TMI Blog2018 (10) TMI 1636X X X X Extracts X X X X X X X X Extracts X X X X ..... nue by: Shri D.G. Pansari (DR) Assessee by: Shri Rajesh S. Shah (AR) ORDER Amarjit Singh, The revenue has filed the present appeal against the order dated 25.11.2016 passed by the Commissioner of Income Tax (Appeals) -20, Mumbai [hereinafter referred to as the CIT(A) ] relevant to the A.Y.2013-14. 2. The revenue has raised the following grounds: - 1. On the facts and in circumstances of the case and in law, the Ld. CIT(A) erred in holding that the income earned from letting out the building is chargeable under the head Income from Business and not under the head income from House property. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that Income from leave and license of ₹ 2,52,59,282/- is chargeable under the head Income from Business instead of Income from House property. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that income from service charges of ₹ 1,68,39,526/- is chargeable under the head Income from Business instead of Income from House Property, 4. On the facts and in circumstances of the case and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts Ltd. Vs. CIT (2015) 56 Taxmann.com 456 (SC) and on the basis of the decision of the Hon ble Supreme Court in the case of Shambhu Investment P. Ltd. Vs. CIT 263 ITR 143 (SC) therefore, the finding of the CIT(A) is not liable to be disturbed in the interest of justice. It is also specifically argument that the case of the assessee has duly been covered by the decision of the Hon ble ITAT Mumbai Bench in ITAT. No.1771/M/2016 dated 05.01.2018, therefore, in the said circumstances, the appeal of the revenue is liable to be dismissed. Before going further, we deemed it necessary to advert the finding of the CIT(A) on this issue which has been given in para no. 9 and is reproduced as under.: - 9, The 3rd, 4th, 5th and 6th grounds of appeal are of similar nature and are taken together as these pertain to head of income which the liability to pay tax arises. I have carefully considered the facts of the case, the submissions of the appellant and order of the Assessing Officer in this connection it is noted that the assesses company had given its two industrial buildings Indiplex-l and lndiplex-ll on ease and had received licence fee of ₹ 2,52,59,282/-, service charges of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rounds of appeal of the appellant are allowed. 5. However, it also came into notice that the Hon ble ITAT in the assessee s own case in ITA. No. 1771/M/2016 dated 05.01.2018 has decided the matter of controversy in favour of the assessee in which the income from lease and service charges of the assessee has been treated as income from the business. The relevant finding has been given in para no. 4, 5 6 which are hereby reproduced as under.: - 4. Issue No. 1 3 are inter-connected, therefore, are being taken up together for adjudication. Under these issues the matter of controversy is that whether the income from leave and license of ₹ 1,99,73,433/- and service charges of ₹ 1,33,90,233/- were chargeable under the head of income from business or income from house property. The Ld. Representative of revenue has argued that the Ld. CIT(A) has wrongly treated the income from leave and license chargeable to income from business whereas the same should be treated as income from house property, therefore, in the said circumstances the order passed by the CIT(A) is wrong against law and facts and is liable to be set aside. On the other hand, the Ld. Representative of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come from House Property as taken by the Ld. Assessing Officer. The addition made by the AO in this regard cannot be sustained in appeal and are directed to be deleted. The AO is directed to compute the income in the hands of the assessee by considering leave and license income and income from service charges to be assessable as income from business in the hands of the assessee and the related expenditure has to be allowed in the hands of the assessee. Accordingly, these grounds of appeal of the appellant are allowed. 5. On appraisal of the above mentioned finding, we noticed that the CIT(A) has considered the Memorandum of Association of assessee in which the main object of the assessee was to acquire properties and earn income by letting the same. The said income was to be brought to tax as business income and not as income from house property. The CIT(A) by assessing the nature of the business of the assessee and memorandum of association and also relying upon the finding of the Hon ble Supreme Court in the case of Chennai Properties and Investment Ltd. Vs. CIT (2015) 56 Taxmann.com 456 (SC) has allowed the claim of the assessee and treated the income from leave and lease an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mises to facilitate loading and unloading of goods in a convenient manner directly in to the units of the licensee. Out client in addition to the passenger lifts has also installed industrial lifts for taking the goods from one floor to other floors of the building. Our client submits that they have developed and constructed the premises with the intention of using them as industrial units by giving the licensees not only the premises but also the supporting ITA No.261/Mum/2016 3 infrastructure required for smooth functioning of an industrial unit. In addition to the leave license agreement, out client has also entered into service agreement in respect of various services rendered by them. Copy of the said agreement is annexed herewith as Annexure-C. it can be seen from the annexed agreement that in addition to letting out of premises our client provides various kinds of services such as security, maintenance of premises, operating and maintenance of elevators, repairs and maintenance of the building and fire alarm and other safety features. In addition to the aforesaid services, the agreement also contains a residual clause whereby out client is to provide various assistance as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um/2016 4 and Investments Ltd. vs CIT [2015] 56 Taxmann.com 456 (SC) has held that where in terms of memorandum of association, main object of the assessee company was to acquire properties and earn income by letting the same, said income was to be brought to tax as business income and not as income from house property. It is noted that facts of the present case are identical to the facts of the case of Chennai Properties and Investments Ltd. as discussed and the ratio as laid out by the Apex Court is applicable on the facts of the case: Respectfully following the judgment of the Apex Court in the case of Chennai Properties and Investments Ltd. and on the facts of the case it is held that the income earned by the appellant company during the year was in the nature of business income and not in the nature of income from House Property as taken by the Learned Assessing Officer. The additions made by the Assessing Officer in this regard cannot be sustained in appeal and are directed to be deleted. Accordingly, the grounds of appeal of the appellant are allowed. 4. We find from the above facts and circumstances of the case that the CIT (A) has rightly allowed the claim of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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