ACIT, Coimbatore V. M/s. Sakthi Fiannce Limited, Coimbatore

ITA 397/CHNY/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6240 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-04-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 24-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAM
• Assessee Lawyers: SAROJ KUMAR
• Keywords: Business income; Reasonable cause; Condonation of delay
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . . ! , ' $ BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./I.T.A.NO.397/ MDS/2012 ( / ASSESSMENT YEAR: 2008-09) ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I(1) 63, RACE COURSE, COIMBATORE-641 018. VS M/S. SAKTHI FINANCE LTD. 475,DR.NANJAPPA ROAD, COIMBATORE-641 018. PAN:AADCS0656G ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. GURU BHASHYAM, JCIT /RESPONDENT BY : MR. SAROJ KUMAR, ADVOCATE / DATE OF HEARING : 30 TH APRIL, 2014 /DATE OF PRONOUNCEMENT : 13 TH JUNE, 2014 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS)-I, COIMBAT ORE DATED 03.11.2011 FOR THE ASSESSMENT YEAR 2008-09 R AISING THE FOLLOWING GROUNDS:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF F INANCIAL CHARGES RELATING TO PROVISION FOR NON - PERFORMING ASSETS . ITA NO.397/MDS/2012 2 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEA L S) OUGHT TO HAVE CONS I DERED THAT THE F I NANCE CHARGES ON NPAS SHOULD HAVE BEEN TAXED ON ACCRUA L BASIS AND NOT ON RECEIPT BASIS WHILE DELETING THE ADDITION MADE O N ACCOUNT OF THE ACCRUED INTEREST ON NPAS IN HIRE PUR CHASE TRANSACT I ONS. 3. THE LEARNED COMMISS I ONER OF INCOME TAX (APPEA L S) FA I LED TO CONSIDER THE HON ' BLE SUPREME COURT OF INDIA DECISION IN THE CASE OF CIT VS. SOUTHERN TECHNOLOGI ES REPORTED IN 320 ITR 577 WHEREIN IT I S HELD THAT ALTHOUGH NBFC DO PROVIDE FOR DEBIT OF PROVISION FOR NON - PERFORMING ASSETS IN THE P&L ACCOUNT, THEY ARE CONFINED TO PRESENTATION / DISCLOSURE AND HAVE NOTHING TO DO W ITH THE COMPUTATION OF INCOME UNDER THE INCOME TAX ACT. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPE A L S) ERRED I N TREATING THE RENTAL RECEIPTS AS INCOME FROM HOUSE PROPERTY. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) OUGHT TO HAVE OBSERVED THAT THE ASSESSEE HAS NOT BR OUGHT ON RECORD ANY MATERIA L TO SUBSTANTIATE THAT THE LET OUT PROPERTY IS PART OF THE TRADING OPERATION OF THE AS SESSEE. 2. THE APPEAL OF THE REVENUE IS TIME BARRED BY 13 D AYS. THE DEPARTMENT FILED AN AFFIDAVIT EXPLAINING REASO NS FOR DELAY IN FILING OF APPEAL AND PRAYS FOR CONDONATION OF DE LAY. WE HAVE PERUSED THE REASONS AND ARE SATISFIED THAT TH ERE IS A REASONABLE CAUSE FOR THE DELAY IN FILING OF THE APP EAL. IN THE INTEREST OF JUSTICE, WE CONDONE THE DELAY OF THIRTE EN DAYS IN ITA NO.397/MDS/2012 3 FILING OF THE APPEAL. THE PETITION FOR CONDONATION OF DELAY IS THUS, ALLOWED AND THE APPEAL IS ADMITTED. 