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ACIT, Circle-32 (1) , New Delhi. Versus Ajay Kalia and Vica-Versa

Lease rentals - falling under the head ‘Income from other sources’ OR ‘Income from house property’ - Held that:- As, admittedly, the assessee earned rental income from letting out of building, furniture & fixtures and electrical installations in a composite manner which are inseparable from each other, such income specifically falls under the head ‘Income from other sources’ and is liable to be taxed accordingly. The Hon’ble Supreme Court in a celebrated decision in Sultan Brothers (P) Ltd. vs. .....

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income was assessed under the head ‘Income from house property’, we find no force in the same as admittedly there can be no estoppel against the statute. When section 56(2)(iii) specifically provides for treating such income as falling under the head ‘Income from other sources’, there is no rationale in treating it as `Income from house property’ simply on the ground that in the earlier years such income has been wrongly taxed under section 22 of the Act. There is no res judicata in so far as th .....

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t of the order passed by the CIT(A) on 7.10.2013 in relation to the assessment year 2010-11. 2. In so far as the appeal by the Revenue is concerned, the ld. AR submitted that pursuant to the mandate of section 268A, the CBDT has issued Circular No. 21 of 2015 dated 10.12.2015 with retrospective effect, revising the monetary limit to ₹ 10,00,000/- for not filing appeals before the Tribunal. He further submitted that as the tax effect involved in the instant Departmental appeal is less than .....

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tax effect is less than ₹ 10,00,000/-. Going by the prescription of the aforenoted Circular, we are of the view that the Revenue should have either not filed the instant appeal before the Tribunal or withdrawn the same as the tax effect in this appeal is admittedly less than the prescribed limit for not filing the appeals. Ex conseqeunti we dismiss the instant appeal without going into merits of the case. 4. In the result, the appeal of the Revenue stands dismissed. 5. Insofar as the Cross .....

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CO is different from the one raised in the Revenue s appeal. 6. We have heard the rival submissions and perused the relevant material on record. Before embarking upon the question of the maintainability or otherwise of the Cross objection filed by the assessee pursuant to the Revenue s appeal, which involves tax effect of less than ₹ 10 lac and has been dismissed supra, we need to concentrate on the prescription of section 253(4) which empowers the respondent to file cross objection, the .....

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ed manner, against any part of the order of …. the Commissioner (Appeals), and such memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within the time specified in sub-section (3) or sub-section (3A). 7. A bare perusal of the above provision transpires that the AO or the assessee (hereinafter referred to as the other side ), on receipt of notice of an appeal having been preferred by the appealing party against the order passed by the CIT(A), notwit .....

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der passed by the CIT(A) and the other possibility can be of filing CO against the issues decided against it in the impugned order. There can be still one more possibility when the other side, apart from supporting the impugned order appealed against, may also assail certain other issues decided against it. This divulges that the CO can be filed by the other side, on receipt of notice of appeal having been filed by the appealing party, on any issue de hors the issued raised by the appealing part .....

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y to such appeal. This shows that a cross objection is treated in no way different from a separate appeal by the tribunal. 8. The language of section 253(4) makes it abundantly vivid that the scope of a Cross objection is not restricted only to the points decided against the appealing party, but, also extends to the points decided against the other side. The mandate of the provision is quite vast and is unlike the prescription of rule 27 of the ITAT Rules, which is limited in its realm empowerin .....

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ere the cross objection is in support of the impugned order, then, of course, such a cross objection has no independent existence and is liable to be dismissed as infructuous pursuant to the dismissal of the appeal of the Revenue. However, in a case where the cross objection filed u/s 253(4) is on an issue independent of the appeal filed by the Revenue, then, such a cross objection cannot be dismissed simply on the ground of dismissal of the appeal by the Revenue involving low tax effect. Accept .....

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the head Income from other sources as against Income from house property declared by the assessee. 11. Briefly stated, the facts apropos this issue are that the assessee let out its building along with furniture & fixtures and electrical installations and offered the rental income so received under the head Income from house property. The AO held such income to be chargeable to tax under the head Income from other sources , which view came to be echoed in the first appeal. The assessee is ag .....

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idering such rental income either under the head Income from house property or Income from other sources. 13. Section 22 of the Act provides that the annual value of the property consisting of any building or land appurtenant thereto of which the assessee is the owner, other than such portions of such property as he may occupy for the purposes of any business or profession carried on by him, shall be chargeable to income-tax under the head Income from house property. The essence of section 22 is .....

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s which are chargeable to tax under the head Income from other sources. Clause (iii) of sub-section (2) of section 56, which is relevant for our purpose, reads as under : - where an assessee lets on hire machinery, plant or furniture belonging to him and also buildings, and the letting of the buildings is inseparable from the letting of the said machinery, plant or furniture, the income from such letting, if it is not chargeable to income-tax under the head "Profits and gains of business or .....

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