The ACIT, Guntur V. M/s. Sri Bharathi Warehousing Corporation, Guntur

ITA 335/VIZ/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8919 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 30-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 142(1)

Judgement Text

ITA NO.335/VIZAG/2016 SRI BHARATHI WARE HOUSING CORPORATION, GUNTUR 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.335/VIZAG/2016 ( / ASSESSMENT YEAR: 2011-12) ACIT, CIRCLE - 2(1), GUNTUR VS. SRI BHARATHI WARE HOUSING CORPORATION GUNTUR [PAN: AAVFS 5390J ] ( % / APPELLANT) ( &'% / RESPONDENT) C.O. NO.20/VIZAG/2017 (ARISING OUT OF I.T.A.NO.335/VIZAG/2016) ( / ASSESSMENT YEAR: 2011-12) SRI BHARATHI WARE HOUSING CORPORATION GUNTUR VS. ACIT, CIRCLE - 2(1) , GUNTUR ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI M.N. MURTHY NAIK, DR / RESPONDENT BY : SHRI G.V.N. HARI, AR / DATE OF HEARING : 21.04.2017 / DATE OF PRONOUNCEMENT : 2 8.04.2017 ITA NO.335/VIZAG/2016 SRI BHARATHI WARE HOUSING CORPORATION, GUNTUR 2 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE REVENUE AND THE CROSS OBJ ECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST ORDER OF COMMISSI ONER OF INCOME TAX (A), GUNTUR DATED 29.02.2016 AND IT PERTAINS TO THE ASSESSMENT YEAR 2011-12. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF TOBACCO TRADE AND A LSO LET OUT COMMERCIAL PROPERTIES ON RENTAL BASIS. THE ASSESSE E HAS FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 ON 28.9.2 011 ADMITTING TOTAL INCOME OF ` 1,39,83,810/-. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICES U/S 143(2) & 142(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT') WERE ISSUED. IN RESPONSE TO N OTICES, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED AND FURNISH ED THE INFORMATION CALLED FOR. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS CONSIDERED INCOME FRO M RENTAL RECEIPTS UNDER THE HEAD INCOME FROM BUSINESS. AFTER CONSI DERING THE DETAILS FURNISHED BY THE ASSESSEE AND ANALYZING THE PROVISI ONS, HELD THAT INCOME FROM LEASE RENTALS RECEIVED BY THE ASSESSEE IS ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY, BUT NOT UNDER THE HEAD INCOME FROM PROFITS AND GAINS OF BUSINESS OR PROFESSION. AGGRIEVED BY THE ITA NO.335/VIZAG/2016 SRI BHARATHI WARE HOUSING CORPORATION, GUNTUR 3 ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). THE CIT(A) FOR THE REASONS RECORDED IN HIS ORDER DA TED 29.2.2016 CONFIRMED ADDITIONS MADE BY THE A.O. BY HOLDING THA T INCOME DERIVED BY AN ASSESSEE BY LETTING OUT FURNISHED