DCIT, CIR-1, SILIGURI, Siliguri V. M/s Gangadhar Developers Pvt. Ltd., Siliguri

ITA 401/KOL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6582 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 10-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Keywords: Business income; Business expenditure; Rule of consistency; Additional evidence
• Section: 143(3); 263

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 401 / KOL / 20 16 & C.O. NO.25/KOL/2016 (A/O ITA NO.401/KOL/2016) ASSESSMENT YEAR:2011-12 DCIT, CIRCLE-1, AAYAKAR BHAWAN, PARIBAHAN NAGAR, MATIGARA, SILIGURI PIN 734010 M/S GANGADHAR DEVELOPERS PVT. LTD., KAPIL CENTRE, 2 ND MILE, SEVOKE ROAD, SILIGURI- 734001 [ PAN NO.AACCG 0424 H ] V/S . V/S . M/S GANGADHAR DEVELOPERS PVT. LTD., KAPIL CENTRE, 2 ND MILE, SEVOKE ROAD, SILIGURI- 734001 DCIT, CIRCLE-1, AAYAKAR BHAWAN, PARIBAHAN NAGAR, MATIGARA, SILIGURI, PIN-734010 /APPELLANT .. / RESPONDENT /BY ASSESSEE SHRI SUBASH AGARWAL, ADVOCATE /BY REVENUE SHRI S. DASGUPTA, ADDL. CIT-DR /DATE OF HEARING 20-02-2018 /DATE OF PRONOUNCEMENT 20-04-2018 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-20, KOLKATA DA TED 10.12.2015 FOR THE ASSESSMENT YEAR 2011-12 AND THE SAME IS BEING DISPO SED OF ALONG WITH CROSS OBJECTION (CO) FILED BY THE ASSESSEE BEING CO NO.25/KOL/2016. SHRI S. DASGUPTA, LD. DEPARTMENTAL REPRESENTATIVE A PPEARED ON BEHALF OF REVENUE AND SHRI SUBASH AGARWAL, LD. ADVOCATE APPEA RED ON BEHALF OF ASSESSEE. ITA NO. 401/KOL/2016 & CO. 25/KOL/2016 A.Y 2011-1 2 DCIT CIR-1, SLG. VS. M/S GANGADHAR DEVELOPERS P VT. LTD. PAG E 2 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC T IN CHANGING HEAD OF INCOME FROM HOUSE PROPERTY TO BUSINESS INCOME WITH OUT GIVING COGENT FINDING HIMSELF. 2. THAT THE LD. CIT(A) DID NOT CALL FOR REPORT FROM THE A.O U/S. 250(4) REGARDING CHANGE OF HEAD OF INCOME. HE SIMPLY AGREE D WITH THE AO ON THE SO CALLED REMAND REPORT. 3. THE ASSESSEE DID NOT COOPERATE IN ASSESSMENT PRO CEEDINGS AND PRODUCE EVIDENCES AT THE TIME OF ASSESSMENT. THE LD . CIT(A) ACCEPTED THE ADDITIONAL EVIDENCES WITHOUT RECORDING REASONS. THIS IS IN VIOLATION TO THE RATIO OF JUDGMENT IN THE CASE OF (2013) 357 ITR 657 (CALCUTTA) MITRA LOGISTICS (P) LTD. REGARDING RULE 46A OF IT R ULES, 1962. 4. THAT THE AO HAS RIGHTLY DISALLOWED INTEREST U/S. 24(B) AS BORROWED FUND WERE NOT UTILIZED FOR CONSTRUCTION PURPOSE. TH E LD. CIT(A) HAS ERRED IN LAW AND FACT IN DELETING IT AND ALLOWING U /S. 36(1)(III) WHICH WAS NOT CLAIMED IN RETURN. RELIANCE IS PLACED ON THE JU DGMENT GOETZE (INDIA) LTD. VS. ICT 204 CTR 182(SC). 