JCIT, Bangalore V. M/s Prestige Estates Projects Pvt. Ltd., Bangalore

ITA 1024/BANG/2011

• Counselvise Citation: 102421114 RSA 2011
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 08-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Depreciation; Question of law
• Section: 43B; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH C BEFORE SMT. P MADHAVI DEVI, JUDICIAL MEMBER AND SHRI JASON P BOAZ, ACCOUNTANT MEMBER ITA NO.962/BAN G/2011 (ASST. YEAR - 2007-08) M/S PRESTIGE ESTATE PROJECTS PVT. LTD., THE FALCON HOUSE, NO.1, MAIN GUARD CROSS ROAD, BANGALORE-560 001. . APPELLANT VS. THE DY COMMISSIONER OF INCOME-TAX, CIRCLE-1(1), BANGALORE. . RESPONDENT ITA NO.1024/BANG/2011 (BY REVENUE) REVENUE BY : SHRI SUNDER RAJAN, JCIT ASSESSEE BY : SHRI H.N KHINCHA, C.A DATE OF HEARING : 27-08-2012 DATE OF PRONOUNCEMENT : 14-09-2012 O R D E R PER P MADHAVI DEVI, JUDICIAL MEMBER : THE CROSS APPEALS ARE FILED BY THE ASSESSEE AS WELL AS REVENUE. THE RELEVANT ASSESSMENT YEAR IS 2007-08. THE APPEA LS ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX AT MYSORE DATED ITA NOS.962 & 10 24/B/11 2 26.08.2011. THE APPEALS ARISE OUT OF THE ASSESSMEN T COMPLETED U/S 143(3) OF THE INCOME-TAX ACT, 1961. ITA NO.962/BANG/2011 2. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY TH E ORDER OF THE CIT(A) IN CONFIRMING THE DISALLOWANCE OF COMPOUNDIN G FEES OF RS.5,02,570/- PAID BY THE ASSESSEE TO B.M.P HOLDING IT TO BE PROHIBITED BY LAW AND THUS NOT ALLOWABLE. 3. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESEE FAIRLY ADMITTED THAT THIS ISSUE IS COVERED AGAINST THE ASS ESEE BY THE DECISION OF THE TRIBUNAL IN THE ASSESEES OWN CASE FOR THE A SSESSMENT YEARS 2001-02, 2003-04. THE COPY OF THE SAID ORDER IS FI LED BEFORE US. 4. THE LEARNED DR ALSO CONFIRMED THAT THE ISSUE IS COVERED AGAINST THE ASSESSEE. 5. HAVING HEARD BOTH THE PARTIES AND HAVING CONSIDE RED THE RIVAL CONTENTIONS AND THE RELEVANT MATERIALS ON RECORD, W E FIND THAT THE TRIBUNAL AT PARA 3.16 TO 3.18 HAS HELD AS UNDER : 3.16 THE ISSUE BEFORE US HAS BEEN CONSIDERED BY T HE KARNATAKA HIGH COURT IN THE CASE OF MAMTA ENTERPRIS ES ITA NOS.962 & 10 24/B/11 3 (SUPRA). THE QUESTION OF LAW REFERRED TO THE JURIS DICTIONAL HIGH COURT WAS AS UNDER:- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE APPELLATE TRIBUNAL IS RIGHT IN LAW IN HOLDING THAT THE PAYMENT OF THE COMPOUNDING FEES IS NOT A PENALTY FO R INFRACTION OF LAW AND HENCE ALLOWABLE. AT PAGE 361, THE HONBLE HIGH COURT HAS REFERRED TO THE ORDER