Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: articles on VAT and GST in India :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT Audit :: Central Excise rule to resale the machines to a new company :: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: due date for vat payment :: cpt :: empanelment :: TAX RATES - GOODS TAXABLE @ 4% :: VAT RATES :: ACCOUNTING STANDARD :: form 3cd :: TDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes
« From the Courts »
  Dr. Gautam Sen vs. CCIT (Bombay High Court)
 Dr. Gautam Sen vs. CCIT (Bombay High Court)
 DCIT vs. Shivshankar R. Sharma (ITAT Mumbai)
 ACIT vs. Jawaharlal Agicha (ITAT Mumbai)
 CIT vs. M/s. D. Chetan & Co (Bombay High Court)
 Makes further amendments to Notification no. 157/90-Customs dated 28th March, 1990 regarding temporary admission under the ATA Carnet
 Appointment of Common Adjudicating Authority by DGRI - 2/2016-Customs
 ransfers Of Hon’ble Members Of The ITAT (September 2016)
 M. G. Contractors Pvt. Ltd vs. DCIT (ITAT Delhi)
 Haryana State Road & Bridges Development Corporation Ltd vs. CIT (P&H High Court)
 Dharamshibhai Sonani vs. DCIT (ITAT Ahmedabad)

K. Raheja IT Park (Hyderabad) P. Ltd vs. CIT (ITAT Hyderabad)
November, 12th 2014

Law on whether income from rent for lease of space in technology park and income from operation and management of facilities is assessable as "business profits" or "income from house property" explained

Assessee has been consistently offering the incomes under the head “Income on House Property” as far as the receipts of rents are concerned and under the head “Business” as far as the service fee and management fee on maintenance are concerned. Not only in the impugned years, even in earlier years also, the incomes were accepted as such. Since the Ld. CIT cannot revise those orders, these orders are not subject matter of proceedings u/s 263 and therefore, the issues are concluded therein accepting assessee’s contention. On the rule of consistency also, it cannot be modified in a later year. However, it is not on rule of consistency alone. As seen from the orders passed by the authorities at the time of assessment, they have accepted the bifurcation of rental income and services income and rental income was accepted under the head “House Property”. As rightly pointed out by assessee in the submissions before the Ld. CIT that assessing incomes under head Business was not prejudicial to the interests of revenue considering that a higher claim of depreciation was allowable on the properties when compared to 30% allowance for repairs on the incomes assessed, we agree that the orders are not prejudicial to the interest of Revenue.

(ii) CIT erred in relying only on the ITAT order in the case of Global Tech Park P. Ltd., ACIT (supra) wherein the Coordinate Bench relied on the judgment of Hon’ble Karnataka High Court in the case of Balaji Enterprises vs. CIT 225 ITR 471. As seen from the judgment of Hon’ble Karnataka High Court the facts in the said case were that assessee firm even though constituted to carry on business of dealing in real estate and setting up, development and exploitation of commercial complex in market, they have not owned the property but were developing the properties obtained on lease hold or on free hold basis and further leasing the properties after development to the lessees. In those facts of the case, the incomes are correctly held as assessable under the head “Business”. Further, in the said case of Global Tech Park P. Ltd., (supra), the incomes received were composite incomes for both leasing as well as maintenance and A.O. has not bifurcated them at all. In that case construction and maintenance of industrial park was indeed held as ‘business activity’. However, in order to arrive whether a particular income is to be assessed under “House Property or Business” there are many aspects which require examination. First of all, one has to enquire whether assessee is owner of the property or not. Thereafter, assessee’s nature of activities are to be analysed vis-à-vis the activities/agreements entered by assessee with reference to various lessees and to verify whether rental income is separately received or as a composite rent but bifurcated by assessee.

The terms of agreement, the period of lease, the conditions of lease etc., also required to be examined. Therefore, in order to take a decision whether a particular income is to be assessed under the head “House Property” or under the head “Business” many more facts are required to be examined. In this case, neither the A.O. nor the Ld. CIT examined any of these aspects, but decided simply on the principles of law. Therefore, we are unable to give any finding about the correctness of the action of either A.O. or Ld. CIT in coming to a particular conclusion whether the income is assessable under ‘House Property’ or ‘Business’ in the absence of facts in these years (East India Housing and Land Development Trust Ltd 42 ITR 49 (SC), Karnani Properties Ltd., vs. CIT 82 ITR 547 (SC), S.G. Mercantile Corporation Pvt. Ltd., vs. CIT 83 ITR 700 (SC), Sambhu Investments Pvt. Ltd vs. CIT 263 ITR 143 (SC) etc referred)

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Publishing Management System PMS News Management System Publishing Management System Development Online News Management System for media company custom Publishing management system development Survey management system Market Res

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions