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2016 (2) TMI 234 - ITAT CHENNAI

2016 (2) TMI 234 - ITAT CHENNAI - TMI - Addition under the head income from other sources as against income from business - CIT(A) with reference to the lease agreement and clauses thereon and held that Assessing Officer had correctly assessed the income from letting out of godowns for commercial space under the head ‘income from house property’ - Held that:- The appellant is not engaged in the business of leasing properties i.e. taking the properties on lease and again sub-leasing properties to .....

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case of Chennai Properties & Investments [2003 (3) TMI 28 - MADRAS High Court] and Shambu Investments [2003 (1) TMI 99 - SUPREME Court]. It is to be mentioned here that the various expenses claimed by the appellant in the P & L account are not laid out for purpose of earning the rental income. The various expenses claimed in the P & L account are in no way connected with the earning the rental income. Therefore, the considered view that the AO had correctly assessed the income from letting out t .....

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s)-15, Chennai dated 27.02.2015 for the assessment year 2011-12. 2. The first issue in the appeal of the assessee is that Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of ₹ 2,18,400/- under the head income from other sources as against income from business. 3. Brief facts are that the Assessing Officer in the course of assessment proceedings required the assessee to produce ledger account of sales and details of business activities carried on, as the asse .....

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e assessee could not substantiate the claim of conduct of business activity in the year under consideration. It is also the observation of the Assessing Officer that bank account reveals that credits are only rental receipts received regularly every month and debits are towards water charges and vehicle loans. On appeal, the Commissioner of Income Tax (Appeals) sustained the addition against which the assessee is in appeal. 4. Counsel for the assessee reiterates the submissions made before the l .....

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under:- 5.1.2 I have considered the submissions of the AR of the appellant and also findings of the AO carefully. The claims made by the appellant that it has carried out business activity relating to sale of tannery chemicals like wattle bark, sodium chloride were not substantiated by producing the bills and vouchers for the services rendered. In the P&L account, the appellant claimed huge expenses without furnishing basic evidences in support of its claim. Even before the undersigned, the .....

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om other sources. The ninth ground of appeal filed by the appellant to allow the proportionate expenses relating to earning of income of ₹ 2,18,000/- is also not accepted as the AR of the appellant could not establish the nature of the income earned by the appellant to the extent of ₹ 2,18,000/- and also could not prove the necessity of making expenditure in the absence of the documentary evidence about the nature of income earned by the appellant. The AR of the appellant also could .....

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eal relating to this issue is rejected. . 7. On going through the order of the Commissioner of Income Tax (Appeals) , we do not find any infirmity in holding that the receipts should be assessed under the head income from other sources. Thus, we affirm the order of the Commissioner of Income Tax (Appeals) and reject the grounds raised by the assessee on this issue. 8. The next issue in the appeal of the assessee is that the Commissioner of Income Tax (Appeals) erred in sustaining the order of th .....

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house property. On appeal, the Commissioner of Income Tax (Appeals) sustained the action of the Assessing Officer in treating the rental income as income from house property as against the claim of the assessee under the head business. 10. Counsel for the assessee submits that the lower authorities erred in ignoring the fact that letting of part of the business premises for rental purposes had been only a stopgap arrangement till better days return to leather industry. He submits that atmospher .....

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presentative submits that in the accounting year 2007-08 onwards the factory was let out on year to year basis. The Departmental Representative supports the orders of lower authorities. 12. Heard both sides. Perused orders of lower authorities. This aspect of the matter has been considered by the Commissioner of Income Tax (Appeals) with reference to the lease agreement and clauses thereon and held that Assessing Officer had correctly assessed the income from letting out of godowns for commercia .....

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ent relate to lease of the building and parcel of the land for a monthly rent of ₹ 46,000/- and all the expenditures related for the maintenance of the godown was to be borne by lessee only at their own cost. The lessee is only responsible for maintenance of the goods at the godown premises which was taken on lease from the appellant for a fixed period. The appellant is in no way concerned with maintenance of the godown and also upkeep of the goods kept in the godown. The lessee is respons .....

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