ISSUED IN THE CASE OF MAMTA ENTERPRISES. IN THE INSTANT CASE ALSO, THE ORDER WHICH HAS BEEN ISSUED BY THE COMMISSIONER WHILE GRANTING OCCUPANCY CERTIFICATE, IS THAT THE ASSESSEE HAS PAID THE COMPOUNDING FINE. BEFORE THE HONBLE HIGH COURT IT WAS CONTENDED BY THE APPELLAN TS COUNSEL THAT CONSTRUCTION OF A BUILDING IN VIOLATIO N OF THE SANCTIONED PLAN CANNOT BE TREATED AS A VIOLATION OF A SERIOUS NATURE, WHICH IS PROHIBITED BY LAW OR AMOUNTING TO COMMISSION OF AN OFFENCE. THE HONBLE JURISDICTION AL HIGH COURT AFTER OBSERVING AS UNDER HELD THAT BYELAWS EM POWER THE COMMISSIONER TO COMPOUND THE VIOLATION OR DEVI ATION OF THE SANCTIONED PLAN BY A PERSON WHO CONSTRUCTS A BU ILDING:- HAVING ELABORATELY HEARD LEARNED COUNSEL APPEARING FOR THE PARTIES, WHILE WE FIND CONSIDERABLE FORCE IN THE SUBMISSION OF SRI SESHACHALA, WE ARE UNABLE TO ACCEDE TO THE SUBMISSION OF SRI KULKARNI. WE ARE UNABLE TO AGREE WITH THE SUBMISSION OF SRI KULKARNI THAT SINCE THE PROVISION IN CLAUSE (B) OF SECTION 483 ITA NOS.962 & 10 24/B/11 4 OF THE CORPORATION ACT PERMITS COMPOUNDING OF THE OFFENCE, ONCE THE VIOLATION IS COMPOUNDED, THERE WAS NO OFFENCE COMMITTED IN THE EYE OF LAW; AND THE OFFENCE COMMITTED IS WIPED OUT. SECTION 300 OF THE CORPORATION ACT PROHIBITS COMMENCEMENT OF THE CONSTRUCTION OR RECONSTRUCTION OF A BUILDING, WITHOUT THERE BEING A PERMISSION GRANTED BY THE CORPORATION FOR THE EXECUTION OF THE WORK. SECTION 303 OF THE SAID ACT SETS OUT THE GROUNDS ON WHICH APPROVAL OF A SITE FOR CONSTRUCTION OR RECONSTRUCTION OF A BUILDING MAY BE REFUSED BY THE COMMISSIONER. SINCE 308 OF THE ACT CONFERS POWER ON THE COMMISSIONER TO DIRECT ALTERATION OF CONSTRUCTION WORK COMMENCED BY THE OWNER OF A SITE. SECTION 321 OF THE ACT CONFERS POWER ON THE COMMISSIONER TO MAKE AN ORDER FOR DEMOLITION OF THE BUILDING AFTER COMPLYING WITH THE PROCEDURE SET OUT IN THE SAID PROVISION, IF HE IS SATISFIED THAT THE CONSTRUCTION OR RECONSTRUCTION OF A BUILDING HAS BEEN COMMENCED WITHOUT OBTAINING THE PERMISSION OR BEING CARRIED ON OR HAS BEEN COMPLETED OTHERWISE THAN IN ACCORDANCE WITH THE PLANS OR PARTICULARS ON WHICH SUCH PERMISSION OR ORDER WAS BASED. SECTION 436 OF THE ACT, AMONG OTHER THINGS, PROVIDES THAT IF THE CONSTRUCTION OR RECONSTRUCTION OF ANY BUILDING IS COMMENCED WITHOUT THE PERMISSION OF THE COMMISSIONER; OR IS CARRIED ON OR COMPLETED OTHERWISE THAN IN ACCORDANCE WITH THE PARTICULARS ON WHICH SUCH PERMISSION WAS BASED ; OR IS CARRIED ON OR COMPLETED IN CONTRAVENTION OF ANY LAWFUL ORDER OR