Before

THE INCOME TAX COMMISSIONER, RANCHI

AT RANCHI

(Case Concerning Assessment for the purpose of Income Tax)

Application No. ___/2015
Ramakanta

..Applicant
Vs.

Assessing Officer

...Respondent

Written Submissions on Behalf of the Respondent

Moola Ram
Roll no: 72
Semester: 8th
Section: A

Written Submissions on Behalf of the RespondentPage 1

Written Submissions on Behalf of the RespondentPage 2

C ONT E NT S
List Of Abbreviations.................................................................................................................2
Index Of Authorities...................................................................................................................4
List Of Statutes ........................................................................................................................4
List of Cases ............................................................................................................................4
List of Books ...........................................................................................................................4
Statement Of Jurisdiction...........................................................................................................5
Statement Of Facts.....................................................................................................................6
Issues Presented.........................................................................................................................7
ISSUE I...................................................................................................................................7
WHETHER RAMAKANTA IS JUSTIFIABLE IN HIS CLAIMS?.........................................7
WHETHER ASSESSING OFFICER WRONG OR ERRONEOUS IN COMPUTING
THE TAX?.................................................................................................................................7
WHETHER THE APPEAL IS MAINTAINABLE ?
Summary Of Pleadings..............................................................................................................8
Pleadings....................................................................................................................................9
Prayer.......................................................................................................................................10

Written Submissions on Behalf of the RespondentPage 3

LIST OF ABBREVIATIONS
&

And

Paragraph

Section

AIR

All India Reporter

Bom.

Bombay

C.W.N.

Calcutta Weekly Notes

Cal.

California

Ch.D.

Chancery Division

Cir.

Circuit

Co.

Company

Corpn.

Corporation

Del.

Delhi

DLT

Delhi Law Times

Dr.

Doctor

ed.

Edition

et.al.

and others

Fed.

Federal

Fig.

Figure

http.

Hyper Text Transfer Protocol

Inc.

Incorporation

INSC

Supreme Court of India [Medium Neutral Citation]

IP

Intellectual Property

IPAB

Intellectual Property Appellate Board

J.

Justice

Written Submissions on Behalf of the RespondentPage 4

L.Ed.

U.S. Supreme Court Reporter, Lawter's Edition

Ltd.

Limited

M/s.

Messers

Mad.

Madras

MIPR

Manupatra Intellectual Property Reporter

Ms.

Miss

No.

Number

NSWLR

New South Wales Law Reporter

OA

Original Appeal

ORA

Original Rectification Application

Ors.

Others

Pg.

Page

Prof.

Professor

PT

Patents & Trademark

PTC

Patents & Trademark Cases

Pvt.

Private

RTI

Right to Information

SCC

Supreme Court Cases

SCL

SEBI & Corporate Laws

S.Ct.

Supreme Court Reporter (U.S.)

UGC

University Grants Commission

U.S.

United States

vs.

Versus

www

World Wide Web

Written Submissions on Behalf of the RespondentPage 5

INDEX OF AUTHORITIES
LIST OF STATUTES
Income Tax Act, 1961

LIST OF CASES

LIST OF BOOKS
Vyas Dinesh, The Law and Practice of Income Tax, Ninth Edition, Volume II, Lexis Nexis,
Butterworths Wadhwa, Nagpur
Singhania Vinod K, Singhania Monika, Students Guide to Income Tax, 52 nd Edition,
Assessment Year 2015-2016, Taxman
Ahuja Girish, Gupta Ravi, Issues on Income Tax and Wealth Tax, Sixth Ediction, Volume 1,
CCH a Wolters Kluwer Business

STATEMENT OF JURISDICTION
THE APPEAL IS FILED UNDER SECTION 246A OF THE INCOME TAX ACT AGAINST
THE ORDER OF ASSESSMENT OF INCOME FOR THE PURPOSE OF INCOME TAX
PASSED BY THE ASSESSING OFFICER.

Written Submissions on Behalf of the RespondentPage 6

STATEMENT OF FACTS
Parties Involved

Ramakanta is an affluent person who runs many business in running condition like

grocery, stationery etc. in his locality.

As he was affluent he had a passion for purchasing and selling land and for
Written Submissions on Behalf of the RespondentPage 7

investment in real estate sector.

One day he gets an offer from a premium courier service provider where by the
courier concern expresses their concern for running one their branch at his one of the

house(s) premises.
They also approach to give the rent not only for house premises rather for certain
office equipments and for an old car which is aimed by the courier concern for using
in their courier business.

Sequence of Events

Subsequently, the agreement is signed between the Ramakanta on 1.10.2013 and the
courier concern and ramakanta starts to receive a lumsum amount as rent@80,000

(INR) from the next month onwards.

In the mean while ramaknata receives demand notice from IT authority for the AY 14-

15 and he is taxed for such aforesaid amount as business income.

But Ramaknat denied to pay tax on business income and claims that tax computed on
business income is erroneous on the part of the AO (assessing officer) and moved to
appeal.

ISSUES PRESENTED

ISSUE I

IS RAMAKANTA JUSTIFIED IN HIS CLAIM?

ISSUE II
Written Submissions on Behalf of the RespondentPage 8

IS AO WRONG OR ERRONEOUS IN COMPUTING THE TAX?

ISSUE III

IS APPEAL MAINTAINABLE?

SUMMARY OF PLEADINGS

Issue I
Whether Ramakanta is not justifiable in his claim?
It is established fact that courier service provider expresses their concern for running one
their branch at appellants one of the house(s) premises. They also approach to give the rent
not only for house premises rather for certain office equipments and for an old car which is
aimed by the courier concern for using in their courier business. Subsequently, the agreement
is signed between the appellant on 1.10.2013 and the courier concern and appellant starts to
Written Submissions on Behalf of the RespondentPage 9

receive a lumsum amount as rent@80,000 (INR) from the next month onwards.
Issue - II
Whether Assessing Officer is not wrong or erroneous in computing the tax?
It is humbly contended before this Forum that Assessing Officer is not wrong and erroneous
in computing the tax. As the house rent would amount to the business income under the
income tax act for the purpose of income tax.
ISSUE III
Appeal is not maintainable under the income tax act?
It is clearly mentioned that the house premises and other certain office equipments and a old
car of the appellant was given on rent with the prime objective of getting income from the
property. Therefore it would come under the ambit of business income for the purpose of
Income Tax Act 1961 and hence the calculation of tax on that income is as per the law and
hence A.O has not committed any error of law in computing the tax on income earned
through the house and car rented.
It is humbly contented that under the above authorities cited it is legally warranted that the
appeal is not tenable under the income tax Act, 1961

Pleadings
1. That Ramakanta is not justified in his claim.
It is humbly contended before this Forum that Ramakant is not justified in his claims because
the house, car and other equipments which was rented by him comes under business income.
It is humbly submitted that the term Business is defined under 2(13) of the income tax Act,
1961 the word business is a word of large and indefinite import; it is something which
occupies the attention and labour of a person for the purpose of profit; it is an activity carried
on continuously in an organised manner with a set purpose and with a view to earn profit it
was also held in CIT v. Bazzar1.
That the income from the house and car rent falls under the meaning of business
income for the purpose of IT Act 1961.
I.A.
It is further submitted that in case CIT v. K. L. Puri (HUF 2) Honble Court
1

200 ITR 131, (1992) 65 Taxman 91 (Ori).

1998 233 ITR 43 Delhi

Written Submissions on Behalf of the RespondentPage 10

held that in the instant case there had been two separate agreements one for rent for
accommodation and the other for hire charges of the furniture and fixtures. The
Division Bench of the Delhi High Court held that since the agreement for providing
furniture and fixtures was done by a separate agreement, the rent realised pursuant to
such agreement referable to the furniture and fixtures should not be treated as income
from property.
It is further submitted that in Saswad Mali Sugar Factory Ltd. v. CIT 3 the

I.B.

Bombay High Court has held that the income from student hostel should be taxed as
business income.
In the case Commissioner of Income-Tax v. Shambhu Investment Pvt. Ltd 4.,

I.C.

Honble court held that it clearly appears that merely because income is attached to
any immovable property that cannot be the sole factor for assessment of such income
as income from property. What has to be seen is what was the primary object of the
assessee while exploiting the property. If it is found applying such test that the main
intention is for letting out the property or any portion thereof the same must be
considered as rental income or income from property. In case it is found that the main
intention is to exploit the immovable property by way of complex commercial
activities in that event it must be held as business income.
I.D. In the present case it is established fact that courier service provider expresses their concern
for running one their branch at appellants one of the house(s) premises. They also approach
to give the rent not only for house premises rather for certain office equipments and for a old
car which is aimed by the courier concern for using in their courier business. Subsequently,
the agreement is signed between the appellant on 1.10.2013 and the courier concern and
appellant starts to receive a lumsum amount as rent@80,000 (INR) from the next month
onwards.
I.E. It clearly shows that the house premises and other certain office equipments and a old car of
the appellant was given on rent with the prime objective of getting income from the property.
Therefore it would come under the ambit of business income for the purpose of Income Tax
3

[1999] 236 1TR 706 (Bom)

2001 249 ITR 47 Cal

Written Submissions on Behalf of the RespondentPage 11

Act 1961 and hence the claim of the appellant is unjustified and not valid as per law.
II.
II.A.

That AO is not wrong or erroneous in computing the tax.

It is humbly contended before this Forum that Assessing Officer is not wrong and
erroneous in computing the tax. As the house rent would amount to the business

II.B.

income under the income tax act for the purpose of income tax.
It is contended that in CIT v. Tamil Nadu Dairy Development Corporation Ltd 5.
Honble Court held that term business is a word of very wide connotation and by no
means determinate in its scope and has to be concerned with reference to each

II.C.

particular kind of activity and occupation of the person concerned.

In CEPT v. Lakshmi Silk Mills Ltd 6, Hobble court held that the assessee was doing
the business of manufacturing silk cloth and also dying silk yarn. During the relevant
accounting year the assessee could not work the dying plant owing to the difficulty of
obtaining silk yarn on account of the last war, and after allowing the plant owing to
remain dying plant did not cease to be a commercial asset because it could not be used
as a commercial asset by the assessee himself at the time it was let out, and held that

II.D.

the rent received from the lessees was assessable as income from business.
Business should have been Carried on Accounting year under clause (i) make it clear
that in order to attract the application of the clause, it is necessary that the business
should have been carried on by the assessee at any time during the accounting year

II.E.

but not necessary throughout the year.

In the present case, It is clearly mentioned that the house premises and other certain
office equipments and a old car of the appellant was given on rent with the prime
objective of getting income from the property. Therefore it would come under the
ambit of business income for the purpose of Income Tax Act 1961 and hence the
calculation of tax on that income is as per the law and hence A.O has not committed
any error of law in computing the tax on income earned through the house and car

rented.
III.
Is Appeal maintainable?
III.A It is humbly submitted before this Forum that the present appeal is not maintainable
under the income tax Act, because assessing officer is not wrong in his order. Therefore, it is
legally warranted that the appeal is not tenable under the income tax Act, 1961.
5

216 ITR 535: CIT v. Ganga Prasad 199 ITR 173, (1992) 101 CTR (Cal) 118.

1951 AIR 454, 1952 SCR 1

Written Submissions on Behalf of the RespondentPage 12

III.B. In M. Anandan v. ITO7, it was held that it is the duty of the Assessing officer to assess
accordingly the law and if an appeal is made challenging his assessment that must be precise
and to the point. And the assessee must not try and make out any distinction from the
provisions where there are not any. Therefore, basing upon the factual circumstances and the
enunciation in the case it can be concluded that the appeal lacked all the merits and hence it
not maintainable.

PRAYER
Therefore in the light of the facts stated, issues raised, arguments advanced and the
authorities cited, it is most humbly & respectfully prayed before the forum to adjudge and
declare that
1. Ramakanta is not justified in his claim.
2. AO is not wrong or erroneous in computing the tax.
3. Appeal is not tenable.

And Pass any other order which the forum deems fit in the ends of justice equity and good
conscience.
All of which is most humbly and respectfully submitted.
Counsel on Behalf of the Respondent
7

1995 53 ITD 428 Mad

Written Submissions on Behalf of the RespondentPage 13

Sd/Date 21st February 2015

Place - Ranchi

Written Submissions on Behalf of the RespondentPage 14