ACIT

KAUTILIYA BHAVAN,

MUMBAI-400051,

MAHARASHTRA

Vs.

K RAHEJA CORP PRIVATE

LIMITED

PLOT NO C - 30,BLOCK - G,

RAHEJA TOWER,BKC

MUMBAI-400051,

MAHARASHTRA

(Revenue) (Assessee)

Permanent Account Number: AAACP0522B

CO No. 15 & 38/Mum/2026

(Arising out of ITA Nos. 6203 & 6972/Mum/2025)

Assessment Year: 2014-15 & 2016-17

K RAHEJA CORP PRIVATE

LIMITED

PLOT NO C - 30,BLOCK - G,

RAHEJA TOWER,BKC

MUMBAI-400051,

MAHARASHTRA

Vs.

ACIT

KAUTILIYA BHAVAN,

MUMBAI-400051,

MAHARASHTRA

(Assessee) (Revenue)

Permanent Account Number: AAACP0522B

O R D E R

Per Saktijit Dey, Vice President:

Captioned appeals by the Revenue and cross objections by the assessee, arise out of three separate orders of learned Commissioner of Income Tax (Appeals), Mumbai, pertaining to the assessment years (A.Y. for short) 2014-15, 2015-16 and 2016-17.

ITA Nos. 6203/Mum/2025 (A.Y. 2014-15) & 6972/Mum/2025 (A.Y. 2016-17)

2. Since, these appeals stand at par, they are taken up together. The first issue which arises for consideration in terms with ground nos. 1 & 2 in both the appeals, relates to the proper head of income under which the lease rental income received by the assessee can be assessed.

3. Briefly, the facts relating to this issue are, the assessee is a resident corporate entity stated to be engaged in various activities including the business of development of real estate, lease of properties, etc.

4. For the assessment years under dispute, the assessee had filed its returns of income u/s. 139(1) of the Act. The assessee had developed Information Technology (IT) Parks at Pune and Hyderabad named ‘Commerzone’. The concerned IT parks are also recognized as Special Economic Zone (SEZ)/Industrial Parks under the respective SEZ schemes. During the assessment years under dispute, the assessee had derived two streams of income from IT parks:

i) Rent from lease of space;

ii) Rent from lease of furniture and fit-out and facility management charges towards maintenance and upkeep of premises let out.

5. So far as income at Item no.(i) is concerned, in the returns of income filed u/s. 139(1) of the Act, the assessee had offered them as ‘income under the head house property’. Subsequently, on 30.11.2017, a search and seizure operation u/s. 132 of the Act was carried out in case of the assessee. On the date of search and seizure operation, assessments for the impugned assessment years had not been completed. In other words, on the date of search, the assessments abated. As a result of search and seizure operation, proceedings u/s. 153A of the Act were initiated against the assessee. In response to the notice issued u/s. 153A of the Act, the assessee filed its return of income for the impugned assessment years, wherein, in a departure to its earlier stand, it treated the lease rentals from IT parks as income under the head ‘business and profession’. While completing the assessment u/s. 143(3) r.w.s. 153A of the Act, the A.O. rejected such change of stand by the assessee raising two objections. Firstly, the assessee in a return filed in pursuance to notice issued u/s. 153A of the Act cannot raise a fresh claim to its benefit. In this context, the A.O. relied upon the decision of Hon'ble Supreme Court in case of CIT v. Sun Engineering Works (P) Ltd. [1992] 198 ITR 297 (SC) and some other decisions. Without prejudice, he held that lease rentals were derived out of letting out of the properties, hence, it has to be assessed under the head ‘income from house property’. Accordingly, he rejected assessee’s claim.

6. The assessee contested the aforesaid decision of the A.O. in appeals preferred before the first appellate authority.

7. While deciding the issue, ld. First appellate authority, firstly, held that since it is a case of abated assessment, the A.O. has full power to not only examine the materials found as a result of search and seizure operation, but also all other issues not