BREACH OF ANY PROVISION OF THE ACT OR ANY RULE OR BYELAW MADE UNDER IT, OR OF ANY DIRECTION OR REQUISITION LAWFULLY GIVEN OR MADE, THE OWNER OF THE BUILDING WHO PUTS UP SUCH CONSTRUCTION SHALL BE LIABLE ON CONVICTION TO PAY A FINE PRESCRIBED UNDER THE SAID PROVISION. HOWEVER, CLAUSE (B) OF ITA NOS.962 & 10 24/B/11 5 SECTION 483 OF THE CORPORATION ACT EMPOWERS THE COMMISSIONER TO COMPOUND ANY OFFENCE COMMITTED IN BREACH OF THE PROVISIONS OF THE ACT, RULES, BYELAWS OR REGULATIONS WHICH MAY BY RULES MADE BY THE GOVERNMENT BE DECLARED COMPOUNDABLE. THEREFORE, FROM THE SCHEME OF THE SEVERAL PROVISIONS IN THE ACT REFERRED TO ABOVE, IT IS CLEAR THAT NOBODY CAN PUT UP ANY NEW CONSTRUCTION OR PROCEED TO RECONSTRUCT THE EXISTING BUILDING WITHOUT THERE BEING A SANCTIONED PLAN OR PERMISSION GRANTED BY THE COMMISSIONER ON THAT BEHALF, THE PUTTING UP ANY CONSTRUCTION WITHOUT THERE BEING A SANCTIONED PLAN IS MADE AN OFFENCE UNDER THE ACT AND IT IS TREATED AS AN ACT PROHIBITED BY LAW. NO DOUBT, AS NOTICED BY US EARLIER, CLAUSE (B) OF SECTION 483 OF THE CORPORATION ACT EMPOWERS THE COMMISSIONER TO COMPOUND THE OFFENCE. BYELAW 5.6 FRAMED BY THE CORPORATION IN EXERCISE OF THE POWER CONFERRED UNDER IT UNDER SECTION 428 OF THE ACT ENABLES THE COMMISSIONER TO SET OUT THE CIRCUMSTANCES UNDER WHICH HE COULD COMPOUND AN OFFENCE. IT IS USEFUL TO REFER TO THE SAID BYELAW WHICH READS AS HEREUNDER: 5.6.1 WHETHER ANY CONSTRUCTION IS IN VIOLATION/DEVIATION OF THE SANCTIONED PLAN, THE COMMISSIONER MAY, IF HE CONSIDERS THAT THE VIOLATION/DEVIATIONS ARE MINOR VIZ., ONLY WHEN THE DEVIATIONS/VIOLATIONS IS WITHIN 5% OF (1) THE MINIMUM SET BACK TO BE LEFT AROUND THE BUILDING (2) THE MAXIMUM PLOT COVERAGE (3) PERMISSIBLE FLOOR AREA RATIO AND MAXIMUM HEIGHT OF THE BUILDING AND THAT THE DEMOLITION UNDER CHAPTER XV OF THE ACT IS NOT FEASIBLE WITHOUT AFFECTING THE STRUCTURAL STABILITY, THEN HE MAY REGULARIZE SUCH VIOLATIONS/DEVIATIONS BY SANCTIONING OF A MODIFIED PLAN WITH A LEVY OF A SUITABLE FEE TO BE PRESCRIBED. THE COMMISSIONER SHALL COME TO SUCH CONCLUSION ONLY AFTER RECORDING DETAILED ITA NOS.962 & 10 24/B/11 6 REASONS FOR THE SAME. VIOLATIONS/ DEVIATIONS UNDER THE PROVISION SHALL NOT INCLUDE THE BUILDINGS WHICH ARE CONSTRUCTED WITHOUT OBTAINING ANY SANCTIONED PLAN WHATSOEVER AND ALSO THE VIOLATIONS/ DEVIATIONS WHICH ARE MADE INSPITE OF THE SAME BEING SPECIFICALLY DELETED OR REJECTED IN THE SANCTIONED PLAN. THE BYELAWS REFERRED TO ABOVE, READ ALONG WITH CLAUSE (B) OF SECTION 483, EMPOWERS