Itxa/1584/2016 Of Principal Commissioner Of Income Tax - 10 v. M/S Plaza Hotels Pvt Ltd

Priya Soparkar IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1584 OF 2016 Principal Commissioner of Income Tax-10 … Appellant V/s. M/s Plaza Hotels Pvt. Ltd.… Respondent --- Mr.Arvind Pinto with Mr.N.C.Ranganayakulu for the Appellant.Mr.Atul Jasani for the Respondent. --- CORAM : AKIL KURESHI AND M.S.SANKLECHA, JJ. DATE : FEBRUARY 05, 2019. P.C.:- 1.Revenue has filed this appeal against the judgment of the Income Tax Appellate Tribunal raising following questions forour consideration:- “1. Whether on the facts and in the circumstancesof the case and in law, the ITAT was justified intreating the receipts for the lease of its hotel asbusiness income ignoring the primary fact that thetransaction involved the long term lease of aproperty which should be rightfully taxed as houseproperty income ? 2. Whether on the facts and in the circumstances ofthe case and in law, the ITAT was justified intreating the receipts for the lease of its hotel asbusiness income ignoring the finding given by theCIT (A) that the transaction between the assesseeand KHIL were not at arms length and therefore, for the purpose of determining the fair marketvalue, the provisions of Section 23(1)(a) of the Actare clearly applicable?” 3.Learned counsel for the parties pointed out that identicalissue in case of this very assessee had come up for considerationbefore this Court for Assessment Years 2007-08, 2008-09 inIncome Tax No.203 of 2015 and connected appeal. The Courtconsidered such questions in following manner: “7. It has been observed that the business washanded over by the respondent assessee to KHIL inthe year 1994 and since the assessment year 1995-96 till the assessment year 2005-06, the incomefrom the same was assessed as a business income.The assessment for the year 1995-96 was completedunder Section 143(3) of the Income Tax Act. Soalso, for the assessment year 2003-04 andassessment year 2005-06, the assessment wascompleted under Section 143(3) of the Income TaxAct. The claim of the assessee of the said incomebeing a business income was accepted. 8. The assessee is not receiving any rent amountbut is receiving 1% of the total revenue earned byKHIL and does not get any fix amount as rent.These aspects are considered by the Tribunal. 9.Question No.2 being dependent uponQuestion No.1, no substantial question of lawarises. As such, the appeal is dismissed. No costs.” 4.In the result, this appeal is also dismissed. (M.S.SANKLECHA,J.) (AKIL KURESHI,J.)