted that the project was not successful and could not be sold, and since he could not receive any booking for the same, he started giving the counters/spaces and shops to various persons on rental basis. This self admitted fact itself indicates that the activity of giving counters/spaces and shops was never taken up as a business venture , but to earn rent, as there was no booking for sale of shops/counters/spaces. I, therefore, do not find any reason to deviate from the finding given in the order on this issue and confirm the action of the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO vs. M.M. Textiles (2010) 122 ITD 435. Bombay Tribunal decision in the case of Sane & Doshi Enterprises vs. ACIT ITA No. 6532/Mum/2010 order dated 16.05.2012. He therefore submitted that the AO has wrongly considered the income to be from house property and the assessee was right in claiming the income as business income. Ld. DR on the other hand pointed to the findings of AO and CIT(A) and supported their orders. 10.We have heard the rival submissions and perused the material on record. The issue in the present case is as to whether the income earned from letting out of counters, spaces is to be considered as "business income" or "Income from house property". We find that ld. CIT(A) after considering the detailed submissions of the Assessee has reached to a conclusion that the activity of giving counters/spaces/shops was never taken up as a business venture but was to earn rent. With respect to the allowability of interest paid to partners as interest allowable u/s. 24(b), we find that ld. CIT(A) has noted that interest allowable u/s. 24(b) cannot be equated with interest allowable u/s. 36(1)(iii) of the Act. Before us, ld. A.R. has relied on the decision in the case of CIT vs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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