THE COMMISSIONER TO COMPOUND THE VIOLATION OR DEVIATION OF THE SANCTIONED PLAN DONE BY A PERSON WHO CONSTRUCTS A BUILDING. AFTER HOLDING THAT THE AMOUNT PAID IS COMPOUNDING O F AN OFFENCE, THE HONBLE JURISDICTIONAL HIGH COURT H ELD THAT SUCH AN EXPENDITURE IS NOT TO BE DEEMED TO HAV E BEEN INCURRED FOR THE PURPOSE OF BUSINESS OR PROFESSION AND NO DEDUCTION OR ALLOWANCE CAN BE MAD E IN RESPECT OF SUCH AN EXPENDITURE. THUS, THE DECIS ION OF JURISDICTIONAL HIGH COURT IS SQUARELY APPLICABLE IN THE INSTANT CASE. 3.17 THE HONBLE M.P. HIGH COURT IN THE CASE OF NATIONAL TEXTILE CORPORATION LTD. V CIT 286 ITR 496 HAD AN OCCASION TO CONSIDER AS TO WHETHER THE TRIBUNAL COULD COMMENT ON THE DECISION OF THE HIGH COURT AND HAVIN G DONE SO, WHETHER JUDICIAL PROPRIETARY PERMITTED THE TRIBUNAL TO IGNORE THE DECISION AND TAKE ITS OWN VI EW ARE QUESTION OF LAW WHICH HAVE TO BE REFERRED TO THE HI GH COURT. WHILE ALLOWING THE MATTER TO BE REFERRED, T HE HONBLE MP HIGH COURT OBSERVED AT PAGE 498 AS UNDER :- IN OUR CONSIDERED OPINION THE MANNER IN WHICH THE TRIBUNAL HAS DEALT WITH THE ISSUE SO FAR AS PRECEDENTS OF JUDICIAL PROPRIETY IN FOLLOWING DECISIONS OF THE HIGH COURT ARE CONCERNED, THE SAME SHOULD HAVE BEEN REFERRED TO THIS COURT FOR EXAMINATION. IT IS, IN OUR HUMBLE OPINION, ON ISSUE WHICH THE HIGH ITA NOS.962 & 10 24/B/11 7 COURT ALONE HAS TO DECIDE AND NOT FOR THE TRIBUNAL TO DECIDE. WE HAVE OUR OWN RESERVATIONS AS TO WHETHER THE TRIBUNAL COULD MAKE A COMMENT ON THE DECISION OF THE HIGH COURT AND HAVING DONE SO, WHETHER JUDICIAL PROPRIETY PERMITTED THE TRIBUNAL TO IGNORE THE DECISION AND TAKE ITS OWN VIEW. ALL THESE ISSUES NEED TO BE DECIDED BY THE HIGH COURT IN A REFERENCE UNDER SECTION 256(1) IBID. 3.18 HENCE, WHEN A SIMILAR ISSUE HAS BEEN DECIDED B Y THE JURISDICTIONAL HIGH COURT, THEN THAT DECISION I S BINDING ON US AND THAT IS TO BE FOLLOWED IN ORDER T O ABIDE WITH THE JUDICIAL DISCIPLINE. HENCE, WE HOLD THAT THE AMOUNTS PAID AS COMPOUNDING FINE FOR REGULARIZATION OF VIOLATION/ DEVIATION ARE NOT ALLOWABLE EXPENDITURE. WE ALSO UPHOLD THE FINDING OF THE LEARNED CIT(A) THAT IN CASE THE COMPOUNDING FINE/PENALTY PAID FOR REGULARIZATIO N OF VIOLATION/DEVIATION IS ULTIMATELY HELD AS FEES THEN PROVISION OF SECTION 43B WILL BE APPLICABLE AND THE AMOUNT WILL BE DEDUCTIBLE AS PER THE PROVISIONS OF SECTION 43B. THIS DISPOSES OF APPEAL FOR THE ASSESSMENT YEAR 200 1- 02. 