3. ALL THESE GROUNDS ARE WITH REFERENCE TO TWO ISSU ES. THE FIRST ISSUE IS IN RESPECT OF DELETION OF ADDITION MADE ON ACCOUNT OF FINANCIAL CHARGES RELATING TO PROVISION FOR NON- PERFORMING ASSETS AND THE SECOND ISSUE IS AGAINST TREATING THE RENTAL RECEIPTS AS INCOME FROM HOUSE PROPERTY. 4. DEPARTMENTAL REPRESENTATIVE SUPPORTS THE ORDER O F ASSESSING OFFICER. 5. COUNSEL FOR THE ASSESSEE SUBMITS THAT BOTH THE I SSUES HAVE BEEN DECIDED BY THIS TRIBUNAL IN ASSESSEES OW N CASE FOR THE ASSESSMENT YEAR 2009-10 IN ITA NO.1816/MDS /2012 DATED 21 ST MARCH, 2014 AND COPY OF THE ORDER IS PLACED ON RECORD. 6. WE HAVE GONE THROUGH THE ORDER OF THE CO-ORDINAT E BENCH OF THIS TRIBUNAL DATED 21.03.2014 IN ITA NO.1816/MDS/2012 FOR THE ASSESSMENT YEAR 2009-10 AN D FIND ITA NO.397/MDS/2012 4 THAT BOTH THESE ISSUES HAVE BEEN CONSIDERED AND DEC IDED IN FAVOUR OF THE ASSESSEE BY DISMISSING THE APPEAL OF THE REVENUE OBSERVING AS UNDER:- 2. THE FIRST ISSUE IN THE GROUNDS OF APPEAL OF TH E REVENUE IS THAT COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN ALLOWING THE CLAIM OF PROVISION FOR NON-PE RFORMING ASSETS AS DEDUCTION. THE COUNSEL FOR THE ASSESSEE R EFERRING TO PAGES 1 TO 8 OF THE PAPER BOOK SUBMITS THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISIONS OF THE CO-ORDINAT E BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASS ESSMENT YEARS 2000-01 TO 2007-08. ON READING OF THE DECISIO N OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL, WE FIND THAT TH E ISSUE IN APPEAL REGARDING CLAIM FOR DEDUCTION OF PROVISION F OR NON- PERFORMING ASSETS HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE IN ITA NOS. 1646 TO 1648/MDS/2010 FOR THE ASSESSMENT YEARS 2003-04 , 2004-05 & 2007-08 BY ORD ER DATED 16.12.2010 OBSERVING AS UNDER:- 2. SHORT FACTS APROPOS ARE THAT THE ASSESSING OFFICER HAD CONSIDERED THE FINANCE CHARGES ON NON- PERFORMING ASSETS (NPAS) ON ACCRUAL BASIS FOR ALL T HE IMPUGNED ASSESSMENT YEARS. ASSESSEE DURING THE PREV IOUS YEARS RELEVANT TO THE IMPUGNED ASSESSMENT YEARS DID NOT SHOW ANY INCOME ON FINANCE CHARGES RELATING TO NPAS . PROVISION FOR NPAS WAS NOT CHARGED BY THE ASSESSEE TO ITS PROFIT & LOSS ACCOUNT NOR WAS FINANCE CHARGES ON SU CH NPAS CREDITED AS ACCRUED INCOME. A.O. WAS OF THE OPINION THAT SINCE ASSESSEE ITSELF HAD NOT CONSIDERED PROVISION FOR NPAS AS A LIABILITY, IT WAS BOUND TO SHOW THE ACCRUED FI NANCIAL CHARGES AS PART OF ITS INCOME. IN ITS APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ASSESSEE RELY ING ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS.ELGI FINANCE LTD. (2007) 293 ITR 357 ARGUED THAT ASSESSEE BEING AN NBFC GOVERNED BY THE NORMS PRESCR IBED BY RBI HAD TO FOLLOW ITS REGULATIONS EVEN THOUGH IT WAS MANAGING ITS BOOKS ON MERCANTILE