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TMI Blog2020 (4) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the return of income or under the head "Income from Business" as held by the AO in the assessment order. 3. In course of hearing, learned AR of the assessee submitted that the AO and CIT (A) had proceeded on the basis of the objects Clause of the Partnership Deed. He pointed out that in Para 4.11 of the assessment order, the AO held that the provisions of the partnership deed clearly mention that the business objective of the partnership firm is to rent or lease out buildings. The AO followed the judgment of Hon'ble apex court rendered in the case of Chennai Properties and Investment Limited vs. CIT as reported in 373 ITR 673. He submitted that the AO and CIT (A) has totally disregarded the activities of the assessee firm and the nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r activity is business because it is concerned with an asset with which trade is commonly carried on. He pointed out that in Para 17 of this judgment of Hon'ble apex court rendered in the case of Raj Dadarkar & Associates vs. ACIT (Supra), it is noted that in that case also as in the present case, reliance was placed only on a clause of the partnership deed to show its objective and no other material was referred to. He submitted that Hon'ble apex court reproduced the finding of the tribunal in that case as per which, the assessee let out shops/stalls to various occupants on a monthly rent as in the present case. He further pointed out that in that case, the assessee collected 20% of monthly rent as service charges because some services suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income for that year along with Assessment Order dated 24.12.2019 and submitted that in that year, as per the assessment order passed u/s 143 (3), the claim of the assessee stands accepted. He submitted that when the claim of the assessee is accepted by the AO in the later year under similar facts, in the present year also, it should be accepted. Learned DR of the revenue supported the order of CIT (A). He also placed reliance on the same judgment of Hon'ble Apex Court rendered in the case of Chennai Properties and Investment Limited vs. CIT (Supra). 4. We have considered the rival submission. We find that there is no other basis of the action of the AO that the rental income is assessable as business income apart from some clauses of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year, the AO has also accepted the claim of the assessee in the scrutiny assessment although without any discussion but because of this fact that in the immediately preceding year, the claim of the assessee was not accepted by the AO, it cannot be said that the claim of the assessee was not noticed by the AO particularly when as against loss of Rs. 337,86,184/- reported by the assessee under the head "Income from Business" and income of Rs. 25,57,556/- declared by the assessee under the head 'Income from Other Sources", the assessee has declared much higher amount of income of Rs. 10,44,08,196/- under the head "Income from House Property", which was converted by the AO to "Income from Business" in the preceding year i.e. the present year. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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