6. RESPECTFULLY FOLLOWING THE DECISION OF THE CO-OR DINATE BENCH WHICH IS IN THE CONSONANCE WITH THE DECISION OF THE JURISDICTIONAL HIGH COURT, THIS APPEAL OF THE ASSESSEE IS DISMISSED. ITA NOS.962 & 10 24/B/11 8 ITA NO.1024/BANG/2011 7. IN THIS APPEAL, THE REVENUE IS AGGRIEVED BY THE ORDER OF THE CIT(A) IN GIVING RELIEF TO THE ASSESSEE BY RAISING THE FOLLOWING GROUNDS: I. THE LD. CIT(A) ERRED IN DELETING THE ADDITION THE ADDITION MADE ON PROTECTIVE BASIS AS INCOME FROM OT HER SOURCES. II. THE LD. CIT(A) ERRED IN DIRECTING THE AO TO AS SESSS THE RENTAL RECEIPT FROM FORUM MALL AND EVA MALL AS INCOME FROM PROFITS AND GAINS FROM BUSINESS/PROFESSIONS AND THE CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE SAMPLE AGREEMENT IN RESP ECT OF THE RENTAL RECEIPT CLEARLY ESTABLISHES A TYPICAL LA ND LORD TENANT RELATIONSHIP BETWEEN THE ASSESSEE COMPANY AN D TENANTS AND THEREFORE THE INCOME RECEIVED AS RENTAL RECEIPTS SHOULD BE TREATED AS INCOME FROM HOUSE PROPERTY ONLY. III) THE LD. CIT(A) ERRED IN DIRECTING THE AO TO AS SESS THE HIRE CHARGES IN RESPECT OF FIT-OUTS THAT WERE L AID OUT TO TENANTS AS INCOME FROM OTHER SOURCES. ITA NOS.962 & 10 24/B/11 9 IV) FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE UR GED AT THE TIME OF HEARING THE ORDERS OF LD. CIT(A) MAY BE SET ASIDE AND THAT OF ASSESSING OFFICER MAY BE RESTORED . 8. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE HAS FILED A CHART SHOWING THAT ALL THE ISSUES ARE COVER ED BY THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE EA RLIER ASSESSMENT YEARS. 9. THE LEARNED DR ALSO CONFIRMED THE SAME. 10. AS REGARDS ADDITION ON PROTECTIVE BASIS IS CON CERNED, THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISI ON OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 200 6-07. THE TRIBUNAL AT PARA 12.1 OF ITS ORDER HELD AS UNDER : (I) THE BRIEF CONTENTION OF THE REVENUE WAS THAT THE CI T(A) ERRED IN DELETING THE ADDITION OF RS.7.33 CRORES MA DE ON PROTECTIVE BASIS AS INCOME FROM OTHER SOURCES. (II) ON A GLIMPSE OF THE IMPUGNED ASSESSMENT ORDER, WE F IND THAT THERE WAS NO DISCUSSION AT ALL IN THE BODY OF THE ORDER, HOWEVER, AS POINTED OUT BY THE CIT(A), IN THE COMPU TATION, IT WAS MENTIONED AS INCOME FROM OTHER SOURCES: INC OME ASSESSED IN THE A.Y 2005-06 ON PROTECTIVE BASIS AS DISCUSSED IN PARA RS.7,33,13,640. ITA NOS.962 & 10 24/B/11 10 (III) THE BACKGROUND OF THE ISSUE, IN BRIEF, WAS THAT IN THE ASSESSMENT ORDER FOR THE AY 2005-06, AN ADDITION OF RS.7,33,13,640/- TO THE BUSINESS INCOME WAS MADE AS ADMITTED BY THE ASSESSEE, ON THE PREMISE THAT THE A SSESSEE SHOULD HAVE FOLLOWED