SYSTEM. COMMISSION ER OF INCOME TAX (APPEALS) AFTER CONSIDERING THE NBFCS PRUDENTIAL NORMS (RESERVE BANK) DIRECTIONS, 1988 AN D RELYING ON THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF ELGI FINANCE LTD. (SUPRA) AND THE DECIS ION OF HONBLE APEX COURT IN THE CASE OF SOUTHERN TECHNOLO GIES VS. JCIT (320 ITR 577) HELD THAT INTEREST ON NON-PE RFORMING ASSETS WAS NOT TO BE INCLUDED IN THE TOTAL INCOME O F THE ITA NO.397/MDS/2012 5 ASSESSEE ON ACCRUAL BASIS EVEN THOUGH THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTS. 3. NOW BEFORE US, THE LEARNED AR SUBMITTED THAT THE ISSUE BEFORE THE APEX COURT IN THE CASE OF SOUTHERN TECHNOLOGIES (SUPRA) WAS WITH REGARD TO PROVISIONIN G MADE FOR NON-PERFORMING ASSETS AND IT COULD NOT BE EXTEN DED TO INTEREST ACCRUED ON NON-PERFORMING ASSETS. LEARNED DEPARTMENTAL REPRESENTATIVE FURTHER SUBMITTED THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF HONBLE MAD RAS HIGH COURT IN THE CASE OF CIT VS. ELGI FINANCE LTD. (SUPRA) AS ALSO THE DECISIONS OF THIS TRIBUNAL IN THE CASE OF ELGI FINANCE LTD. AND SAKTHI FINANCE LTD. FOR ASSESSMENT YEARS 1995-96 TO 1998-99 IN ITA NOS.1879 TO 1881/MDS/2004 AND ITA NOS.3409 TO 3411/MDS/2004 DATED 11 TH JUNE, 2010. 4. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE ISSUE IS SQUARELY COV ERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF JURISDICT IONAL HIGH COURT IN ASSESSEES OWN CASE REPORTED IN 293 ITR 35 7. IT WAS HELD BY HONBLE JURISDICTIONAL HIGH COURT THAT INTEREST ON NON-PERFORMING ASSETS WAS TO BE CONSIDERED ONLY AFT ER RECOGNIZING THE INCOME FROM SUCH ASSETS. IN ADDITIO N TO THAT WE ALSO FIND THAT HONBLE DELHI HIGH COURT IN THE C ASE OF CIT VS. M/S.VASISTH CHAY VYAPAR LTD. BY ORDER DATED 29. 11.2010 AFTER REFERRING TO THE DECISION OF HONBLE APEX COU RT IN THE CASE OF SOUTHERN TECHNOLOGIES (SUPRA) AS WELL AS TH AT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF EL GI FINANCE LTD. (SUPRA) HELD THAT INTEREST ON NON-PERFORMING A SSETS COULD NOT BE CONSIDERED AS INCOME ON ACCRUAL BASIS. WE, THEREFORE FIND NO MERITS IN THE APPEAL FILED BY THE REVENUE. 3. RESPECTFULLY FOLLOWING THE SAID DECISION, WE DIS MISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE ON THI S ISSUE. 4. THE NEXT ISSUE IN THE GROUNDS OF APPEAL OF THE REVENUE IS THAT COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE THAT RE NTAL RECEIPTS ARE ASSESSABLE UNDER THE HEAD BUSINESS AND NOT UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 5. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT ASSESSI NG OFFICER WHILE COMPLETING THE ASSESSMENT CONSIDERED RENTAL RECEIPTS RECEIVED BY THE ASSESSEE ON LETTING OUT OF PORTION OF BUILDING OF ASSESSEE AS INCOME FROM HOUSE PROPERTY AS AGAINST THE CLAIM MADE BY THE ASSESSEE THAT RENT SH OULD BE ASSESSED AS INCOME FROM BUSINESS. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF ASSESSING OFF ICER IN ASSESSING RENTAL INCOME UNDER THE HEAD INCOME FROM HOUSE ITA NO.397/MDS/2012 6 PROPERTY. 6. COUNSEL FOR THE ASSESSEE SUBMITS THAT ASSESSEE H AS RECEIVED RENTAL INCOME FOR THE YEAR ENDED 31.3.2009 FROM THE PROPERTIES AND THE PROPERTIES WERE ORIGINALLY INTEN DED FOR HOUSING OFFICERS OF THE ASSESSEE COMPANY TO TAKE CA RE OF ITS REQUIREMENTS OF OFFICE SPACE FOR THE ENVISAGED EXPA NDED BUSINESS PLAN. THE ASSESSEE HAD PLANS TO ENGAGE IN MULTIFARIOUS FINANCIAL ACTIVITIES SUCH AS GOLD LOAN , LEASE FINANCING ETC., THUS PROPERTIES WERE HELD FOR ITS O WN USE. THE COUNSEL SUBMITS THAT INITIALLY ASSESSEE HAD BEEN CONCENTRATING ON HIRE PURCHASE FINANCIAL ACTIVITIES ONLY AND THE OTHER FINANCIAL ACTIVITIES WERE TO BE TAKEN UP SUBSEQUENTLY AND IN ORDER TO EXPLOIT THE BUSINESS A SSET, THE ASSESSEE HAD LET THESE PROPERTIES ON RENT TO OTHER COMPANIES. THE COUNSEL FINALLY SUBMITS THAT COMMISS IONER OF INCOME TAX (APPEALS) IS CORRECT IN ALLOWING THE CLA IM OF THE ASSESSEE THAT RENTAL RECEIPTS SHOULD BE ASSESSED AS BUSINESS INCOME INSTEAD OF INCOME FROM HOUSE PROPER TY. THE COUNSEL ALSO RELIED ON THE FOLLOWING DECISIONS IN S UPPORT OF HIS ABOVE CONTENTIONS: 1. UNIVERSAL PLAST LTD. VS. CIT 237 ITR 454 (SC) 2. CIT VS. VST MOTORS LTD. 226 ITR 155(MAD) 3. SCIENTIFIC INSTRUMENT COMPANY LTD. VS. CIT (202 TAXMAN 536 (ALL) 7. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHORITIES AND THE CASE LAWS RELIED ON. IT IS NOT IN DISPUTE THAT THE ASSESSEE ALL ALONG OFFERING RENTAL INCOME FROM THE PROPERTY LET OUT UNDER THE HEAD INCOME FROM BUSINE SS AND SUCH POSITION SUBSISTED WELL OVER A DECADE. IN ALL THE SCRUTINY ASSESSMENTS COMPLETED IN THE CASE OF THE ASSESSEE, REVENUE ACCEPTED THE ASSESSEES STAND THAT INCOME E ARNED FROM THESE PROPERTIES WOULD BE ASSESSABLE UNDER THE HEAD INCOME FROM BUSINESS. PROPERTIES WERE ORIGINALLY INTENDED FOR HOUSING OFFICE USE OF THE ASSESSEE TO TAKE CARE OF ITS REQUIREMENTS OF OFFICE SPACE FOR THE ENVISAGED EXPA NDED BUSINESS. THE ASSESSEE COMPANY HAD PLANNED TO ENGA GE IN MULTIFARIOUS FINANCIAL ACTIVITIES SUCH AS GOLD LOAN , LEASE FINANCING ETC. THEREFORE, PROPERTIES WERE HELD BY THE COMPANY FOR ITS OWN USE. SO, IN ORDER TO EXPLOIT TH E BUSINESS ASSET, COMPANY HAD LET THESE PROPERTIES ON RENT TO OTHER COMPANIES. THE ASSESSING OFFICER WHILE COMPLETING T HE ASSESSMENT TREATED THE RENT RECEIVED BY THE ASSESSE E FROM THE ASSETS AS INCOME FROM HOUSE PROPERTY STATING TH AT AS PER ITA NO.397/MDS/2012 7 THE PROVISIONS OF THE ACT, RENTAL INCOME IN ITS NOR MAL CONNOTATION HAS TO BE ASSESSED AS INCOME FROM HOUSE PROPERTY. THEREFORE, HE ASSESSED THE INCOME AS INCO ME FROM HOUSE PROPERTY INSTEAD OF INCOME FROM BUSINESS. TH E COMMISSIONER OF INCOME TAX (APPEALS) ON EXAMINING T HE