- (1.) These appeals were heard together and are being disposed of by a common order. That is because common questions and submissions are raised by parties.
(2.) Both sides agree that for the sake of convenience, the facts in Income Tax Appeal No. 5313 of 2010 can be referred to. The respondent-assessee before us is common to all appeals and it is engaged in the real estate business and constructed a commercial complex viz. May Fair Tower. It is stated to be a partnership firm registered under the Indian Partnership Act, 1932. It filed its return of income for the assessment year 2000-01 dated 25th October, 2000, declaring total income at Rs. 5,51,81,680/- including rental income of Rs. 45,57,272/- and claimed deduction under section 24(a) of the Income Tax Act, 1961 (hereinafter referred to as the "IT Act") of Rs. 11,39,318/-. This claim of the assessee was not accepted by the Assessing Officer. The Assessing Officer treated the rental income as business income on the ground that the receipts from this property were on account of exploitation of commercial assets and as such, it is the business profit of the assessee. He further observed that the assessee is engaged in the business of construction of building with a view to sell the same and not for leasing it. Thus, leasing of unsold units is an integral part of its business. Hence the income earned on leasing was business income. The assessment order was passed on 29th March, 2006.
(3.) The assessee, aggrieved by this order, preferred an appeal before the Commissioner of Income (Appeals). The Commissioner passed an order on 19th September, 2006 (Annexure C) partly allowing the appeal. The Commissioner concluded that the claim of the assessee of expenses of Rs. 45,00,000/- should have been allowed. Therefore, ground No. 5 in the Memo of Appeal before the Commissioner and raised by the assessee came to be accepted.;