PERCENTAGE COMPLETION METHOD [PCM] OF RECOGNIZING REVENUES IN RESPECT OF REAL ES TATE ACTIVITIES. WHEN THE ISSUE FINALLY REACHED BEFORE THE TRIBUNAL, THE HONBLE TRIBUNAL IN ITS FINDING CITED SUPRA DIRECTED THE AO TO ACCEPT THE PROJECT COMPLETION M ETHOD OF ACCOUNTING FOR THE YEAR UNDER REFERENCE. (IV) EXTENSIVELY QUOTING THE HONBLE TRIBUNALS FINDING REFERRED SUPRA, THE LD. CIT(A) HAD, IN HIS IMPUGNED ORDER UNDER DISPUTE (FOR THE AY 2006-07), OBSERVED THUS 3.3..THUS, THE FINDING IS LIMITED TO ASSESSME NT YEAR 2005-06, HOWEVER, IN THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSING OFFICER HAS TREATED THAT INCOME OFFER ED BY THE APPELLANT TO THE ABOVE EXTENT ON THE BASIS OF THE P ROJECT COMPLETION METHOD UNDER THE HEAD INCOME FROM OTHER SOURCES ON PROTECTIVE BASIS. CONSIDERING THE FACT THAT THE SAID ADDITION HAS BEEN DELETED BY THE HONBLE ITAT IN ASSESSMENT YEAR 2005- 06, THE INCOME HAS TO BE ASSESSED ON SUBSTANTIVE BA SIS IN ASSESSMENT YEAR 2006-07 AS OFFERED BY THE APPELLANT . AFTER DELETION OF THE INCOME BY THE ITAT, IN ASSESSMENT Y EAR 2005-06, THERE IS NO QUESTION OF DOUBLE TAXATION IN THE ASSE SSMENT YEAR 2006-07 WHERE THE APPELLANT HIMSELF (SIC) ITSELF OF FERED THE INCOME FOR TAXATION. ITA NOS.962 & 10 24/B/11 11 IN VIEW OF THE ABOVE, REDUCTION OF INCOME OF RS.7,33,13,640/- UNDER THE HEAD PROFIT AND GAINS F ROM BUSINESS OR PROFESSION IN THE COMPUTATION OF INCOME BY THE ASSESSING OFFICER DOES NOT ARISE. ONCE THE INCOME IS TAXED U NDER THE HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSION, THE I NCOME ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES ON PROTECTIVE BASISIS HEREBY DELETED. (V) THE GAMUT OF THE ISSUE, TO OUR MIND, IS THAT WH EN THE AO RESTORED TO CONCLUDE THE IMPUGNED ORDER UNDER DISPU TE PRECISELY, ON 31.12.2008, THE ASSESSMENT ORDER FOR THE AY 2005-06 WAS UNDER APPEAL BEFORE THE HONBLE TRIBUNA L FOR ADJUDICATION WHICH MUST HAVE INFLUENCED THE AO TO A DD THE INCOME OF RS.7.33 CRORES ASSESSED FOR THE AY 2005-0 6 ON A PROTECTIVE BASIS. IN THE ASSESSMENT ORDER UNDER DI SPUTE, WHILE ADDING A WHOPPING SUM OF RS.7.33 CROES AS INC OME FROM OTHER SOURCES THE AO SHOULD HAVE TAKEN PROPER CARE TO MENTION IN THE BODY OF THE ORDER THE REASON FOR TAX ING THE SAID SUM EVEN ON A PROTECTIVE BASIS. (VI) IN THE MEANWHILE, THE HONBLE TRIBUNAL IN IT S FINDING CITED SUPRA (ON 11.9.2009) DIRECTED THE AO TO ACCEP T THE PROJECT COMPLETION METHOD OF ACCOUNTING FOR THE YEA R UNDER REFERENCE. THUS, IN OUR CONSIDERED VIEW, THE TAXAB ILITY OF THE SUM OF RS.7,33,13,640/- HAD REACHED A FINALITY ON A SPECIFIC DIRECTION OF THE HONBLE TRIBUNAL CITED AB OVE FOR THE AY 2005-06. THEREFORE, THE CIT(A) WAS JUSTIFIE D IN HIS STAND ON THIS POINT. IT IS ORDERED ACCORDINGLY. ITA NOS.962 & 10 24/B/11 12 11. RESPECTFULLY FOLLOWING THE SAME, THIS GROUND O F APPEAL OF REVENUE IS DISMISSED. 