FACTS, SUBMISSIONS OF THE ASSESSEE AND THE CASE LAW S HELD THAT THE INCOME RECEIVED BY THE ASSESSEE FROM EXPLO ITING BUSINESS ASSETS OF THE ASSESSEE IS TO BE ASSESSED A S INCOME FROM BUSINESS AND NOT UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE COMMISSIONER OF INCOME TAX (AP PEALS) ALSO OBSERVED THAT IN EARLIER YEARS, THE ASSESSEE W AS OFFERING RENTAL INCOME UNDER THE HEAD INCOME FROM BUSINESS AND THIS HAS BEEN ACCEPTED BY THE ASSESSING OFFICER IN THE SCRUTINY ASSESSMENT COMPLETED UNDER SECTION 143(3) ON SIMILAR SET OF FACTS. 8. MORE OR LESS AN IDENTICAL ISSUE CAME UP BEFORE T HE JURISDICTIONAL HIGH COURT IN THE CASE OF VST MOTORS LTD. (SUPRA). IN THIS CASE, THE ASSESSEE WAS A COMPANY CARRYING ON BUSINESS AS AUTHORIZED DEALERS IN TATA DIESEL VE HICLES IN A BUILDING ON MOUNT ROAD BUILDING CONSISTED OF THR EE FLOORS INCLUDING GROUND FLOOR. THE GROUND FLOOR & FIRST FL OOR WERE USED FOR ASSESSEES BUSINESS AND SECOND FLOOR WAS L ET OUT TO A GOVERNMENT DEPARTMENT. THE ASSESSEE CLAIMED RENTA L RECEIPTS AS BUSINESS INCOME AS PROPERTY HAS BEEN CONSTRUCTED WITH A VIEW TO USE THE SAME FOR THE PUR POSE OF ITS BUSINESS AND THAT SURPLUS ACCOMMODATION DUE TO SHIF TING OF ITS BRANCHES OUTSIDE CHENNAI WAS LET OUT. THE ASSES SING OFFICER REJECTED THE CONTENTION AND TREATED THE INC OME UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE HONBLE HIGH COURT HELD THAT RENTAL INCOME DERIVED THEREFROM BY THE ASSESSEE WAS RIGHTLY ASSESSABLE UNDER THE HEAD BUS INESS INCOME OBSERVING AS UNDER:- H E LD THA T INASMUC H AS T H E BU I LDING IN QUESTION ON MOUNT R OAD WAS A C OMM E RCIAL ASSET, T H E ASSESSEE C O U L D EX PLOI T IT EIT H ER B Y I TSEL F OR B Y L E TTING I T TO OTH E RS . THEREFORE, IN A MATTER LIKE T HIS TH E FUNDAME N TAL POSI T ION THAT H AD T O B E AS CE RTAIN E D WAS WHETHER A PARTICULAR BUILDING OR PREMISES W A S A C OMMERCIA L ASSET OR A HOUSE PROPE R TY . I F T H E PR E M ISES WERE A C OMMERC IAL ASSE T , T HEN T H E INCOME DERIVED THERE FROM WOULD AMOUNT TO BUSINESS INC OM E, O T H ER WISE IT WOULD B E INCOME DERIVED FROM PROPERTY ASS E SS ABL E U NDER TH E HEAD 'PROP E RTY INCOME ' . ON T H E FACTS, THE TRIBUNAL HAD FOUN D IN TH E PR ESE NT CAS E THAT T HE PROPERTY IN QUESTION WAS A C OM MERCIA L A S SE T , W HICH WAS USED BY THE ASSESSEE AS SUCH IN THE BEGINNING AN D LAT ER O N A FT E R SHIFT I NG I TS BRANC H ES TO O UTSIDE STAT I ONS, THE SECOND F L OOR HAD BECOME SUR PL US AND W AS EXPLOITED BY THE ASSESSEE BY ITA NO.397/MDS/2012 8 LETT I NG IT OUT TO OTH E RS. THEREFORE, TH E RE NTAL INCOME DERIVED THEREFROM WAS RIGHTLY ASSESS AB L E UND E R THE HEAD 'BUSINESS INCOME'. 