PREMISES ON MO NTHLY RENT TO VARIOUS PARTIES IS ASSESSABLE AS INCOME FROM HOUSE PROPERTY AND NOT AS BUSINESS INCOME. AGGRIEVED BY THE CIT(A) ORDER, THE ASSESSE E IS IN APPEAL BEFORE US AND RAISED FOLLOWING GROUND: 1. THE LD. CIT(A)-1, GUNTUR OUGHT TO HAVE UPHELD T HE ADDITION MADE BY THE A.O. TOWARDS DISALLOWANCE OF CLAIM OF THE AS SESSEE, CONSIDERING THE RENTAL RECEIPTS AS PROPERTY INCOME U/S 22 AS PER SE CTION 14 OF THE I.T. ACT INSTEAD OF BUSINESS INCOME. 3. THE LD. A.R. FOR THE ASSESSEE, AT THE TIME OF HE ARING, SUBMITTED THAT THE ISSUE INVOLVED IN THIS APPEAL I.E. RENT RE CEIPTS FROM LETTING OUT COMMERCIAL PROPERTIES IS ASSESSABLE UNDER THE HEAD INCOME FROM BUSINESS OR PROFESSION OR UNDER THE HEAD INCOME FR OM HOUSE PROPERTY HAS BEEN CONSIDERED BY THIS TRIBUNAL, IN ASSESSEES OWN CASE IN ITA NO.275/VIZAG/2012 DATED 19.2.2016 FOR THE ASSESSMEN T YEAR 2008-09, WHEREIN THE COORDINATE BENCH, HELD THAT RENTAL INCO ME RECEIVED BY THE ASSESSEE FROM LETTING OUT COMMERCIAL PROPERTIES IS ASSESSABLE UNDER THE HEAD INCOME FROM PROFITS AND GAINS OF BUSINESS OR PROFESSION. ON THE OTHER HAND, THE LD. D.R. STRONGLY SUPPORTED ASSESSM ENT ORDER. ITA NO.335/VIZAG/2016 SRI BHARATHI WARE HOUSING CORPORATION, GUNTUR 4 4. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE FACTUAL MATRIX OF THE CASE WHICH LEADS TO ADDITIONS TOWARDS RENTAL INCOME FROM LETTING OUT OF COMMERCIAL PROPERTIES UN DER THE HEAD INCOME FROM HOUSE PROPERTY IS THAT THE ASSESSEE I S INVOLVED IN THE ACTIVITY OF TAKING LANDS LEASE AND CONSTRUCTION OF COMMERCIAL BUILDINGS AND LET OUT THE SAME ON MONTHLY RENTAL. THE ASSESS EE HAS CONSIDERED RENTAL RECEIPTS UNDER THE HEAD INCOME FROM BUSINES S. THE A.O. ASSESSED RENTAL RECEIPTS UNDER THE HEAD INCOME FRO M HOUSE PROPERTY. THE LD. A.R. FOR THE ASSESSEE, AT THE TIME OF HEARI NG, SUBMITTED THAT THE ISSUE HAS BEEN COVERED BY THE ASSESSEES OWN CASE F OR THE ASSESSMENT YEAR 2008-09 IN ITA NO.275/VIZAG/2012 DATED 19.2.20 16. WE, FIND THAT THE COORDINATE BENCH OF THIS TRIBUNAL, UNDER SIMILA R CIRCUMSTANCES HELD THAT RENTAL INCOME FROM LETTING OUT COMMERCIAL PROP ERTIES IS ASSESSABLE UNDER THE HEAD INCOME FROM PROFITS AND GAINS OF BU SINESS OR PROFESSION BUT NOT UNDER THE HEAD INCOME FROM HOU SE PROPERTY. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED HEREUNDE R: 10. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MA TERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE ASSESSEE IS SRI BHARATI WAREHOUSING CORPORATION E XISTED BY VIRTUE OF PARTNERSHIP DEED DATED 21.1.2000. AS PER THE PARTN ERSHIP DEED, THE OBJECT OF THE FIRM IS THE NATURE OF BUSINESS IS TO CONSTRUCT GODOWNS OR RESIDENTIAL OR COMMERCIAL BUILDINGS OR FLATS OR COM MERCIAL SHOPS, ETC. ON LANDS OWNED BY THE FIRM OR BY TAKING LAND ON LONG L EASE BASIS FROM OTHERS, AS MUTUALLY AGREED UPON FROM TIME TO TIME, AND LEAS E OUT THE SAME TO OTHERS. IT IS ALSO MUTUALLY AGREED THAT ANY OTHER BUSINESS ALSO MAY BE ITA NO.335/VIZAG/2016 SRI BHARATHI WARE HOUSING CORPORATION, GUNTUR 5 CARRIED WITH THE MUTUAL CONSENT OF ALL THE PARTNERS IF DEEMED LUCRATIVE. FROM THE ABOVE, IT IS CLEAR THAT THE INTENTION OF T HE ASSESSEE IS TO ACQUIRE THE LAND BY ITS OWN OR BY LEASE OUT THE LAND FOR A LONGER PERIOD AND THERE AFTER CONSTRUCT A BUILDING AND LEASE OUT THE SAME T O THE THIRD PARTIES. THIS IS THE ACTIVITY OF THE ASSESSEE. IN THE ASSESSMENT ORDER, THE A.O. HAS NOTED THAT THE ASSESSEE HAS LEASED OUT NEAR ABOUT 4 PROPERTIES ONE TO STANDARD CHARTERED BANK, MUMBAI, SECOND TO BATA INDI A LIMITED, CALCUTTA, THIRD TO EDS ELECTRONIC DATA SYSTEMS INDIA (P) LIMI TED AND FOURTH TO FOOD WORLD SUPER MARKET (SPENCER) LIMITED, THOUGH THE N ATURE OF THE BUSINESS OF THE ASSESSEE IS AS PER THE PARTNERSHIP DEED TO CONSTRUCT THE GODOWNS OR RESIDENTIAL OR COMMERCIAL BUILDINGS OR FLATS OR COMMERCIAL SHOPS ON LAND OWNED BY THE FIRM BY TAKING LAND ON LEASE BASIS FRO M OTHERS, LEASED OUT OR SALE TO OTHERS, BESIDES CONDUCTING THE TOBACCO BUSI NESS, CAME TO A CONCLUSION THAT THE INCOME RECEIVED BY THE ASSESSEE IS AN INCOME FROM HOUSE PROPERTY AND NOT A BUSINESS INCOME BY FOLLOWI NG CERTAIN JUDICIAL PRECEDENTS. 11. WE FIND THAT THE ASSESSEE FIRM HAS UNDERTAKEN A SYSTEMATIC ACTIVITY I.E. TO TAKE A PROPERTY ON LEASE OR PURCHASE AND CO NSTRUCT A BUILDING AND LEASE OUT THE SAME TO A THIRD PARTY ON COMMERCIAL B ASIS. ACCORDING TO THE ASSESSEE, THE ACTIVITY IS A BUSINESS ACTIVITY AND T HEREFORE THE INCOME DERIVED FROM THE BUSINESS ACTIVITY HAS TO BE TREATE D AS A BUSINESS INCOME NOT INCOME FROM HOUSE PROPERTY. IN THIS CONTEXT, T HE HONBLE SUPREME COURT IN THE CASE OF CHENNAI PROPERTIES (SUPRA) HAS OBSERVED THAT THE MEMORANDUM OF ASSOCIATION OF THE ASSESSEE COMPANY, WHICH IS PLACED ON RECORD MENTIONS MAIN OBJECTS AS WELL AS INCIDENTAL OR ANCILLIARY OBJECTS IN CLAUSE III(A) AND (B) RESPECTIVELY. THE MAIN OBJECT OF THE APPELLANT COMPANY IS TO ACQUIRE AND HOLD THE PROPERTIES KNOWN AS CHENNAI HOUSE AND FIRHAVIN ESTATE BOTH IN CHENNAI AND TO LET OU T THOSE PROPERTIES AS WELL AS MAKE ADVANCES UPON THE SECURITY OF LANDS AN D BUILDINGS OR