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2018 (2) TMI 349

income is from letting out of properties. This is duly supported by the profit and loss account submitted by the assessee. Even the Assessing Officer has accepted that the entire receipt of the assessee consists of rentals for letting out of property. In these circumstances, find that Honíble Apex court decision in the case Rayala Corporation (P) Ltd. vs. ACIT (2016 (8) TMI 522 - SUPREME COURT) duly covers the issue in favour of the assessee. Thus assessee's receipts should be considered as business income - Decided in favour of assessee. - ITA No.3326/MUM/2017 - Dated:- 5-2-2018 - Shri Shamim Yahya, Accountant Member For The Appellant : Shri K Gopal For The Respondent : Ms N Hemalatha ORDER This is an appeal by the assessee directed agains .....

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section 57(iii) of the Act. 3. Brief facts of the case are that the assessee company is a Private Limited company and is engaged in the business of letting premises. The assessee had efiled its return of income for the impugned assessment year on 30.09.2012, declaring total income of 11,83,411/- The said return was processed u/s. 143(1) of the Act. During the course of assessment proceedings, Assessing Officer noted that assessee is in the receipt of Rental Income of ₹ 31,30,7367-. However, the same has been credited in Profit and loss account and also assessee has claimed expenditure of ₹ 18,57,572/- against the same. Assessee contended before the Assessing Officer to consider the rent received from Tenants as House Property I .....

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es & Investments Ltd. vs. CIT, Central III, Tamilnadu [2015] 56 taxmann.com 456 (SC) are entirely different from the present case as in the Chennai Properties & Investments Ltd. vs. CIT; the main object of that company was to acquire and hold the properties known as Chennai House and Firhavin Estate both in Chennai and to let out those properties as well as make advances upon the security of lands and buildings or other properties or any interest therein. e) Assessee company has itself admitted to tax the rental receipts under the head Income from House Property . The AR of the assessee company is contending only to tax the compensation received from terrace antenna and hall booking of ₹ 12,07,252/- under the head Business Inc .....

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st above order assessee is in appeal before the ITAT 5. I have heard both the counsel and perused the records. Learned counsel for the assessee submitted that assessee company s only source of income is from letting of the properties and the rental income derived from the same and it should be treated as business income. In this regard, he referred to the decision of Hon ble Supreme Court in the case Rayala Corporation (P) Ltd. vs. ACIT 72 taxmann.com 149 (SC). 6. Per contra learned Departmental Representative relied upon the orders of the authorities below. He further referred to the decision of Hon ble Supreme Court in the case of Raj Dadarkar & Associates vs. ACIT 81 taxmann.com 193. 7. On careful consideration I note that it is undi .....

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the Revenue. 11. The judgment relied upon by the learned counsel appearing for the assessee squarely covers the facts of the case involved in the appeals. The business of the company is to lease its property and to earn rent and therefore, the income so earned should be treated as its business income. 12. In view of the law laid down by this court in the case of Chennai Properties (supra) and looking at the facts of these appeals, in our opinion, the High Court was not correct while deciding that the income of the assessee should be treated as income from house property. 13. We, therefore, set aside the impugned judgment and allow these appeals with no order as to costs. We direct that the income of the assessee shall be subject to tax unde .....

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