TMI Blog2020 (4) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... d raised by the assessee is allowed for statistical purposes. - I.T.A. No. 6368 & 6369/Mum/2017 - - - Dated:- 10-2-2020 - Shri S. Rifaur Rahman, AM And Shri Ravish Sood, JM For the Appellant : Ms. Neha Sharma, AR For the Respondent : Shri V. Vinod Kumar, DR ORDER PER S. RIFAUR RAHMAN (ACCOUNTANTMEMBER): The present two (2) Appeals have been filed by the assessee against the order of Ld. Commissioner of Income Tax (Appeals)-48, Mumbai, in short Ld. CIT(A) dated 21.08.2017 for AY 2009-10 2014-15 respectively. 2. The issues raised in both the appeals are identical, therefore, for the sake of convenience, these appeals are clubbed, heard and disposed of by this consolidated order. Firstly, we are taking ITA No. 6368/Mum/2017 for AY 2009-10 filed by the assessee. 3. The brief facts of the case are, assessee filed its return of income for the A.Y. 2013-14 on 27.09.2013 declaring total income at ₹ 69,97,720/-. The case was selected for scrutiny and accordingly, notice u/s. 143(2) and 142(1) of the Act were issued and served upon the assesse. In response to the aforesaid notices, the AR of the assessee attended and furnished the relevant inform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... head wise income. The assessee in accordance to the said section is required to offer its income to tax under heads specified in the Act. Further, section 22 of the said Act provides the specific head for income earned from ownership of house property, rents or other income from ownership of house property under the head of Income from house property. Further, section 28 deals with the income earned from business and profession. Therefore, merely because the income is attached to any immovable property that cannot be sole factor for the assessment of income as income from property or income from business. The income should be tested as per the law. For better understanding we would like to discuss the charging section of Income from House property and Income from Business and profession, Tax imposed under section 22 is a tax on annual value' of house property. The annual value determine as per the provision of section 23 of the Act. The person should be the legal owner of the property. The purpose for which the building is used by the tenant is also immaterial. It does not make any difference, if the property is owned by a limited company, a firm, a HUF or individual. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al of Shipping. In the year 2003-04 there was a change in Govt. Policy wherein Director General of Shipping put a restriction on commercial entity from conducting such type of training courses. Hence the appellant group set up a non-profit making company registered u/s 25 of Companies Act viz. Sea Scan Marine Foundation (SSMF), for providing such training for Merchant Navy. The training facilities of the appellant company were given to this SSMF foundation on rent. Thereafter, the appellant company received the rent from its sister concern SSMF as per the agreement executed and offered the same as business income. It was contended that since it was apparent that the appellant company will not be permitted to restart the training, the appellant changed its policy and started showing the rent income as income from house property w.e.f. A. Y. 2010-11. 4.3. The appellant was asked to furnish details of assets which were leased out and to furnish details of block of assets and the depreciation schedule for Income tax purposes for A. Y. 2004-05 onwards till A. Y. 2010-11. The AR was also asked to furnish details of depreciation disallowed if any in the current assessment year. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because the standard deduction available u/s. 24(a) is much higher than the depreciation and repairs and maintenance allowable in the current year than if the income was treated as business income. In these facts and circumstances, I uphold the order of the AO and ground of appeal no. 1 is dismissed. 6. Aggrieved with order of Ld. CIT(A), assessee is in appeal before us raising following grounds of appeal:- Ground No.l: On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) grossly erred in upholding rent income as income from business and disallowance made by the learned A.O of deduction of ₹ 43,20,030/- claimed u/s 24(a) of the Act The appellant prays that the rent income should be treated as income from house property and addition of ₹ 43,20,030/- with respect to deduction claimed u/s 24(a) may please be deleted. The appellant reserves its right to add, alter, amend or delete the grounds of appeal. 7. Before us, assessee filed additional evidence alongwith application for admission which contained Memorandum of Association of the assessee company. Since the additional evidence is MOA of the assessee company its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Hon ble Gujarat High Court in the case of CIT vrs. New India Industries Ltd. (1993) 201 ITR 208 (Guj). 10. On the other hand, Ld DR relied on the order passed by revenue authorities as well as order of ITAT for AY 2010-11 and submitted that the facts are similar to the present case and there is no change in the facts of the current year also, therefore he supported the finding of Ld. CIT(A). 11. Considered the rival submissions and material placed on record. We notice that due to change in government policy on running of maritime training facility, the assessee was forced to let go its business to its sister concern, a non-profit section 25 company. It is fact that assessee will never in the near future can run the training facility. We notice that as far as this fact is concerned, there is no dispute. The objection and observation expressed by Ld. CIT(A) is towards the details which the assessee failed to submit on the depreciation, which the assessee claimed over the years before transferring the facility to its sister concern. What is relevant is the nature of transaction and claim under Income Tax Act. In the given case, the assessee had a facility and which assessee c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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