Case Law Details
Gowtham Residential Junior College Vs ACIT (ITAT Visakhapatnam)
The Ld.DR submitted that the assessee has declared income by way of rent received to the tune of Rs.2,06,66,410/- and treated the same as business income for the current year. The assessee has claimed expenses to the tune of Rs.88,51,069/- involving bank charges, repairs and maintenance, interest paid to banks, travelling charges, depreciation, PF paid and income tax. He further submitted that by referring to clauses in the lease deed, the AO found that the assessee has leased out the buildings for the period of 10 years for annual rent of Rs.2.50 crores, which was reduced to Rs.1.60 crores per year. He further argued that receiving rent is not the business activity of the assessee. Therefore, the AO concluded that the assessee being the owner shall be liable to tax under income from house property and disallowed certain expenditure.
It is an admitted fact that the building was let out for rent and the assessee had received the income from buildings. The main contention of the revenue is that the assessee has no role to play in running the educational institution after it has leased out its assets except major repairs. Even the maintenance of the building is to be done by the lessee. Hence, day to day operation or management of business is the only duty of the lessee. The assessee did not place any evidence to establish that it incurred the expenditure. Therefore, we do not find any infirmity in the orders passed by the AO as well as the CIT(A) and uphold the same.
FULL TEXT OF THE ORDER OF ITAT VISAKHAPATNAM
These appeals are filed by assessee against the orders of the Commissioner of Income Tax (Appeals) [ in short, “CIT(A)”]-12, Hyderabad in Appeal No.10061/2016-17 dated 26.10.2021 for the Assessment Year (A.Y.) 2013-14.
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