Ccess Khar, Mumbai vs Assessee

The present appeal has been preferred by the assessee against the order dated 12.10.2012 of the Commissioner of Income Tax (Appeals) [(hereinafter referred to as CIT(A)] relevant to assessment year 2009-10. The assessee through its grounds of appeal has agitated the action of the lower authorities in treating the income from Hire charges under the head "Income from other sources" as against treated by the assessee as "business income".

2. The brief facts of the case are that the assessee, a partnership firm, was engaged in business of imparting education in computer programming and data processing up to assessment year 2005-06. Thereafter the assessee discontinued the said business activity. The assessee let out the fixed assets, 2 ITA No.4650/M/2014 M/s. CCESS-Khar

computers, furniture, fixtures and other office equipments to M/s. HDFC Standard Life Insurance Co. Ltd. vide agreement dated 07.07.05 for a period of 33 months. Thereafter the assessee again entered into agreement dated 25.11.08 with the said M/s. HDFC Standard Life Insurance Co. Ltd. for letting out the above assets for a further period of 36 months. The Assessing Officer (hereinafter referred to as the AO) made the following observations:

"i) That the assessee has discontinued its business activity since long and is neither conducting now nor intend to do in future.

ii) That the place of business from where the assessee was carrying business activity is completed occupied by others since July, 2005

iii) Assessee's assets are given on long term hire which is connected to the leave and license agreement of premises owned by its partners personally which is also of long term nature."

3. From the above observations, the AO assessed the Hire income under the head "Income from other sources" instead of "Business income" as was offered by the assessee. The Ld. CIT(A), agreeing with the view taken by the AO, upheld the findings of the AO in this respect. The assessee has thus come in appeal before us.

4. The Ld. A.R. of the assessee has vehemently stressed that the Ld. CIT(A) did not give proper opportunity of hearing to the assessee. The Ld. CIT(A) had restricted the hearing on 17.04.14 and 05.05.14 for making oral submissions only and that the Ld. CIT(A) refused to accept the written submissions of the assessee on this issue.

5. After considering the above submissions of the Ld. A.R. of the assessee, we have asked the Ld. Representative as to what are those points about which the assessee wanted to file written submissions and what contentions of the assessee have not been looked into/considered by the Ld. CIT(A) while 3 ITA No.4650/M/2014 M/s. CCESS-Khar

passing the impugned order. The Ld. A.R. of the assessee could not convince us on merits of the case as to if he is allowed to file the written submissions at this stage, then how he will be able to succeed on merits. The Ld. AO has categorically held that the assessee had discontinued its business activity of imparting computer education since long. The place of business from where the assessee was carrying out business activity has been completely occupied by others and that the assessee has given its assets on long term basis which is connected to the lease and license agreement of the premises owned by its partners personally which has also been rented out on long term basis. The Ld. A.R. could not convince us on merits of the case. The Ld. CIT(A) has duly considered the facts and circumstances of the case and has passed a speaking order on the issue. We do not find any infirmity in the order of the Ld. CIT(A) in this respect. Hence, the appeal of the assessee is hereby dismissed.

Order pronounced in the open court on 04.02.2015.

Sd/- Sd/- (R.C. Sharma) (Sanjay Garg) ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai, Dated: 04.02.2015. * Kishore, Sr. P.S.

Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT (A) Concerned, Mumbai The DR Concerned Bench //True Copy// [

By Order

Dy/Asstt. Registrar, ITAT, Mumbai.