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TMI Blog2019 (3) TMI 1877X X X X Extracts X X X X X X X X Extracts X X X X ..... nds of appeal, which are common in both the appeals under consideration: "1. On the facts and circumstances of the case, the learned Commissioner of Income-tax (Appeals) - 10, Hyderabad ought not to have dismissed the appeal. 2. The learned CIT(A) ought to have held that the reassessment proceedings initiated by the Assessing Officer are not valid in the eye of law for the reasons that: (a) There are no reasons to believe that the income got escaped assessment from tax; (b) For the reason that the Assessing Officer had failed to furnish the reasons recorded for issuance of the notice under section 148 of the Act, despite the request made by the Appellant. 3. Without prejudice to the above, the learned CIT(A) ought to have held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was charged to P&L A/c as business expenditure. In the earlier assessments, AO has rejected the claim of the assessee and treated the consolidated receipt of rent and hire charges as income from house property. The same view was upheld by the coordinate bench. Assessee preferred an appeal before the High Court. 6. Similar issue was raised by the assessee in the appeal for the AY under consideration. Meanwhile, assessee is declaring the hire charges as business income and claimed the relevant interest on loan as business expenditure. Since, the authorities have treated the hire charges as part of rental income, they also rejected the interest expenditure as claimable expenditure, as it is claimed as business expenditure. 7. Considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the apparent has to be and has always been conceded. In this circumstance, the assessing officer has to remove the façade to expose the real intention of the parties cleverly cloaked and the actual agreement cannot be given effect. The only bona fide document to be acted upon not otherwise. There is a serious doubt and also it is shocking the conscious of the Bench, whether the assessee is getting hire charges equal to the rental amount for providing amenities. It cannot be real one and assessing officer required to see the actual rental value of the property in that place and bring that amount into tax under the head 'income from house property. As such, in the present case, the assessing officer came to the correct conclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, the decision of the apex court in Sultan Bros case supra, will not be applicable to the facts of the present case. Thus, on a plain reading of sec.56(2)(iii) of the Act, in the light of the facts of the case, we hold that conclusion reached by the CIT(A) is not correct. Further, no precise test can be laid out to ascertain whether income referred to by whatever nomenclature, lease amount, rent or licence fee received by an assessee from leasing or letting out of assets would fall under the head 'profit and gains of business or profession and it has to be determined from the point of view of a businessman in that business depending upon the fact and circumstances of each case and there is no readymade jacket formula. The ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same, the ground raised by the assessee is dismissed. 8. With regard to additional ground No. 3(b), we notice that assessee has availed loan to arrange the relevant fixed assets in the building and incurred interest expenditure. Since, the assessee was claiming them as business expenditure as the income was declared as business income. As the authorities have treated the business income as income from house property, the interest expenditure is connected to the earning of income and head of income was changed due to the facts of the case, the relevant expenditure is accordingly claimable u/s 24(b) of the Act. Merely accepting the income and excluding the related expenditure is not proper. Therefore, we direct the AO to allow the rele ..... X X X X Extracts X X X X X X X X Extracts X X X X
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