9. THE HONBLE ALLAHABAD HIGH COURT ON A SIMILAR IS SUE IN THE CASE OF SCIENTIFIC INSTRUMENT COMPANY LTD. V S. CIT (SUPRA) HELD AS UNDER:- ALL THE ASSETS OF THE BUSINESS WERE NOT RENTED OUT BY THE APPELLANT COMPANY. IT WAS DOING THE MAIN BUSINESS O F MANUFACTURES, IMPORTS , PURCHASES AND DEAL I NG I N SCIENTIFIC APPARATUS, CHEMICALS, CHEM I CAL PRODUCTS, ART I CLES OF GLASS, METAL, WOOD, PAPER ETC . , MORE OR LESS CONNECTED WITH SCIENCE, AS GIVEN IN THE MEMORANDUM OF ASSOCIATION . OUT OF THE THREE PROPER T IES AT MUMBA I, THE PROPERTY IN D I SPUTE WAS BEI NG USED FOR ITS REGIONAL OFF I CE. IN THE INTERE S T OF THE COMPANY, I T DECIDED TO LET OUT ONE OF ITS PROPERTIES, TO THE CI TY BA N K, BY WAY OF E X PLO I TATION OF BUSINESS ASSETS, F OR MAK I NG P ROFIT . THE ASSETS WERE LET OUT, WHILE CARRYING OUT OTHE R BUS I NESS ACTIVITIES . THERE WAS NOTHING ON RECORD, TO SHOW THA T THE APPELLANT HAD SOLD AWAY THE PROPERTIES OR ABANDONED ITS BUS I NESS ACTIVITIES . IN THE C I RCUMSTANCES, IN ORDER TO E X PLOIT BUS I NESS ASSETS, AS A PRUDENT BUSINESS DECISION , THE APPELLANT T OO K IN TE R EST FREE LOAN FROM THE CITY BANK, RENTED OU T, ONE OF I TS PROPERTI E S TO I T, AND SHIFTED ITS REGI O NAL O FF I CE . IN T HIS COMMERC I A L V E NTUR E, T H E APPELLANT R EC E I VED A HI G HER I N C O ME R E GULARLY F RO M ITS COMMERCIAL ASS E T S . TR I BU NAL WAS L E G A LL Y N OT COR RE C T I N HO L D ING THAT THE I N COME E AR NE D B Y THE ASSESSEE FROM L EASIN G OUT O N LEAVE A ND L ICENCE FEE T H E P REM I SES I N QUESTION SHOU L D BE ASSESSED AS INCOME FROM PROPE R TY AND NOT INCOM E FROM B U S I NESS. - UNIVERSAL PLAST LTD. VS . CI T (1999) 1 5 3 CTR ( S C) 95 : ( 1 999) 237 ITR 454 (SC). 10 . IN VIEW OF THE ABOVE DISCUSSIONS IN THE DECISIONS, WE HOLD THAT THE PROPERTY LET OUT BY THE ASSESSEE IN O RDER TO EXPLOIT COMMERCIAL ASSET OF THE ASSESSEE WHICH MEAN T FOR ITS BUSINESS IS ASSESSABLE UNDER THE HEAD INCOME FROM BUSINESS AND NOT UNDER THE HEAD INCOME FROM HOU SE PROPERTY. THIS POSITION WAS ALSO ACCEPTED BY THE DEPARTMENT ITSELF OVER A PERIOD OF DECADE AND THERE FORE THERE IS NO VALID REASON NOT TO CONSIDER THE INCOME FROM EXPLOITATION OF ASSETS BY THE ASSESSEE AS INCOME F ROM BUSINESS. THUS, WE SUSTAIN THE ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS) IN ACCEPTING THE CLAIM OF THE ASSESSEE ON THIS ISSUE. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ON THIS ISSUE ARE REJECTED. ITA NO.397/MDS/2012 9 7. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE CO- ORDINATE BENCH OF THIS TRIBUNAL, WE REJECT THE GROU NDS OF APPEAL RAISED BY THE REVENUE. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY , TH E 13 TH DAY OF JUNE, 2014 AT CHENNAI. SD/- SD/- ( N.S. SAINI ) ( CHALLA NAGENDRA PRASAD ) ( . . ) ( % '( ) ACCOUNTANT MEMBER / * JUDICIAL MEMBER/ ' * ' /CHENNAI, + /DATED, 13 TH JUNE, 2014 SOMU ITA NO.397/MDS/2012 10 -. /. /COPY TO: 1. APPELLANT 2. /RESPONDENT 3. 0 () /CIT(A) 4. 0 /CIT 5. . 4 /DR 6. /GF .