TMI Blog2015 (10) TMI 2560X X X X Extracts X X X X X X X X Extracts X X X X ..... perty while deciding the issue. Thus we restore the matter to the file of AO to decide afresh after affording reasonable opportunity of being heard to the assessee. - ITA No. 239/JP/2014 - - - Dated:- 30-10-2015 - SHRI T.R.MEENA, AM AND SHRI LALIET KUMAR, JM For The Revenue : Shri Kailash Mangal (JCIT) For The Assessee : Shri G.G. Mundra (C.A.) ORDER PER SHRI LALIET KUMAR, J.M. This is an appeal filed by the Revenue against the order of ld. CIT (A)-II, Jaipur dated 17.1.2014 for the A.Y. 2009-10. The sole ground raised in the appeal is as under :- Whether on the facts and in circumstances of the case and in law the ld. CIT (Appeals) has erred in deleting the disallowance u/s 24(a) of the I.T. Act and treating rental income as Income from house property instead of Income from business and profession , without appreciating the fact that rental income was earned from stock in trade. 2. The brief facts of the case are that the assessee is carrying on the business as builders and contractors. After its incorporation, the assessee has acquired plot no. D- 34, Subash Marg, C-Scheme, Jaipur admeasuring 2400 sq. yards through registered sale deed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead income from house property and special provisions for computation are also provided, income from letting out of immoveable property is generally assessable under the head income from house property except is certain circumstances. Exception to general rule that income from letting out of property is assessable under section 22 is provided by section 22, itself in wards. .. Other than such portions of such property as he may occupy for the purposes of any business or profession carried on by him, the profits of which are chargeable to income-tax, .. Where property is occupied for the purpose of business and letting is incidental to main business income from such activity would not be assessable u/s 22 of the I.T. Act, but as business income. c. From the chart mention supra revealing year wise sale of area of different floor clearly reveals that fact that the G Business Park building was stock in trade of the assessee. It was let out to attract potential buyer in order to ensure the intended buyer that his investment/in purchase of the property would bring him fruitful return. It is a part of the business activity to prompt the sale of the stock. Thus the entire pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25;्रय करने का है तथा प्रथमपक्ष ने उक्त प्लाट पर निर्माण इसी उद्देश्य से किया है प्रथमपक्ष को अपने उद्देश्यो की पूर्ति हेतू रूपयों की आवश्यकता होने के कारण ---------------------(para-12, page-6 of the sale deed) यह कि क्रेताश् द्वितीयपक्ष को इस विक्रय ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2368; गयी सम्पत्ति की लीज राषि मैसर्स इण्डस टावर्स लिमिटेड लेसी से अपन नाम से प्राप्त करे तथा क्रेता इस लीज को अपनेद नाम से हस्तान्तरित करवा सकेंगे और लीज शुदा सम्पत्ति खाली होने पर उसका कब्जा भी क्रेता द्वित ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of the property to him and allowed possession to the M/s. Indus Towers Ltd. in accordance with the terms of the lease. f. Upto the F.Y. 2010-11 except ground and seventh floor the total commercial property G Business Park has been sold. It indicates that asset were constructed and sold as stock in trade. A part of the stock was leased out under commercial expediency for improvement in demand. Thus income from leasing is business income as exploitation of business assets and not exploitation of ownership rights. 3. Feeling aggrieved by the order passed by the AO, the assessee preferred appeal before ld. CIT (A), who after considering the various judgments passed by the Tribunal and the High Courts , more particularly judgment passed by the Jaipur Bench of the in the matter of M/s. Mahima Real Estate Pvt. Ltd. in ITA No. 818/JP/2011 and of M/s. Vibhuti Financial Services Pvt. Ltd. in ITA No. 313/JP/2011 has held that the assessee is entitled to deduction under section 24(a) of the IT Act. The reasoning given by ld. CIT (A) in para 2.3 are as under :- 2.3. I have considered the facts of the case; assessment order and appellant s written submission. Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble Supreme Court in the matter of East India Housing and Land Development Trust Ltd. vs. CIT (1961) 42 ITR 49 (SC) has laid down the guiding principle for determining the character of Income whether the income earned by using the property will fall under the head Income from the house property or was the Business income . After elaborately discussing the issue, the Hon ble Supreme Court held that the distinct heads specified in Section 6 (Act no. 11 of 1922) indicated that the sources are mutually exclusive and income derived from different sources if falling under specific heads has to be computed for the purpose of taxation in the manner provided by the appropriate section . It was further held that if the income from a source falls within a specific head set out in Section 6, the fact that it may indirectly be covered by another head will not make the income taxable under the latter head. It was further argued by the ld. A/R that the Hon ble high Courts and tribunal in various other judgments followed the judgment of East India Housing and Land Development Trust Ltd. (supra) . lastly it was contended by the ld. A/R for the assessee that the Tribunal in the identical fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and gains of business or profession' ; (2) it is a mixed question of law and fact and has to be determined from the point of view of a businessman in that business on the facts and in the circumstances of each case, including true interpretation of the agreement under which the assets are let out; (3) where all the assets of the business are let out, the period for which the assets are let out is a relevant factor to find out whether the intention of the assessee is to go out of business altogether or to come back and restart the same ; (4) if only a few of the business assets are let out temporarily, while the assessee is carrying out his other business activities, then it is a case of exploiting the business assets otherwise than employing them for his own use for making profit for that business; but if the business never started or has started but ceased with no intention to be resumed, the assets also will cease to be business assets and the transaction will only be exploitation of property by an owner thereof, but not exploitation of business assets. 7.2 If we apply the law laid down by Hon ble Supreme Court and jurisdictional High Court in the given facts and ..... 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