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2017 (1) TMI 737 - ITAT MUMBAI

2017 (1) TMI 737 - ITAT MUMBAI - TMI - Income on account of licence fees and amenities provided to tenant - business income OR income from house property income - Held that:- We find that the assessee had purchased a property and same was let out to Citigroup, that it had entered into two agreements with its tenant, that it had provided various amenities to the Citigroup, that the rental income received by it was offered under the head business income, that the AO was of the opinion that Leave a .....

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ants. It is a case of exploiting the asset commercially and not the case of mere letting it out. Therefore, in our opinion, the order of the FAA does not suffer from any legal infirmity. In our opinion, facts of JST Reality (2015 (2) TMI 397 - ITAT MUMBAI ) are distinguishable from the facts of the case under appeal. Considering the peculiar facts and circumstances of the case, we decide the effective ground of appeal against the AO. - I. T. A. 5778/Mum/2013 - Dated:- 6-1-2017 - Sh. Rajendra, Ac .....

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. (-) 9. 46 lakhs. 2. The effective ground of appeal is about allowing the income on account of licence fees (Rs. 1. 08 crores) and amenities(Rs. 19. 30 lakhs) as business income as against the income from house property income. During the assessment proceedings, the AO found that the assessee had let out its property to Citigroup Information Technology O&S Ltd. (Citigroup)as per the Leave and license agreement dated 29/06/2006, the licence fee for the year under consideration was ₹ 12 .....

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see to explain as to why the income from the property should not be charged to tax under section 22 of the Act under the head income from house property . After considering the submission of the assessee, he referred to the cases of SG Mercantile Corporation Mercantile Private Ltd. (83 ITR 700) & Chennai Properties (266 ITR 685). He held that the assessee was incorporated on 27. 3. 2006, that it had taken a loan of ₹ 10. 34 crores to acquire the property, that the claim of the assessee .....

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he Act. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appellate Authority (FAA). Before him, it was argued that the main object of the assessee was to carry on the business of selling, reselling, exchanging, repurchasing, letting out, granting licences of the land/building/plants/machinery/factories, that in pursuance of the objectives the assessee had purchased a commercial property after obtaining loan, it decided to exploit the commercial property on L .....

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assessee relied upon certain case laws and argued that amount in dispute was wrongly assessed under the head income from house property by the AO. 4. After considering the assessment order and submission of the assessee, the FAA held that the company was incorporated in March, 2006 with the main object of carrying on business of selling, reselling, letting out etc. , that it had purchased the commercial property, that the unit had been used only for a specific business purpose of information an .....

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ustified in assessing the income received by the assessee under the head income from house property. 5. During the course of hearing before us, the Departmental Representative (DR) supported the order of the AO and referred to the case of JST Realty Private Ltd. (51 taxmann. com 52). 6. We have perused the material available on record. We find that the assessee had purchased a property and same was let out to Citigroup, that it had entered into two agreements with its tenant, that it had provide .....

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