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2016 (7) TMI 459 - ITAT MUMBAI

2016 (7) TMI 459 - ITAT MUMBAI - TMI - Business Services Charges for providing Business Service Centre - income from house property or Business Income - Held that:- There is no material to establish that the fact-situation in other assessment years brought out by the assessee is any way different from the instant assessment year. Quite clearly, the Assessing Officer has erroneously treated the income from business service centre as income from house property without bringing on record any fact o .....

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n conformity with his stand for the other assessment years. Thus, assessee succeeds on this aspect of the controversy. - Decided in favour of assessee - Disallowance u/s 14A - Held that:- The case set-up by the assessee is based on the provisions of section 14A(2) of the Act, which requires the Assessing Officer to record a satisfaction about the correctness of the claim by the assessee before proceeding to disallow any expenditure, which according to him has been incurred in relation to ear .....

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o. As a consequence, we set-aside the order of the CIT(A) and direct the Assessing Officer to retain the disallowance made by the assessee in his return of income and delete the balance. - Decided partly in favour of assessee - ITA No. 6651/MUM/2013, ITA No. 4633/MUM/2014 - Dated:- 30-6-2016 - Shri G. S. Pannu, Accountant Member And Shri Sanjay Garg, Judicial Member For the Appellant : Shri K.Shivram For the Respondent : Shri Prakash Patnade ORDER Per G. S. Pannu, A. M The captioned appeals of t .....

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ed in confirming the order of learned Assessing Officer treating Business Services Charges received of ₹ 2,52,55,504/- as income from House Property without appreciating that Assessee is in the business of providing Business Service Centre and Business Service Charges are consistently assessed as Business Income and hence Business Service Charges received may be treated as income from Business and Profession u/s 28 of the Income Tax Act. 2. The learned CIT(A) erred in disallowing ₹ 1 .....

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he Appellant craves leave to add, amend, alter or delete any or all the above grounds of appeal. 3. The appellant is a company incorporated under the provisions of the Companies Act, 1956 and is, inter-alia, engaged in the business of providing composite business infrastructure facility as a business centre services. The substantive dispute in this year pertains to assessability of income earned by the assessee for providing business centre facilities. In its return of income, assessee disclosed .....

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me from house property , whereas in the past as well as in the subsequent years, such income stands duly accepted as income from business and profession . Apart therefrom, reference has also been made to the written explanation furnished before lower authorities, copies of which have been placed in the Paper Book at Pages 39 to 43, in order to justify that the income is earned for providing composite business centre service facilities and not merely for letting out of the premises. The Ld. Repre .....

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rendered by the assessee. 4. On the other hand, Ld. Departmental Representative has pointed out that the Assessing Officer has analyzed the activities being carried out by the assessee and because the income is derived from exploitation of property, the same was liable to be assessed as income from house property. 5. We have carefully considered the rival submissions. Factually speaking, the discussion in the orders of the authorities below as well as the material on record reveals that assessee .....

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over fifteen years. It was also asserted by the assessee that the management, maintenance and provision of facilities of the business centre and the physical control of the premises vests in the Administrative Manager, who is an employee of the assessee company. Based on the manner in which such services are rendered, assessee had set-up a plea that there was difference between letting out of house property and the running of commercial business centre. The relevant discussion in the orders of .....

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ure and manner in which activities have been carried out by the assessee. Moreover, even on the principles of consistency, we find that the assessee is justified in asserting that the impugned income is liable to be treated as income from business . In the Paper Book, assessee has furnished assessment order passed under section 143(3) of the Act for assessment year 2012-13 dated 9/1/2015, wherein such income has been assessed as income from business . Similar is the situation in assessments made .....

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m the stand in other years. 5.1 In our considered opinion, there is no material to establish that the fact-situation in other assessment years brought out by the assessee is any way different from the instant assessment year. Quite clearly, the Assessing Officer has erroneously treated the income from business service centre as income from house property without bringing on record any fact or law situation, which was inconsistent from the other years. Even before us, no cogent change in facts or .....

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ntroversy. 6. The only other issue remaining is with regard to the disallowance made under section 14A of the Act. In this context, brief facts are that assessee company was found to have earned dividend income of ₹ 31,01,182/-, which was exempt from tax. In its return of income assessee had disallowed a sum of ₹ 7,93,306/- being interest expenditure, which was relatable to earning of such exempt income in terms of section 14A of the Act . The Assessing Officer , however, increased t .....

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by the assessee is that the Assessing Officer has enhanced the disallowance without recording any satisfaction as to how the disallowance computed by the asessee was unreasonable or unjustified. 6.2 The Ld. Departmental Representative for the Revenue has only relied on the order of the Assessing Officer in support of the case of the Revenue. 6.3 We have carefully considered the rival submissions. Quite clearly, the case set-up by the assessee is based on the provisions of section 14A(2) of the A .....

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