9911796707
TMI Blog2017 (11) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA.No.724/Hyd/2010 A.Y.2006-07 Assessee 5 ITA.No.897/Hyd/2010 A.Y.2006-07 Revenue 6 ITA.No.2745/Mum/2013 A.Y.2007-08 Revenue 7 ITA.No.308/Hyd/2012 A.Y.2008-09 Assessee 8 ITA.No.1992/Mum/2013 A.Y.2009-10 Assessee 9 ITA.No.2748/Mum/2013 A.Y.2009-10 Revenue 2.1 First, we take up assessee's appeal ITA Nos. 558/Hyd/2010 for AY 2005-06 as the lead year which contest the order of Ld. Commissioner of Income Tax (Appeals)-V, Hyderabad [CIT(A)] Appeal No. 071/DC- 16(2)/CIT(A)-V/2008-09 dated 02/03/2010. The assessment was framed by Ld. Deputy Commissioner of Income Tax, Circle 16(2), Hyderabad [AO] on 30/09/2008. The following grounds have been raised:- 1. "On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (A) erred in confirming all the additions made by Ld. Assessing Officer and accordingly dismissing the appeal of your appellant. 2. On the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals) erred in treating the Lease Rentals income on house property & equipment as Income from house property as against Business Income as done by your appellant. 3. On t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ten years and the assessee company was not carrying out any other activity and further, could not fulfill certain conditions to avail deduction u/s 80-IA. Moreover, the tenant was deducting TDS as applicable to rental payments and the assessee was not exploiting the business premises as commercial asset and simply leased out the same to tenant and therefore, the income was assessable under the head House Property. Finally, placing reliance on several judicial pronouncements, the income was re-computed by assessing rental income under the head Income from House Property. 2.4 Further, Ld. AO noted that the assessee purchased the said premise for Rs. 24.42 crores during AY 2004-05 and the same was financed from Indusind Bank Ltd. to the extent of Rs. 15 Crores. During the impugned AY, it obtained fresh loan of Rs. 20.50 crores from HDFC Bank Limited at lower rate of interest and repaid the loan taken from Indusind Bank Limited. Out of fresh loan obtained during the impugned AY, an amount of Rs. 5 crores was advanced to sister concern as interest free advances and accordingly, Ld. AO disallowed proportionate interest against the same which came to Rs. 10,81,707/-. 2.5 It was furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poration Vs. ACIT [2016) 72 taxmann.com 149]. 4.2 The Ld. AR further contended that the Ld. CIT, in subsequent order for AYs 2007-08 & 2009-10 directed the Ld.AO to treat the impugned income as Business Income only and the revenue has accepted the stand of Ld.CIT(A) and did not contest the issue any further. Further, the Ld. AO in quantum assessment for Ay 2014-15 u/s 143(3), himself, accepted the same under the head Business Income only an therefore, following rule of consistency, the revenue was debarred from changing stands under similar factual matrix. Our attention is further drawn to the order of this Tribunal rendered in the case of assessee's sister concern namely M.S.Luvish Projects (P) Ltd. Vs. DCIT [ITA No. 919/H/2012 & others order dated 23/09/2015] where the issue has been decided in appellant's favor under identical circumstances. 4.3 Lastly, Ld. AR placed reliance on CBDT Circular No.16/2017 dated 25/04/2017 where it has been clarified that the rental income earned by undertakings operating industrial Park / SEZ as per approved scheme would be chargeable to tax as Business Income. 4.4 Per Contra, Ld. DR while placing reliance on the stand of lower authorities, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt and restore that of the Income Tax Appellate Tribunal. No orders as to costs. We find that the facts of the present case are identical in nature since the main objective of the assessee company was to deal in real estate of varied nature and the rental income was the main source of income for the assessee. Our view is further fortified by the cited CBDT circular No. 16/2017 and judgment of this Tribunal rendered in the case of assessee's sister concern under identical situation. Even otherwise, the revenue has accepted the stand of assessee in several other years and rule of consistency demands that similar stand be taken under identical circumstances. Therefore, we conclude that rental income earned by the assessee was chargeable under the head Business Income only as against Income from House Property taken by lower authorities. Resultantly, this ground of assessee's appeal succeeds. 6. The assessee, in other grounds, is aggrieved by disallowance of various expenditure viz. depreciation, business expenses, interest expenses etc. These were disallowed by the lower authorities since the rental income earned by the assessee, as per their opinion, was chargeable under the head ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revisional jurisdiction u/s 263 on 25/04/2008 directed Ld. AO treat the same as Income from House Property with further directions to verify the loans taken by the assessee & also verify allowability of expenditure claimed by the assessee. The Ld. AO, in the consequential assessment, re-computed the income of the assessee at Rs. 49,46,570/-. The assessee, in ITA No. 1010/Hyd/2009 has contested the invocation of revisional jurisdiction u/s 263 and in ITA No. 1133/Hyd/2010 has contested the consequential assessment order. Therefore, the issues being identical, we allow assessee's ground of appeal qua treating rental income as Business Income and restore the issue of admissibility of expenses to the file of Ld. AO with similar directions. Resultantly, the assessee's appeal ITA No. 1133/Hyd/2010 stands partly allowed whereas ITA No. 1010/Hyd/2009 stands dismissed, being infructuous. 10. Now, we take up revenue's appeal ITA No. 897/Hyd/2010 for AY 2006-07 where the revenue is aggrieved by certain relief provided to the assessee by Ld. CIT(A) qua interest expenditure. Since in assessee's appeal, we have already restored the issue of allowance of expenditure to the file of Ld. AO for re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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