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2016 (8) TMI 367 - ITAT MUMBAI

2016 (8) TMI 367 - ITAT MUMBAI - TMI - Taxability of income - deemed ownership - AO of treating ‘Income from House Property’ earned in respect of three different properties as ‘Income from Other Sources’ on the ground that the assessee is not the owner of the said properties but the tenant of the said property - Held that:- In the present case, the appellant has entered into lease agreements in respect of the concerned properties for a period of not less than 12 years. The appellant has furnishe .....

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-08. In view of the above said observations made by the CIT(A) in the assessee’s own case, the assessee’s income from the house property was found to be taxed under the head of income form house property. These findings were not challenged by the revenue meaning thereby the revenue has accepted this contention. No doubt in the said circumstances the income of the assessee is liable to be treated as under the head income from house property and accordingly the assessee would also to be entitled f .....

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CIT(A) ] relevant to the A.Y.2005-06 & 2006-07. Since the parties are the same and the matter of controversy is also Assessee by: Shri Pradip N. Kapasi Department by: Shri N.P.Singh same, therefore in the said circumstances these appeals are being taken up together for adjudication and for the sake of convenience. ITA NO.1706/Mum/2010 (2005-06):- 2. The assessee has raised the following ground of appeal:- 1. TREATMENT OF INCOME FROM HOUSE PROPERTY AS INCOME FROM OTHER SOURCES. (a) The CIT(A) .....

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9UA(f) as the said properties were taken on lease for more than 12 years and as such, the rental income from the said properties should be taxed as Income from House Property . (c) Your appellants pray that the income from the said properties of ₹ 5,04,000/- be charged under the head Income From House Property and 30% deduction u/s.24(a) be granted. 2. DISALLOWANCE OF EXPNESES OF ₹ 10,088/- AGAINST THE INTEREST INCOME OF ₹ 94,233/-. (a) The CIT(A) erred in law and on facts in c .....

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the expenses are incurred for earning such income for such business. (c) Your appellants pray that interest income be assessed as business income and expenditure of ₹ 10,088/- be allowed while computing business income. 3. SERIOUS VIOLATION OF NATURAL JUSTICE (a) The CIT(A) erred in law and on facts in confirming the order of assessment passed in gross violation of the provisions of natural justice in as much as he did not given any specific opportunity to prove that the appellant is the .....

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passed in violations of natural justice be quashed. 4. LEVY OF INTEREST U/S.234A, 234B AND 234C (a) The CIT(A) once again erred in law in confirming the levy of interest u/s.234A, 234B and 234C b incorrect calculations and further erred in levying interest without giving any opportunity of hearing and without passing any speaking order. (b) Your appellants deny any liability to payment of interest and without prejudice the interest charged suffered from errors in calculations and further submit .....

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t ). The case was selected for scrutiny assessment and notice u/s.143(2) of the Act dated 26.10.2006 was issued and served upon the assessee. Subsequently, notice u/s.142(1) of the Act was issued and served upon the assessee. The assessee was an individual and showed his income under the head house property, business and income from other sources. Business income has been claimed in the nature of money lending and financing business. Assessee has also earned interest on capital with partnership .....

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and no deduction u/s.24(a) of the Act was allowed. The assessee had also received the interest to the tune of ₹ 94,233 on account of money lending activities but the Assessing Officer was of the view that the assessee did not advance money but has earned interest income on money advanced in earlier years, therefore, the same was treated from money lending business and was treated as income from other sources. The above said finding of the Assessing Officer was challenged by the assessee b .....

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, therefore in view of the said circumstances the appeal is liable to be accepted in terms for order dated 03.01.2014 in the assessee s own case for the A.Y.2007-08. On the other hand the representative of the department has relied upon the order passed by the CIT(A) in question. Before discussing the matter of controversy we are of the view that it is necessary to advert the finding of the CIT(A) on this issue on record:- 8. I have heard the learned A.R. of the assessee. I have also gone throug .....

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rty. 8.1 As per provisions of section 22 of the Income Tax Act, 1961 the annual value of property consisting of any buildings or lands appurtenant thereto of which the assessee is the owner shall be chargeable to income under the head Income from house property . Hence, for any rent income to be taxable under the head Income from house property , the assessee needs to be the owner of the said property. Section 27 of the Act, defines the term Owner of house property and clause (iiib) of section 2 .....

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ts claim. On perusal of the documents placed on record, I observed that the assessee though not an owner of the property but is a deemed owner of the property in view of the provisions of section 27(iiib) r.w.s269UA(f) of the I.T.Act, 1961 as the assessee is holding the aforesaid properties on lease for a period of more than 12 years. 8.3 I also find that the judgment given by Mumbai ITAT in the case of DCIT Vs. D.B.S. Financial Services Limited strongly supports the contention of the appellant. .....

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fers to cl.(f) of s.269UA which applies to transfer of property by way of sale or exchange or lease for a term of not less than 12 years. In the present case the assessee acquired sub-lease in respect of Delhi property and lease in respect of Bangalore property for a period of not less than 12 years. Accordingly, the relevant provisions of IT Act referred to above will be applicable. The agreements executed between the assessee and the sub-lessees have been duly acted upon and the assessee is re .....

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appeal is, thus allowed. 4.1 The department has dealt the matter of controversy in the assessee s own case for the A.Y.2007-08. In view of the above said observations made by the CIT(A) in the assessee s own case, the assessee s income from the house property was found to be taxed under the head of income form house property. These findings were not challenged by the revenue meaning thereby the revenue has accepted this contention. No doubt in the said circumstances the income of the assessee i .....

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ame. 7. The assessee has raised the following ground of appeal:- 1. TREATMENT OF INCOME FROM HOUSE PROPERTY AS INCOME FROM OTHER SOURCES. (a) The CIT(A) erred in law and in facts in confirming the action of the learned AO of treating Income from House Property earned in respect of three different properties as Income from Other Sources on the ground that the assessee is not the owner of the said properties but the tenant of the said property and the income has derived from sub-letting the same t .....

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y . (c) Without prejudice to the above, your appellant submits that the property at Koyaji Chawl, Bhoiwada is fully owned by her whose proofs have been submitted and hence net rent thereof of ₹ 44,000 should be assessed as Income from House Property and standard deduction u/s.24(a) be allowed. (d) Your appellants pray that the income from the said properties of ₹ 4,06,000/- be charged under the head Income From House Property and 30% deduction u/s.24(a) be granted. 2. SERIOUS VIOLATI .....

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re (b) Your appellant submits that the learned Assessing Officer had violated the provisions of natural justice by not appreciating and instead ignoring the evidences produced before him and the appellant further submits that all the proofs of property being owned for more than 12 years and proof of ownership of Koyaji Chawl were produced and were furnished including those required as per the law. (c) Your appellants pray that an order of assessment passed in violations of natural justice be qua .....

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