5. THAT THE APPELLANT CARVES LEAVE TO ADD, AMEND OR ALTER THE GROUNDS OF APPEAL, IF ANY. 3. ALL THE ISSUES ARE INTERCONNECTED THEREFORE BEIN G TAKEN UP TOGETHER FOR PURPOSE OF ADJUDICATION. THE ISSUE RAISED BY THE RE VENUE IS WHETHER THE LD. CIT(A) IS CORRECT IN DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF INTEREST EXPENSES. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IN TH E PRESENT CASE IS A PRIVATE IMITED COMPANY AND ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOPMENT IN SILIGURI AREA. THE ASSESSEE HAS CONSTRUCTED VARIOUS COMMERCIAL PROPERTIES AS OFFICES/ SHOPS WHICH WERE SOLD TO VARIOUS PARTIES. THE ASSESSEE IN ADDITION TO THE ABOVE HAS RENTED OUT THE COMMERCIAL PROPERTIES TO THE PARTIES AS DETAILED UNDER:- S.NO. NAME OF THE PARTY NATURE OF THE PROPERTY 1. PANTALOONS RETAIL INDIA LTD COMMERCIAL PROPERTY 2. VODAFONE ESSAR SOUTH LTD COMMERCIAL LAND THE ASSESSEE HAS DECLARED THE RENTAL INCOME IN RESP ECT OF THE ABOVE STATED PROPERTIES UNDER THE HEAD INCOME FROM HOUSE PROPERTY . THE TOTAL RENT WAS SHOWN FOR RS.11,01,33,251/- ONLY. THE ASSESSEE AGAI NST SUCH RENTAL INCOME CLAIMED INTEREST EXPENSES OF RS. 5.14 CRORES U/S 24 (B) OF THE ACT. ITA NO. 401/KOL/2016 & CO. 25/KOL/2016 A.Y 2011-1 2 DCIT CIR-1, SLG. VS. M/S GANGADHAR DEVELOPERS P VT. LTD. PAG E 3 HOWEVER THE AO WAS OF THE VIEW THAT NO DEDUCTION ON ACCOUNT OF INTEREST EXPENSES CAN BE ALLOWED TO THE ASSESSEE AGAINST THE RENTAL INCOME DERIVED FROM THE LETTING OUT OF COMMERCIAL LAND. THE AO FUR THER OBSERVED THAT PROPERTY WAS LET OUT TO PANTALOONS RETAILS INDIA LTD ON 07.0 3.2007 WHEREAS THE PROPERTY WAS LET OUT TO VODAFONE ESSAR SOUTH LTD ON 12.06.2008. THE POSSESSION WAS GIVEN TO THE TENANTS IMMEDIATELY ON SIGNING OF THE LEASE AGREEMENT. IT WAS ALSO OBSERVED THAT THE ASSESSEE H AS TAKEN THE LOAN FROM CENTRAL BANK OF INDIA ON 23.11.2007 FOR RS. 50 CROR ES WHICH WAS RENEWED ON 24.07.2009. THUS, IT IS CLEAR THAT NO BORROWED FUND HAS BEEN USED IN THE CONSTRUCTION OF THE COMMERCIAL PROPERTY WHICH WAS L ET OUT TO M/S PANTALOONS RETAILS INDIA LTD & VODAFONE ESSAR SOUTH LTD. 4.1 THE AO ALSO NOTED THAT THE ASSESSEE HAS SHOWN I N ITS BALANCE SHEET AS ON 31.03.2007 LOAN OF RS.15 CRORES APPROXIMATELY. O UT OF THE SAID LOAN A SUM OF RS.3 CRORES WAS ADVANCED AS LOAN AND A SUM OF RS .3.20 CRORES WAS INVESTED IN THE CLOSELY HELD COMPANIES. AS SUCH, TH E AO WAS OF THE OPINION THAT THE LOAN TAKEN BY THE ASSESSEE FOR RS.50 CRORE S CANNOT BE CLAIMED TO HAVE UTILIZED FOR MAKING THE PAYMENT OF THE EARLIER LOAN AS THE AMOUNT OF LOAN WAS OF MINUSCULE VALUE. IN VIEW OF ABOVE, THE AO W AS OF THE VIEW THAT NO LOAN / BORROWED FUND HAS BEEN USED FOR THE CONSTRUCTION OF THE PROPERTIES WHICH HAVE BEEN RENTED OUT AS DISCUSSED ABOVE. ACCORDINGL Y, THERE IS NO QUESTION OF CLAIMING THE DEDUCTION U/S 24(B) OF THE ACT. THUS, THE AO ISSUED SHOW CAUSED NOTICE UPON ASSESSEE FOR THE DISALLOWANCE OF THE DE DUCTION CLAIMED BY THE ASSESSEE U/S 24(B) OF THE ACT VIDE LETTER DATED 11. 11. 2013. THE AO IN THE SHOW CAUSE NOTICE ALSO OBSERVED THAT PROPERTIES WHICH HAVE BEEN LET OUT HAVE BEEN CLASSIFIED IN THE FINANCIAL STATEMENT AS STOCK-IN-TRADE. THE DETAILS OF THE INTEREST EXPENSES STAND AS UNDER :- SL. NO. NAME OF THE BANK WITH ADDRESS NATURE OF LOAN INTERE ST PAID IN RUPEES 1 CENTRAL BANK OF INDIA P.S. ROAD, GANGTOK, SIKKIM TERM LOAN 5,04,67,849/- 2 CORPORATION BANK, GEETANJALI COMPLEX (2 ND FLOOR) SEOKE ROAD, SILIGURI LOAN AGAINST FIXED DEPOSITS 1,04,008/- 3 ALLAHABAD BANK, SINGHTHAM, SIKKIM LOAN AGAINST 8, 23,045/- ITA NO. 401/KOL/2016 & CO. 25/KOL/2016 A.Y 2011-1 2 DCIT CIR-1, SLG. VS. M/S GANGADHAR DEVELOPERS P VT. LTD. PAG E 4 KEY MAN POLICY 4 MAGMA LEASING LTD., CITY PLAZA, SEVOKE ROAD, SILIGURI EQUIPMENT HIRE PURCHASE 29,153.43 5 CENTRAL BANK OF INDIA,A GANGTOK, PENAL INTEREST TERM LOAN 3,654/- 5,14,27,709.43 HOWEVER THE ASSESSEE FAILED TO REPLY TO THE NOTICE ISSUED BY THE AO VIDE LETTER DATED 11.11.2013. ACCORDINGLY THE AMOUNT OF INTERES T EXPENSES WAS DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASS ESSEE. 5. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE LD CIT(A). THE ASSESSEE BEFORE THE LD CIT(A) SUBMITTED THAT THE IN TEREST SHOULD BE ALLOWED EITHER U/S 24(B) OF THE ACT OR U/S 36(1)(III) OF TH E ACT. THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE LD CIT(A) WERE SENT TO THE AO FOR HIS REMAND REPORT. THE AO IN HIS REMAND REPORT SUBMITTED THAT THE IMPU GNED RENTAL INCOME CANNOT BE TAXED UNDER THE HEAD HOUSE PROPERTY AND C ONCEDED THE FACT THAT THE INCOME FROM RENTING OUT THE PROPERTIES SHOULD B E TREATED AS INCOME FROM THE BUSINESS. THE ASSESSEE IN RESPONSE TO THE REMAN D REPORT ALSO CONCEDED THE FACT THAT THE IMPUGNED INCOME SHOULD BE TREATED AS INCOME FROM BUSINESS. ACCORDINGLY, HE FURTHER SUBMITTED THAT IN THE ASSES SMENT YEAR 2012-13, THE AO DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT HAS TREATED THE SAME AS BUSINESS INCOME. ACCORDINGLY THE INTEREST E XPENSES CLAIMED U/S 36(1)(III) OF THE ACT WAS ALLOWED. THE LD CIT(A) AF TER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND THE REMAND REPORT OF THE AO TREATED THE RENTAL INCOME AS BUSINESS INCOME AND ACCORDINGL Y ALLOWED THE INTEREST EXPENSES AS BUSINESS EXPENDITURE BY OBSERVING AS UN DER:- 5. I HAVE CONSIDERED THE WRITTEN AS WELL AS ORAL S UBMISSION MADE BY THE AR DURING THE APPELLATE PROCEEDINGS. I HAVE ALSO CO NSIDERED FINDING OF THE AO IN THE ASSESSMENT ORDER AS WELL AS IN THE RE MAND REPORT AND HIS REMARKS THEREON. I FIND THAT THE AO HAS FILED A VER Y COMPREHENSIVE AND DETAILED FINDINGS AND OBSERVATIONS IN THE REMAND RE PORT. I AGREE WITH ASSESSING OFFICERS FINDING ON HIS DISALLOWANCE OF INTEREST AMOUNT U/S. 24(A) OR 24(B) OF THE IT ACT, 1961. I ALSO AGREE WI TH THE AO'S FINDING IN THE REMAND REPORT THAT IN THIS CASE, THE LEASE RENTAL INCOME MAY BE TREATED AS BUSINESS INCOME. REASONS FOR TREATING THE LEASE RENTAL INCOME AS BUSINESS INCOME HAVE BEEN ELABORATED IN D ETAIL IN THE ITA NO. 401/KOL/2016 & CO. 25/KOL/2016 A.Y 2011-1 2 DCIT CIR-1, SLG. VS. M/S GANGADHAR DEVELOPERS P VT. LTD. PAG E 5 REMAND REPORT AND THEY NEED NOT BE REPEATED AGAIN. THUS, THIS ISSUE IS SO DECIDED TO TREAT ASSESSEES LEASE RENTAL INCOME AS BUSINESS INCOME AND ACCORDINGLY, THE AO IS DIRECTED TO ALLOW BUSINE SS EXPENSES AND INTEREST EXPENSES SO CLAIMED BY THE ASSESSEE AS BUS INESS EXPENDITURE. THE REVENUE, IS AGGRIEVED WITH SUCH ORDER OF LD. CI T(A) HAS NOW COME IN APPEAL BEFORE US. 6. THE LD DR BEFORE US SUBMITTED THAT THE ASSESSEE HAS NOT RAISED ANY GROUND OF APPEAL BEFORE THE LD CIT(A) FOR THE CHANG E OF HEAD OF INCOME. THEREFORE THE LD CIT(A) ERRED IN TREATING THE RENTA L INCOME AS BUSINESS INCOME OF THE ASSESSEE. THE LD. DR ALSO ALLEGED THA T THE ASSESSEE HAS ALSO FILED ADDITIONAL DOCUMENTS BEFORE THE LD CIT(A) FOR TREATING THE RENTAL INCOME AS BUSINESS INCOME WHICH WAS ADMITTED BY THE LD CIT (A) WITHOUT TAKING THE REMAND REPORT FROM THE AO. THUS, THERE IS VIOLATION OF RULE 46A OF INCOME TAX RULES, 1962. LD. DR FURTHER STATED THAT LD CIT(A) H AS NOT APPLIED HIS MIND TO CHECK WHETHER THE INTEREST EXPENSES HAS NEXUSES WIT H THE BUSINESS OF THE ASSESSEE. HE VEHEMENTLY SUPPORTED THE ORDER OF AO A ND RELIED ON THE GROUNDS OF APPEAL RAISED IN THE MEMO OF APPEAL. ON THE OTHER HAND THE LD AR BEFORE US FILED A PAPER BOOK WHICH IS RUNNING PAGES