OTHER PROPERTIES OR ANY INTEREST THEREIN. WHAT WE EMPHAS ISE IS THAT HOLDING THE AFORESAID PROPERTIES AND EARNING INCOME BY LETTING OUT THOSE PROPERTIES IS THE MAIN OBJECTIVE OF THE COMPANY. IT MAY FURTHER B E RECORDED THAT IN THE RETURN THAT WAS FILED, THE ENTIRE INCOME WHICH ACCR UED AND WAS ASSESSED THE SAID RETURN WAS FROM LETTING OUT OF THESE PROPE RTIES. IT IS ALSO RECORDED AND ACCEPTED BY THE ASSESSING OFFICER HIMS ELF IN HIS ORDER. THE HONBLE SUPREME COURT BY CONSIDERING THE EAST INDIA HOUSING & LAND DEVELOPMENT TRUST LTD. VS. CIT (SUPRA) AND ALSO THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF SULTAN BROTHER S PVT. LTD. (SUPRA) HAS HELD THAT LETTING OUT OF THE PROPERTIES IS IN FACT THE BUSINESS OF THE ASSESSEE, ASSESSEE THEREFORE RIGHTLY DISCLOSED THE INCOME UNDER HEAD INCOME FROM BUSINESS IT CANNOT BE TREATED AS AN INCOME FROM HOUSE PROPERTY AND APPEAL FILED BY THE ASSESSEE IS ALLOW ED. 12. IN THE PRESENT CASE, THE ASSESSEE HAS ACQUIRED T HE LAND ON LEASE BASIS IN VARIOUS PLACES I.E. MUMBAI, KOLKATA, BANGA LORE, CHENNAI AND CONSTRUCTED COMMERCIAL COMPLEXES AND LEASED OUT THE SAME TO THE COMMERCIAL ENTREPRENEURS SUCH AS STANDARD CHARTERED BANK, BATA INDIA LIMITED, EDS ELECTRONIC DATA SYSTEMS INDIA (P) LTD. AND SPENCERS FOR A ITA NO.335/VIZAG/2016 SRI BHARATHI WARE HOUSING CORPORATION, GUNTUR 6 HIGHER RENTAL AMOUNT. THE INTENTION OF THE ASSESSE E IS VERY CLEAR FROM THE DATE ON WHICH IT IS EXISTED IS TO CARRY OUT THE BUS INESS ACTIVITY SUCH AS TO CONSTRUCT THE GODOWNS OR RESIDENTIAL OR COMMERCIAL BUILDINGS OR COMMERCIAL SHOPS, ETC. THE LANDS OWNED BY FIRM OR BY TAKING LAND ON LONG LEASE FROM OTHERS IS THE ACTIVITY OF THE ASSES SEE. IN OUR OPINION, THE JUDGEMENT OF THE HONBLE SUPREME COURT SQUARELY APP LIES TO THE FACTS OF THE CASE AND WE HOLD THAT THE INCOME EARNED BY THE ASSESSEE IS INCOME FROM BUSINESS AND NOT INCOME FROM HOUSE PROPERTY. 13. SO FAR AS THE ORDER OF THE ITAT IN THE ASSESSEE S OWN CASE (SUPRA) IS CONCERNED, THE TRIBUNAL HAS OBSERVED THAT ASSESS EE HAS CONSTRUCTED ITS PROPERTIES AT VARIOUS PLACES AND LET OUT TO DIFFERE NT TENANTS FOR A LONGER PERIOD, IT CANNOT BE INFERRED THAT THE ACTIVITY OF THE ASSESSEE IS A BUSINESS ACTIVITY. SO FAR AS THE ABOVE OBSERVATION OF THE T RIBUNAL IS CONCERNED, THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. S. PREMALATHA 367 ITR 298 (AP) HAS OBSERVED THAT THE LEASE WAS FOR A FAIRLY LONGER PERIOD DOES NOT BRING ABOUT ANY CHANGE IN THE CHARACTER OF RIGHTS. THE CONSTRUCTION OF THE BUILDING ON THE LAND TAKEN ON LEASE WAS OBVIOUSLY F OR THE PURPOSE OF BUSINESS AND NOT WITH AN INTENTION TO OWN IT. IF TH E INTENTION OF THE RESPONDENT WAS TO OWN THE PROPERTY, THE TRANSACTION WOULD HAVE BEEN DIFFERENT ALTOGETHER. THOUGH THE LEASE WAS ONE OF THE FORMS OF TRANSFER OF PROPERTY, IT DOES NOT LEAD TO CONFERMENT OF RIGHTS OR OWNERSHIP. 