TMI Blog2006 (5) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... . 205 to 210/Chandi/2004, for the assessment years 1993-94 to 1998-99. The appellant has also framed similar substantial question of law by filing separate appeals for separate assessment years. The facts are being taken from I. T. A. No. 16 of 2005. The substantial question of law sought to be raised are as under: "(i) (a) That whether, under the facts and circumstances of the case, the assessing authority is justified in taking the action under section 148 and making the reassessment by changing the head of the income from business income to rental income based on the change of opinion and without bringing any material or evidence to justify the issue of notice under section 148 and there being interpretation of law and hence the procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,73,894 as rental income in the reassessment proceedings against the business income claimed by the appellant and having assessed as such for all the impugned years thereby disallowing the expenditure of Rs.1,27,020." 2 The assessee filed its return of income on September 16, 1993, declaring an income of Rs. 26,400 which was later on revised on January 18, 1994, declaring the income at Rs. 4,800 only. Though, the assessee derived the income of Rs. 1,73,894 from renting out building and machinery against which it claimed expenditure of Rs. 1,27,020 including remuneration paid to partners but the same was being shown as income from business. Since in the opinion of the Assessing Officer income chargeable to tax had escaped assessment, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne 18, 2004. While accepting the appeal, the Tribunal recorded the following findings in paragraph 6 of the order; "6. We have heard the rival submissions, perused the orders of the tax authorities and gone through the material available on record as well as case law and the earlier order of the Tribunal in the case of the assessee. Whereas the assessee has relied on order of the Tribunal, the learned Departmental Representative has subsequently raised a point as to the intention of the assessee of enjoying income in the form of rental only and not as business income. We find that facts in the assessment years 1980-81 to 1983-84 were somewhat different as the assessee had claimed its closure of business only some time ago and there could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ostdifferent circumstances. We, therefore, restore the orders of theAssessing Officer in this regard and cancel that of the Commissionerof Income-tax (Appeals)." 6 Learned counsel for the assessee reiterated submissions which were made before the authorities to the effect that the issue in the present case already stood settled by the earlier order of the Tribunal passed in favour of the assessee and there being no change in the facts and in the circumstances, the same should have been followed by the Tribunal and further that the closure of the business was temporary and the assessee still had the intention to restart the same. Both these issues have been dealt with in detailed by the Tribunal. While deciding the appeals for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rawn on the basis of facts found no objection can be taken. Keeping in view the finding of facts recorded by the Tribunal that there was intention to restart business by the assessee in the above referred case, the income from letting of the machinery on hiring for a temporary period was held to be income from the business. 10 However, in the facts and circumstances of the case in hand, as found by the Tribunal, it is clear that the intention of the assessee was not to restart business which was closed about 17 years back. Closure of the business ended ultimately with the sale of land, etc. 11 Inthe case of CIT v. G. V. Rattaiah and Co. [2002] 256 ITR 351, the Andhra Pradesh High Court, while answering the questions referred to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing let out for the purpose of enjoying rent The distinction between the two being narrow, the same would depend on the peculiar facts of each case; it was further argued by him that in this case, the Tribunal has not recorded any finding that the premises were not let out for being exploited commercially and, therefore, a question of law does arise from the order of the Tribunal. It is true that the Tribunal has not recorded any positive finding on this point but while dismissing the appeal, it has upheld the finding recorded by the first appellate authority that the let out premises were leased out for the commercial purpose with a motive to reduce the burden of expenditure and to reduce the loss. It would have been better if the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X
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