TMI Blog2016 (1) TMI 890X X X X Extracts X X X X X X X X Extracts X X X X ..... taken by the Income Tax Officer is unsustainable in law. Moreover, the view taken by the AO is now well supported by the decision of the Hon’ble Supreme Court taken in the case of Chennai Properties & Investment Ltd [2015 (5) TMI 46 - SUPREME COURT]. Thus, even if the revised return have been completely ignored by the AO that would only make the assessment order erroneous but by any stretch of imagination, it cannot be said to be prejudicial to the interest of the Revenue in the light of the ratio laid down by the Hon’ble Supreme Court in the case of Chennai Properties & Investment Ltd (supra). Thus we do not find any merit in the assumption of jurisdiction by the Commissioner u/s. 263 of the Act. We, therefore, set aside the order of the CIT and restore that of the AO made u/s. 143(3) of the Act. - Decided in favour of assessee. - I.TA No.6216/Mum/2013, I.TA No.2775/Mum/2014 - - - Dated:- 4-11-2015 - SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER For The Appellant : Shri Firoz Andhyarujina For The Respondent : Shri A.K.Srivastava ORDER PER N.K. BILLAIYA, AM: These appeals by the assessee are preferred against two separ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y success. 5. Before us, the Ld. Counsel for the assessee vehemently submitted that this issue has been elaborately discussed and decided by the Hon ble Supreme Court in the case of Chennai Properties Investments Ltd Vs CIT 373 ITR 0673. It is the say of the Ld. Counsel that in this case the Hon ble Supreme Court has held that deciding factor is not ownership of land or leases but nature of activity of assessee and nature of operations in relation to them. The Hon ble Supreme Court highlighted and stressed that objects of the company must also be kept in view to interpret the activities. The Ld. Counsel concluded that in that case letting of properties is infact is business of the assessee therefore the income was taxed under the head Income from business . The Ld. Counsel referred to the main object clause of the Memorandum of Association and pointed out that in the case in hand, the main object is to acquire properties, develop the same and give them on rent. Therefore, the income should be taxed under the head Profits and Gains of Business . 6. Per contra, the Ld. Departmental Representative supported the findings of the AO. 7. We have carefully perused the orders o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of the details/documents, the AO has taken a view which is a possible view and accordingly taxed the income under the head business income . It was requested to drop revision proceedings u/s. 263 as the order passed by the AO was neither erroneous nor prejudicial to the interest of the Revenue. 11.3. The claim of the assessee did not find any favour with the CIT who proceeded by invoking the power conferred upon him by the provisions of Sec. 263 of the Act and directed the AO to frame fresh assessment order denovo in accordance with provisions of law after giving reasonable opportunity of hearing to the assessee. 12. Aggrieved by this, the assessee is before us. 13. The Ld. Counsel for the assessee reiterated what has been submitted before the CIT. It is the say of the Ld. Counsel that vide notice u/s. 142(1) of the Act, the AO called for every related information which were duly complied by filing necessary documentary evidences and after examining the same, the AO made the assessment order u/s. 143(3) of the Act. 14. Per contra, the Ld. Departmental Representative strongly supported the order of the CIT. It is the say of the Ld. DR that the AO has compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iation was claimed. It is also alleged that no details have been brought on record to show that there was composite rental agreement and the AO failed to examine that in the previous year assessment has been completed by treating rental income as Income from House property and not as business income. 16.1. Let us now examine these allegations in the light of the query raised vide notice issued u/s. 142(1) of the Act. By Q. No. 1, the assessee was asked to file copy of lease agreement and explain why the rental income should not be assessed as income under the head Income from House property . Q.4. `Copy of purchase deed of immoveable properties purchased during the previous year relevant to assessment year 2008-09 and 2009-10. Q.8. Copy of original and revised return filed alongwith copy of P L account, balance sheet, auditor s report from A.Yrs 2008-09 2010-11. Q.9. Purpose of transferring fixed assets to stock and stating whether such transfer attracts the provisions of capital gain? Q.13. Produce bank statement for the period from 1.4.2007 to 31.3.2009. 16.2. A detailed reply was filed on 9.8.2011 by which the assessee extensively explained why the rental ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