14. WE THEREFORE, RESPECTFULLY FOLLOWING THE JUDGEM ENT OF THE HONBLE SUPREME COURT IN THE CASE OF CHENNAI PROPERTIES (SU PRA) THIS APPEAL FILED BY THE REVENUE IS DISMISSED. 5. THE REVENUE HAS FILED APPEAL AGAINST ORDER OF TH E TRIBUNAL, CHALLENGING THE ISSUE BEFORE THE HONBLE HIGH COURT OF TELANGANA & A.P. THE HONBLE HIGH COURT, IN ITTA NO.667 OF 2010 DATE D 31.1.2007 DISMISSED APPEAL FILED BY THE ASSESSEE BY OBSERVING AS UNDER: WE HAVE PERUSED THE IMPUGNED ORDER AND ALSO THE PA RTNERSHIP DEED DATED 21.01.2000 OF THE ASSESSEE FIRM, A COPY OF WHICH WA S FILED BY THE APPELLANT AS PART OF THE MATERIAL PAPERS. THE PARTNERSHIP DEED WOULD SHOW THAT THREE PARTNERS CONSTITUTED A PARTNERSHIP FIRM NAMELY SRI BHARATHI WAREHOUSING CORPORATION BY VIRTUE OF PARTNERSHIP DEED DATED 21.01.2000. IN IT , THEY GOT IT MENTIONED THAT THE PARTNERSHIP BUSINESS SHALL BE CARRIED ON UNDER THE NAME AND STYLE OF BHARATHI WAREHOUSING CORPORATION, GUNTUR AND THE PARTNERSHIP WAS AT WILL. REGARDING THE NATURE OF THE BUSINESS TO BE CARRIED ON BY THE SAID FIRM, IT WAS MENTIONED THAT THE FIRM WAS TO CONSTRUCT GODOWNS OR RESIDENTIAL OR COM MERCIAL BUILDINGS OR FLATS OR COMMERCIAL SHOPS ETC, ON THE LANDS EITHER OWNED BY THE FIRM OR BY TAKING LAND ON LONG LEASE FROM OTHERS AND LEASE OUT THE SAME TO OT HERS. IT WAS ALSO MENTIONED THAT ITA NO.335/VIZAG/2016 SRI BHARATHI WARE HOUSING CORPORATION, GUNTUR 7 ANY OTHER BUSINESS ALSO MAY BE CARRIED ON WITH THE MUTUAL CONSENT OF ALL THE PARTNERS IF DEEMED LUCRATIVE. A) THUS A CLOSE SCRUTINY OF THE ABOVE TERMS WOULD UNHE SITATINGLY MANIFEST THAT THE MAIN OBJECTIVE OF THE PARTNERSHIP FIRM WAS TO CARRY ON THE BUSINESS IN CONSTRUCTION OF GODOWNS, RESIDENTIAL OR COMMERCIAL BUILDINGS OR FLATS OR COMMERCIAL SHOPS ETC., ON THE LANDS EITHER OWNED BY THE FIRM OR BY TAKING ON LONG LEASE BASIS FROM OTHERS AND LEASE OU T THE SAME TO OTHERS. THE TERMS WOULD FURTHER SIGNIFY THAT DOING OF ANY O THER BUSINESS WAS ONLY ANCILLIARY TO THE MAIN BUSINESS AND THAT TOO AN OPT IONAL ONE WHICH IS EVIDENT FROM THE CLAUSE ANY OTHER BUSINESS ALSO MA Y BE CARRIED ON WITH THE MUTUAL CONSENT OF ALL THE PARTNERS IF DEEMED LU CRATIVE. NON- MENTIONING OF SPECIFIC TYPE OF BUSINESS AND