12. COMING TO THE GROUND NO.3 RELATING TO TREATING THE RENTAL INCOME FROM FORUM MALL AND EVA MALL AS INCOME FROM PROFITS AND GAINS FROM BUSINESS, WE FIND THAT TRIBUNAL AT SUB PARA 2 TO PARA 12 HAS HELD AS UNDER : (I) THE REVENUES SUBMISSION WAS VERY BLUNT TO THE EFFECT THAT THE CIT(A) ERRED IN DIRECTING THE AO TO ASSESS THE RENTAL RECEIPT FROM FORUM MALL AND EVA MALL AS INCOME FROM PROFITS AND GAINS FROM BUSINESS; AND THAT THE CIT(A) GROSSLY ERRED BY IGNORING THE FACT THAT THE SAMPLE AGREEMENT IN RESPECT OF THE RENTAL RECEIPT CLEARLY ESTABLISHES A TYPICAL LANDLORD TENANT RELATIONSHIP BETWEEN THE ASSESSEE AND TENANTS AND, THEREFORE, THE INCOME RECEIVED AS RENTAL RECEIPTS SHOULD HAVE BEEN ORDERE D TO BE TREATED AS INCOME FROM HOUSE PROPERTY. (II) AT THE OUT-SET, WE WOULD LIKE TO POINT THAT AN IDENTICAL ISSUE HAD CROPPED UP BEFORE THE HONBLE TRIBUNAL FOR THE AY 2005-06 IN THE ASSESSEES OWN CASE WHEREIN THE HONBLE TRIBUNAL HAD, AFTER HEARING THE ARGUMENTS OF RIVAL PARTIES, ANALYZING T HE ITA NOS.962 & 10 24/B/11 13 ISSUE AT LENGTH, EXTENSIVELY QUOTING, CHIEFLY, THE RULINGS OF THE HONBLE APEX COURT AS WELL AS THE JURISDICTIONAL HONBNLE HIGH COURT IN A NUMBER OF CASES ON A SIMILAR ISSUE, OBSERVED THUS 5.1 WE HAD DISCUSSED THIS ISSUE WHILE CONSIDERING THE RATIO OF LAW AS LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF SULTAN BROTHERS (SURPA). THE HONBLE APEX COURT HAS HELD THAT THERE SHOULD BE NO CONSIDERATION OF PRIMARY AND SECONDARY LETTINGS IN CONSTRUCTING THE SECTION 12(4) OF 1922, WHICH HAS ANALOGY TO 56(III) OF I.T ACT OF 1961. IN THIS CAS E, THE LETTING OF BUILDING IS ALONG WITH LETTING MACHINERY, PLANT OR FURNITURE REQUIRED FOR ANCILLARIES SERVICES AND, THEREFORE, WE HOLD THAT T HE ALTERNATIVE PLEA OF THE APPELLANT THAT IN CASE THE INCOME IS NOT TO BE ASSESSED UNDER THE HEAD INCOME FROM THE HOUSE PROPERTY THEN IT IS REQUIRED TO BE ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES. THIS IS WITHOUT PREJUDICE TO OUR BASIC FINDING THAT IN THE INSTANT CASE, THE INCOME FROM MALL IS ASSESSABLE UNDER THE HEAD INCOME FROM BUSINESS. (III) IN CONFORMITY WITH THE FINDING OF THE HONBLE TRIBUNAL REFERRED ABOVE, WE DIRECT THE AO TO ASSESS THE INCOME FROM MALL UNDER THE HEAD INCOME FROM BUSINESS. IT IS ORDERED ACCORDINGLY. ITA NOS.962 & 10 24/B/11 14 13. RESPECTFULLY FOLLOWING THE SAME, THIS GROUND O F APPEAL OF THE REVENUE IS ALSO REJECTED. 