9911796707
TMI Blog2023 (2) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax (Appeals) [CIT(A)] is wrong and bad in law. 2. That the Ld. CIT (A) erred on facts and in law in holding that income of the appellant is chargeable under the head "Income from Profits and Gains of Business and Profession" as against the income offered to tax under the head "Income from House Property" by the appellant. 3. That the Ld. CIT(A) erred on facts and in law in confirming the disallowances of Rs. 1,66,96,674/- made by the Ld. AO u/s 40(a)(ia) of the Income Tax Act, 1961." 3. Briefly stated the facts of the case are that the assessee is a private limited company incorporated on 01.04.2008 with main objects to build, construct and develop and to act as builders colonisers and civil and constructional contractors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be taxed under the head profit and gains of business or profession. The assessee filed the following reply :- "5.1 The AR of the appellant submits as under: Vide letter dated 10.07.2018, the appellant submitted as under: Your Honor has relied on the ruling of Hon'ble Supreme Court in the case of Chennai Properties & Investments Limited (supra) and has proposed to treat the rental income as "Profits and Gains of Business or Profession". In the aforesaid ruling, the Hon'ble Apex Court has held that when the main objects of the company was to acquire properties and earn rental income by letting out the same, the said income was to be brought to tax as business income and not as house property. The facts in the case of Chennai Proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome from business. It cannot be treated as 'income from the house property'. It is humbly submitted that the MOA of the taxpayer in the Chennai Properties (supra) ruling included object of letting out of properties as a main object. However, in the instant case, it is submitted that the Appellant company's main objects in the memorandum of association do not include the object of letting out the properties and earn rental income thereon. Hence, the facts of the aforesaid ruling are distinguishing and not applicable in the Appellant's case. The memorandum of association of the company has been enclosed as Annexure 1 to this submission. To reiterate, the appellant humbly submits that the company is the owner of the building whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the code prescribed u/s. 28 to sec. 43D, taking into consideration the disallowance of interest expenditure under the provision of section 40(a)(ia) and compute the income accordingly and accordingly enhanced the income treating the rental income as income from business or profession. However, also directed that the interest of Rs.1,66,96,574/- has to be disallowed u/s. 40(a)(ia) of the Act. 8. Before us the Counsel reiterated what has been stated before the CIT(A). 9. Per contra the DR strongly supported the findings of the CIT(A) and read operative part of the order. 10. We have given a thoughtful consideration to the orders of the authorities below. The undisputed fact is that the ratio laid down by the Hon'ble Supreme Court in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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