DOING O F SUCH UNSPECIFIED BUSINESS, ONLY IF THE PARTNERS DEEMED IT LUCRATIVE, WOULD INDICATE THAT THE UNSPECIFIED BUSINESS PROPOSED TO BE CARRIED ON WITH MUTUAL CONSENT WAS ONLY AN OPTIONAL BUT NOT THE MAIN OBJECTIVE OF THE PARTNERSHIP FIRM. THUS THE OPTIONAL BUSINESS PROPOSED WAS NOT AS CLEAR AND EMPHATIC AS THAT OF THE MAIN BUSINESS. B) BE THAT AS IT MAY, ADMITTEDLY DURING THE ASSESSMENT PERIOD UNDER SCRUTINY, THE ASSESSEE FIRM EARNED INCOME IN TOBACCO BUSINESS AS WELL AS BY RENTS. HENCE THE POINT WAS WHETHER THE ASSESSEE FIRM UNDER LAW, WAS ENTITLED TO SHOW BOTH THE INCOMES UNDER THE HEAD INCOME FROM BU SINESS OR UNDER TWO DIFFERENT HEADS I.E., INCOME FROM BUSINESS AND PROFESSION AND INCOME FROM HOUSE PROPERTY. C) IN M/S. CHENNAI PROPERTIES & INVESTMENTS LTD., CHENN AIS CASE (SUPRA), THE BRIEF FACTS WERE THAT THE APPELLANT-ASSESSEE WA S A COMPANY AND ITS MAIN OBJECTIVE AS STATED IN ITS MEMORANDUM OF ASSOC IATION WAS TO ACQUIRE THE PROPERTIES IN CITY OF MADRAS AND TO LET OUT THO SE PROPERTIES. THE ASSESSEE SHOWED ITS RENTAL INCOME AS INCOME FROM BU SINESS IN ITS RETURN. HOWEVER, THE ASSESSING OFFICER COMPUTED IT UNDER TH E HEAD RENTAL INCOME. THE APPEAL PREFERRED BY THE ASSESSEE BEFORE THE COM MISSIONER OF INCOME TAX (APPEALS) WAS ALLOWED. AGGRIEVED, THE DEPARTME NT FILED APPEAL BEFORE THE ITAT AND THE SAME WAS DISMISSED. THEN T HE DEPARTMENT APPROACHED THE HIGH COURT AND ITS APPEAL WAS ALLOWE D BY THE HIGH COURT HOLDING THAT THE INCOME TAX DERIVED BY LETTING OUT T HE PROPERTIES WOULD NOT BE THE INCOME FROM BUSINESS BUT THE INCOME FROM HOUSE PROPERTY. THE ASSESSEE THEN CARRIED THE MATTER TO THE APEX CO URT. CONSIDERING ITS EARLIER JUDGEMENTS, THE APEX COURT OBSERVED THE DEC IDING FACTOR WAS NOT THE OWNERSHIP OF THE LANDS OR LEASE BUT THE NATURE OF THE ACTIVITY OF THE ASSESSEE AND THE NATURE OF THE OPERATIONS IN RELATI ON TO THEM AND ULTIMATELY HELD, THAT THE LETTING OF THE PROPERTIES WAS IN FACT THE BUSINESS OF THE ASSESSEE AND THEREFORE, THE ASSESSEE RIGHTLY DISCLOSED THE INCOME UNDER THE HEAD INCOME FROM BUSINESS AND ACCORDINGLY , ALLOWED THE APPEAL. D) APPLYING THE ABOVE RATIO TO THE INSTANT CASE, IT CA N BE EMPHATICALLY SAID THAT THE MAIN OBJECTIVE OF THE ASSESSEE FIRM AS MAN IFEST FROM THE PARTNERSHIP DEED WAS TO CARRY ON BUSINESS IN CONSTR UCTION OF DIFFERENT TYPES OF BUILDINGS SUCH AS GODOWNS, RESIDENTIAL OR COMMERCIAL BUILDINGS, ITA NO.335/VIZAG/2016 SRI BHARATHI WARE HOUSING CORPORATION, GUNTUR 8 FLATS, SHOPS ETC., AND LEASE THEM OUT AS A PART OF ITS BUSINESS