FROM 1 TO 158 AND STATED THAT THE AO IN THE A SSESSMENT ORDER PERTAINING TO ASSESSMENT YEAR 2008-09 AS PER THE DI RECTION ISSUED BY THE LD CIT U/S 263 OF THE ACT HAS TREATED THE RENTAL INCOM E OF THE ASSESSEE AS BUSINESS INCOME. THEREAFTER, THE IMPUGNED RENTAL IN COME HAS BEEN TREATED AS BUSINESS INCOME IN THE AYS 2009-10, 2010-11, 2012-1 3 AND 2013-14 RESPECTIVELY. THE COPIES OF THE ASSESSMENT ORDERS A RE PLACED ON PAGES 107 TO 158 OF THE PAPER BOOK. AR IN SUPPORT OF ASSESSEES CLAIM ALSO RELIED ON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF EX CEL INDUSTRIES LTD. REPORTED IN 358 ITR 295 (SC) AND ON THE ORDER OF HO NBLE KOLKATA TRIBUNAL IN THE CASE OF PFH MALL & RETAIL MANAGEMENT LTD. VS. I TO 110 ITD 337 (KOL). HE RELIED ON ORDER OF LD CIT(A). ITA NO. 401/KOL/2016 & CO. 25/KOL/2016 A.Y 2011-1 2 DCIT CIR-1, SLG. VS. M/S GANGADHAR DEVELOPERS P VT. LTD. PAG E 6 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD AND CASE LAWS CITED BY LD. AR. THE ISSUE IN THE INSTANT CASE RELATES WHETHER THE RENTAL INCOME SHOULD BE CH ARGED TO TAX UNDER THE HEAD HOUSE PROPERTY OR BUSINESS INCOME AND CONS EQUENTIALLY THE TREATMENT OF INTEREST EXPENSES INCURRED BY THE ASSESSEE. IN T HIS REGARD, WE FIND THAT THE AO IN HIS REMAND REPORT HAS CLEARLY STATED THAT INC OME SHOULD BE TREATED AS INCOME FROM THE BUSINESS. THE COPY OF THE REMAND RE PORT IS PLACED ON PAGES 88 TO 94 OF THE PAPER BOOK. THE RELEVANT EXTRACT OF THE REMAND REPORT IS REPROD UCED BELOW:- FROM THE ABOVE DISCUSSION, IT IS SEEN THAT THE LEA SE RENTAL INCOME DERIVED BY THE ASSESSEE FROM COSMOS MALL DOES NOT QUALIFY AS INCOME FORM HOUSE PROPERTY AND ACCORDINGLY THE DE DUCTION AVAILED U/S 24(A) OR U/S.,24(B) IS INADMISSIBLE AND IS LIABLE T O BE DISALLOWED. IN THE COURSE OF HEARING, THE ABOVE FACTS WERE BROU GHT TO THE NOTICE OF A/R OF THE ASSESSEE. AFTER GOING THROUGH THESE FACT S, THE A/R OF THE ASSESSEE ALSO REALIZED THAT ALL THESE YEARS, THE AS SESSEE WAS CLAIMING WRONG DEDUCTION U/S. 24(A) & U/S. 24(B) OF THE IT A CT ON LEASE RENTAL INCOME, WHICH ACTUALLY IN THIS CASE IS A BUSINESS I NCOME. HE THEN REFERRED TO ASSESSEES GROUNDS OF APPEAL WHEREIN TH E ASSESSEE HAS EXPRESSED THAT IF THE INTEREST IS NOT ALLOWABLE U/S . 24(B), THE SAME SHOULD BE ALLOWED U/S 36(1)(III) OF THE ACT. HE ACCEPTED THAT SUCH RENTAL RECEIPTS SHOULD BE CON SIDERED AS BUSINESS RECEIPTS . IT IS ALSO RELEVANT TO MENTION HERE THAT SAME IDENTICAL ISSUE WAS INVOLVED IN ANOTHER ASSESSMENT YEAR I.E., AY 2012- 13, WHICH WAS VERY RECENTLY ASSESSED U/S. 143(3) OF THE ACT ON 30/03/2015. IN THE COURSE OF ASSESSMENT OF THAT RET URN, THE A/R OF THE ASSESSEE FILED A WRITTEN DECLARATION DATED: 25/03/2 015 DULY COUNTER- SIGNED BY ONE OF THE DIRECTORS, SHRI AJAY AGARWAL D ECLARING THAT THE LEASE RENTAL RECEIVED FROM LEASING OF COSMOS MALL BE TREATED AS BUSINESS RECEIPTS AND ACCORDINGLY, THE INTEREST I NCURRED BY ALLOWED U/S. 36(1)(III) OF THE ACT. THE ASSESSMENT OF THAT A.Y 2012-13 WAS FINALIZED ACCORDINGLY. CONSIDERING THESE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEASE RENTAL INCOME MAY BE TREATED AS BUSINESS INCOME . IT WAS ALSO OBSERVED THAT THE REVENUE HAS ACCEPTED SUCH RENTAL INCOME AS INCOME UNDER THE HEAD BUSINESS IN THE EARLIER AS WELL AS SUBSEQUENT ASSESSMENT YEARS IN THE ASSESSMENTS FRAMED UNDER SE CTION 143(3) OF THE ACT. THEREFORE, THE RENTAL INCOME SHOULD BE TREATED AS I NCOME FROM THE BUSINESS FOR THE YEAR UNDER CONSIDERATION. IN HOLDING SO, WE ALSO FIND SUPPORT & ITA NO. 401/KOL/2016 & CO. 25/KOL/2016 A.Y 2011-1 2 DCIT CIR-1, SLG. VS. M/S GANGADHAR DEVELOPERS P VT. LTD. PAG E 7 GUIDANCE FROM THE JUDGMENT OF THE HONBLE SUPREME C OURT IN THE CASE OF EXCEL INDUSTRIES LTD (SUPRA) . THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED BELOW. IT APPEARS FROM THE RECORD THAT IN SEVERAL ASSESSM ENT YEARS, THE REVENUE ACCEPTED THE ORDER OF THE TRIBUNAL IN FAVOU R OF THE ASSESSEE AND DID NOT PURSUE THE MATTER ANY FURTHER BUT IN RE SPECT OF SOME ASSESSMENT YEARS THE MATTER WAS TAKEN UP IN APPEAL BEFORE THE HIGH COURT BUT WITHOUT ANY SUCCESS. THAT BEING SO, THE R EVENUE CANNOT BE ALLOWED TO FLIP-FLOP ON THE ISSUE AND IT OUGHT LET THE MATTER REST RATHER THAN SPEND THE TAXPAYERS' MONEY IN PURSUING LITIGAT ION FOR THE SAKE OF IT. THE ALLEGATION OF THE LD. DR THAT THE ADDITIONAL EV IDENCES HAVE BEEN ADMITTED BY THE LD CIT(A) WITHOUT CALLING FOR THE REMAND REP ORT DOES NOT HAVE ANY BASIS, BECAUSE THE REMAND REPORT WAS DULY CALLED UP ON BY THE LD CIT(A) DURING THE PROCEEDINGS. THE COPY OF THE REMAND REP ORT IS PLACED IN THE PAPER BOOK AS DISCUSSED ABOVE. 7.1 WE ALSO OBSERVE THAT THERE WAS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE FOR THE AY 2011-12. HENCE , THE PRINCIPLE OF CONSISTENCY AS ENUNCIATED BY THE HON'BLE SUPREME UN DER THE GIGGLING AT THE COURT IN THE MATTER OF RADHASOAMI SATSANG V. CIT REPORTED IN 193 ITR 321 SHOULD BE APPLIED IN THE YEAR UNDER CONSIDERATION. 