14. REGARDING GROUND NO.4, TREATING THE HIRE CHAR GES IN RESPECT OF FIT-OUTS THAT WERE LET OUT TO TENANTS AS INCOME F ROM OTHER SOURCES. WE FIND THAT THIS ISSUE IS COVERED BY SUB PARA 3 OF PARA 12 OF ITAT ORDER WHICH IS AS UNDER : (I) NEVERTHELESS, THE REVENUES BRIEF SUBMISSION WA S THAT THE CIT(A) HAD GROSSLY ERRED IN DIRECTING THE AO TO ASS ESS THE HIRE CHARGES IN RESPECT OF FIT OUTS WHICH WERE LAID OUT TO TENANTS AS INCOME FROM OTHER SOURCES. (II) YET AGAIN, WE FIND A SOLACE FROM THE FINDING O F THE HONBLE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE AY 2005 -06 ON SIMILAR ISSUE WHEREIN THE HONBLE TRIBUNAL WAS PLEA SED TO OBSERVE THAT 6.1. THIS ISSUE HAS BEEN DECIDED BY THIS TRIBUNAL IN THE CASE OF THE ASSESSEE FOR THE ASST. YEAR 2004-05. T HE TRIBUNAL VIDE ORDERS DATED : 29 TH MAY, 2009 IN ITA NO.851/BANG/2008 VIDE PARA 14 OF THE ORDER HELD THAT THE FACTS AND CIRCUMSTANCES BROUGHT ON RECORD BY THE ASSESSING AU THORITIES AND THE LEARNED COUNSEL INDICATE THAT THE INTENTION OF THE ASSESSEE FOR RENDERING THE SAME AS INCOME FROM OTHE R SOURCES OUGHT NOT TO HAVE BEEN DISTURBED AS IN EARLIER YEAR S. HENCE, ITA NOS.962 & 10 24/B/11 15 THE RECEIPTS ON LETTING OF IT IS TO BE TAXED UNDER THE HEAD INCOME FROM OTHER SOURCES ON THE BASIS OF THE DEC ISIONS OF THE TRIBUNAL IN THE EARLIER YEAR AND ALSO ON THE BA SIS OF HE PRINCIPAL OF CONSISTENCY. ONCE THE RENTAL INCOME O N LETTING OUT IS TAXED UNDER THE HEAD INCOME FROM OTHER SOURCES DEPRECIATION. III) AS THE ISSUE BEFORE US IS SIMILAR WHICH HAS BE EN DECIDED BY THE HONBLE TRIBUNAL REFERRED SUPRA IN THE ASSESSEE S OWN CASE FOR THE PRECEDING ASSESSMENT YEAR, WE HAVE NO HESITATION IN DIRECTING THE AO TO TREAT THE HIRE CHARGES IN RE SPECT OF FIT- OUTS LET-OUT TO THE TENANTS AS INCOME FROM OTHER S OURCES. IT IS ORDERED ACCORDINGLY. 15. RESPECTFULLY FOLLOWING THE SAME, THIS GROUND O F APPEAL IS ALSO REJECTED. 16. IN THE RESULT, THE CROSS APPEALS FILED BY THE REVENUE AS WELL AS THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14TH SEPT, 2012. SD/- SD/- (JASON P BOAZ) (MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER VMS. BANGALORE DATED : 14/09/2012 ITA NOS.962 & 10 24/B/11 16 COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER SR. PRIVATE SECRETA RY, ITAT, BANGALORE.