ACTIVITY BUT NOT AS EXPLOITATION OF THE PROPERTY AS ON OWNER. IN SIMPLE, CONSTRUCTION OF DIFFERENT TYPES OF BUILDINGS AND LEASING THEM OUT W AS THE MAIN BUSINESS ACTIVITY OF THE FIRM AND DOING OTHER ACTIVITY WAS O NLY AN OPTIONAL ONE. IN THAT VIEW, THE ASSESSEE FIRM WAS RIGHT IN SHOWING I TS BOTH INCOMES UNDER THE HEAD INCOME FROM BUSINESS. THEREFORE, WE FIND N O MERIT IN THE ARGUMENT OF LEARNED STANDING COUNSEL THAT THE RENTA L INCOME SHOULD BE SHOWN UNDER A DIFFERENT HEAD. WE ALSO DO NOT FIND ANY MERIT IN THE OTHER ARGUMENT THAT SINCE THE TRIBUNAL HAS HELD IN THE PR EVIOUS INSTANCES THAT THE INCOME RECEIVED BY THE SAME ASSESSEE WAS THE IN COME FROM HOUSE PROPERTY AND NOT A BUSINESS INCOME, IN THE INSTANT CASE ALSO IT SHOULD HAVE HELD SIMILARLY, FOR THE REASON THAT IN THE EARLIER INSTANCES, THE TRIBUNAL HAD NO OCCASION TO PERUSE THE JUDGEMENT IN M/S. CHENNAI PROPERTIES & INVESTMENTS LTD., CHENNAIS CASE (SUPRA) WHICH WAS R ENDERED BY THE APEX COURT ON 9.4.2015. 7) AT THE OUTSET, WE DO NOT FIND ANY SUBSTANTIAL QUESTIONS OF LAW INVOLVED IN THIS APPEAL. ACCORDINGLY, THIS APPEAL IS DISMIS SED AT THE ADMISSION STAGE. 6. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THIS CASE AND ALSO RESPECTFULLY FOLLOWING THE DECISION OF TELENGANA AN D A.P. HIGH COURT, IN ASSESSEES OWN CASE AND ALSO FOLLOWING THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL, IN ASSESSEES OWN CASE FOR THE AS SESSMENT YEAR 2008- 09, WE ARE OF THE VIEW THAT THE RENTAL RECEIPT FROM LETTING OUT COMMERCIAL PROPERTIES IS ASSESSABLE UNDER THE HEAD INCOME FROM PROFIT & GAINS OF BUSINESS OR PROFESSION AND NOT AS INCO ME FROM HOUSE PROPERTY. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. 8. THE ASSESSEE HAS FILED CROSS OBJECTION IN SUPPOR T OF ORDER OF THE CIT(A). THEREFORE, FOR THE DETAILED DISCUSSION IN PRECEDING PARAGRAPHS, WE DISMISS CROSS OBJECTION FILED BY THE ASSESSEE AS NOT MAINTAINABLE. ITA NO.335/VIZAG/2016 SRI BHARATHI WARE HOUSING CORPORATION, GUNTUR 9 9. IN THE RESULT, THE CROSS OBJECTION FILED BY THE ASSESSEE IS ALSO DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 28 TH APR17. SD/- SD/- ( . ) ( . ) (V. DURGA RAO) (G. MANJUNATHA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 28.04.2017 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE ACIT, CIRCLE-2(1), GUNTUR 2. / THE RESPONDENT SRI BHARATHI WARE HOUSING CORPO RATION, D.NO.8-24-31, MANGALAGIRI ROAD, GUNTUR 3. + / THE CIT, GUNTUR 4. + ( ) / THE CIT (A)-1, GUNTUR 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY //