TMI Blog2019 (9) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... mination has been made in the past in terms of the provisions of section 32 (2) and 72. No claim at this stage can be adjudicated in terms of the ratio of the judgement of the Apex Court in the case of Goetze (India) Ltd. v CIT [ 2006 (3) TMI 75 - SUPREME COURT] which held that appellant-assessee cannot make a claim for deduction other than by filing a revised return - Decided against assessee - ITA No.47/RAN/2018 - - - Dated:- 30-8-2019 - Shri Chandra Mohan Garg, JM And Shri L.P. Sahu, AM For the Assessee : Shri P.S.Paul, CA For the Revenue : Shri P.K.Mondal, Addl.CIT(DR) ORDER PER BENCH : This appeal has been filed by the assessee against the order of Commissioner of Income Tax (Appeals), Ranchi, dated 21.12.2017 for the assessment year 2014-2015, on the following grounds :- Ground No: 1 Besides Rent received from 20 nos of shop, the account has been prepared taking receipt from cinema hall, gaming zone and event management Area as house property income. |t was assessed uptothe assessment year 2013-14. The Ld. A. 0. has treated the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion on building at the rates applicable. Similar exercise may be done for depreciation on assets (now held to be business assets) and other common expenses (now to be held as business expenses) after ascertaining their linkage with the running of the cinema hall. The Ld. C.I.T. (A) has committed a mistake in making such direction. All the tenants are running their business independently. It is nothing to do with cinema business. ADDITIONALLY, the common expenses are such expenses incurred by the firm that cannot be bifurcated exactly into expenditure incurred for house property or business therefore these expenses are divided between the two in the ratio of floor area used for house property is to floor area used for business. Since the Ld C.I.T.(A) has treated income from cinema, gaming zone and events as business expenditure the floor area ratio will hence change to 25:75 against 60:40. Just like in all previous years the A.O. has allowed the above-mentioned formula for bifurcation of common expenses therefore the same should be applied after recasting the ratio irrespective of its direct linkage with the cinema business. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aggrieved from the assessment order, the assessee appealed before the CIT(A), wherein the CIT(A) after considering the submissions of the assessee and findings of the Assessing Officer, upheld the additions made by the Assessing Officer except the alternate plea made by the assessee. Finally, the CIT(A) partly allowed the appeal of the assessee. 4. Further aggrieved from the order of CIT(A), the assessee is in appeal before the Income Tax Appellate Tribunal. 5. Ld. AR before us submitted that There are 20 numbers of shops whose rent is treated as income from house property. There is one cinema hall space, one gaming zone and one free hold space on which various parties hold events. However, the Assessing Officer was not justified in treating the receipts from or rent from Cinema hall, receipts from gaming Zone and receipts from Event management area from this Assessment Year as Business Income. Ld. AR further submitted that the Computation of Total Income, the Copy of the Accounts, the Assessment order of u/s 143(3) and the order of Ld. Commissioner of Income Tax ( Appeals ) of the Assessment year 2013 - 14 are enclosed as Annexure no: 1, 2, 3 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er day or 17% of Net Monthly Revenue if the occupancy level achieved was 35% or more calculated on an average of 5 shows per day. There is use of expressions occupancy level* and shows per day to determine the revenue sharing. Besides the appellant was also entitled to receive 18% revenue generated from business activities as 'food beverages, merchandise, memorabilia, advertisement. ATM/NCR counters or from any other activities which generate revenue. The aforesaid calculation was based on business proposition and totally based on profits of the business and was proportionate to the business income. The minimum fixed sum mentioned in this agreement was made to ensure that even if there was no/less receipt in any quarter, minimum sum was paid to ensure that major repair/maintenance, etc. should not suffer. Therefore, though there was a minimum guarantee, there was no upper limit on the 'revenue sharing' method, unlikerental incomes. Moreover, Stargaze was required to provide detailed account of day to day revenue from sale of tickets, concessional sale and any other revenue to the appellant on a monthly basis. The appellant also had the right to verify the accounts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained by the vault holder but the Key to the entrance was kept in the exclusive possession of the assessee. A fire alarm was installed and an annual amount was paid to the municipality towards fire sendees. The assessee opened in the premises two railway booking offices free of charge for the convenience of members for despatch and receipt of film parcels. A canteen was also run for the benefit of the vault holders. The assessee entered into agreement with the film distributors. In terms of said agreement, the film distributors were given licence to use the vaults only for the purpose of storing cinema films on payment of monthly amounts. The ITO assessed the rental income accrued to the assessee under section 9 of the 1922 Act. On examination of the facts the apex court held that: - The High Court was right in holding that the assessee was carrying on an adventure or concern in the nature of trade. The assessee not only constructed vaults of special design and special doors and electric fittings, but it also rendered other services to the vault-holders. It installed fire alarm and was incurring expenditure for the maintenance of fire alarm by paving charges to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to verify the accounts, with prior notice to Stargaze. These facts show that the receipts had the character of business income. For this proposition reliance is place on Chennai Properties Investments Ltd. v. C1T (2015) 373 ITR 0673 (SC) and Rayala Corporation (P) Ltd. v. Asstt. CIT(2016) 386 ITR 0500 (SC). [8.28] As against this the agreement of letting out space to other tenant was on a square foot basis which was to be enhanced after three years. The activities and entitlements of the appellant vis a vis Stargaze were completely absent. It was a mere act of letting put property at a fixed rent based on square foot area let out. [8.29] The appellant has died upon the judgement of the Hon'ble Delhi HC in the case of C.I.T. Vs Ansal Housing Construction [2016] 389 ITR 0373 (Del-HC). However, a close reading of the said judgement would show that their Lordships had noted the object' of the transaction. The whole judgement turned on the issue of the 'object*. In the present case, it has been clearly brought out through the various clauses of the agreement with Stargaze that the main 'object' was to e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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