7.2 WE ALSO FIND SUPPORT FROM THE ORDER OF HONBLE KOLKATA TRIBUNAL IN THE CASE OF PFH MALL & RETAIL MANAGEMENT LTD. (SUPRA) WHEREIN IT WAS HELD AS UNDER:- MERE FACT THAT THE INCOME IS ATTACHED TO IMMOVABLE PROPERTY, CANNOT BE THE SOLE CRITERION FOR ASSESSMENT OF SUCH INCOME AS INCOME FROM HOUSE PROPERTY. IT IS NECESSARY TO DIG FURTHER TO FIND OU T WHAT IS THE PRIMARY OBJECT OF THE ASSESSEE WHILE EXPLOITING THE PROPERT Y. IF IT IS FOUND THAT THE MAIN INTENTION IS FOR SIMPLY LETTING OUT PROPERTY O R ANY PORTION THEREOF, THE RESULTANT INCOME MUST BE ASSESSED AS INCOME FRO M HOUSE PROPERTY. IF, ON THE OTHER HAND, THE MAIN INTENTION IS FOUND TO BE THE EXPLOITATION OF THE IMMOVABLE PROPERTY BY WAY OF COMMERCIAL ACTIVIT IES, THEN THE RESULTANT INCOME MUST BE HELD AS BUSINESS INCOME. I N THE INSTANT CASE, THE SERVICES RENDERED BY THE ASSESSEE WERE THE RESU LT OF ITS ACTIVITIES CARRIED ON CONTINUOUSLY IN AN ORGANIZED MANNER WITH A SET PURPOSE AND ITA NO. 401/KOL/2016 & CO. 25/KOL/2016 A.Y 2011-1 2 DCIT CIR-1, SLG. VS. M/S GANGADHAR DEVELOPERS P VT. LTD. PAG E 8 WITH A VIEW TO EARN PROFIT. HENCE, ALL THESE ACTIVI TIES WERE IN THE NATURE OF COMMERCIAL ACTIVITIES AND THE INCOME DERIVED BY THE ASSESSEE FROM THE SHOPPING MALLS/BUSINESS CENTRES WAS TO BE ASSES SED AS BUSINESS INCOME AND NOT AS INCOME FROM HOUSE PROPERTY. IN VIEW OF ABOVE, WE DO NOT FIND ANY INFIRMITY IN T HE ORDER OF LD CIT(A). HENCE THE GROUND OF APPEAL FILED BY THE REVENUE IS DISMIS SED. 8. IN THE RESULT, REVENUES APPEAL IS DISMISSED. COMING TO ASSESSEES CO NO.25/KOL//2016 . 9. IN THE CO, THE ASSESSEE HAS MERELY SUPPORTED TH E IMPUGNED ORDER OF LD. CIT(A), WHEREBY HE DELETED THE DISALLOWANCE MAD E BY THE AO. SINCE WE HAVE ALREADY UPHOLD THE ORDER OF LD. CIT(A), HENCE, CO OF ASSESSEE HAS BECOME INFRUCTUOUS. 10. IN THE RESULT, ASSESSEES CO IS DISMISSED AS IN FRUCTUOUS. 11. IN COMBINE RESULT, APPEAL OF REVENUE STANDS DISMISS ED AND THAT OF ASSESSEES CO IS DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT 20/ 04/2018 SD/- SD/- (' ) ( ) (N.V.VASUDEVAN) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP, SR.P.S )- 20 / 04 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-M/S GANGADHAR DEVELOPERS PVT. LTD. KAPIL CE NTRE, 2 ND MILE, SEVOKE ROAD, SLIGURI-734001 2. /REVENUE-DCIT, CIRCLE1, AAYAKAR BHAWAN, PARIBAHAN NAGA R, MATIGARA, SILIGURI, PIN-734010 3. 4 5 / CONCERNED CIT KOLKATA 4. 5- / CIT (A) KOLKATA 5. 8 ''4, 4, / DR, ITAT, KOLKATA 6. = / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 4,