OMEGA SHIPPING P. LTD, MUMBAI V. ITO 8(2)(4), MUMBAI

ITA 1041/MUM/2011

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1878 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 08-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 04-02-2011
• Court: TRIBUNAL
• Keywords: Business income

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C , BENCH MUMBAI BEFORE SHRI R.C.SHARMA , A M & SHRI AMARJIT SINGH , J M ./ ITA NO . 1041 / MUM/20 1 4 ( / ASSESSMENT YEAR : 20 0 7 - 20 08 ) OME GA SHIPPING PVT. LTD., 610, KOHINOOR CITY MALL, KIROL ROAD, OFF LBS MARG, KURLA (WEST), MUMBAI - 400070 VS. ITO - 8(2)(4), MUMBA I ./ ./ PAN/GIR NO. : A AA C O 1408 R ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI MADHUR AGARWAL /REVENUE BY : DR S. PANDYAN / DATE OF HEARING : 08 / 10 / 2015 / DATE OF PRONOUNCEMENT 16 /12 /2015 / O R D E R PER R.C.SHARMA (A.M) : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - MUMBAI , DATED 28 - 10 - 2010 FOR THE ASSESSMENT YEAR 200 7 - 08 , IN THE MATTER OF ORDER P ASSED U/S.143(3) OF THE I.T.ACT . 2. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED FOR TREATING THE BUSINESS INCOME AS INCOME FR OM HOUSE PROPERTY. THE ASSESSEE COMPANY HAS OFFERED THE LEASE RENTALS RECEIVED BY IT AS BUSINESS INCOME. THE AO HELD THAT THE LEASE RENTAL IS TAXABLE AS INCOME FROM HOUSE PROPERTY. BY THE IMPUGNED ORDER, THE CIT(A) CONFIRMED THE SAME, AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE US, WHEREIN THE ASSESSEE HAS RAISED ITA NO. 1041 /M/1 1 2 A WITHOUT PREJUDICE GROUND THAT THE EXPENDITURE INCURRED BY THE ASSESSEE SHOULD BE ALLOWED UNDER THE HEAD INCOME FROM OTHER SOURCES. 3. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT THE ASSESSEE COMPANY WAS ACTING AS SHIPPING AGENT OF HIMALYA EXPRESS UPTO F.Y.2001 - 02. DURING THE F.Y.2002 - 03 AGENCY WAS TERMINATED AND COMPANY RECEIVED COMPENSATION OF RS. 1.96 CRORE WHICH WAS OFFERED TO TAX. HAVING FAILED IN ITS EFFORTS TO REVIVE B USINESS AND LEFT WITH STAFF ALONG WITH ALL PERIPHERALS LIKE FURNITURE, FIXTURE, COMPUTERS, CABINS, CUBICAL ETC. THE COMPANY LEASED OUT FOUR PREMISES TO VARIOUS LICENSES ON LEAVE AND LICENSE ALONG WITH VARIOUS FURNITURE, FIXTURE AND EQUIPMENT, DETAILS OF WH ICH HAVE BEEN INCORPORATED IN PARA 3.3 AT PAGE 2 OF THE CIT(A)S ORDER. LETTING OUT OF PREMISES ALONG WITH EQUIPMENT AND FURNITURE & FIXTURE WAS INSEPARABLE FROM EACH OTHER. PREMISES ALONG WITH EQUIPMENT AND FURNITURE & FIXTURE WERE LEASED OUT SO THAT EMP LOYEES OF THE COMPANY CAN BE PAID AND ADMINISTRATIVE EXPENSES CAN BE MET WHILE COMPANY EXPLORES POSSIBILITY OF REVIVING ITS AGENCY BUSINESS WITH OTHER CARRIERS. FROM THE RECORD WE FOUND THAT CLAIM OF THE ASSESSEE FOR TREATING SUCH INCOME AS INCOME FROM BUS INESS OR PROFESSION IS CONFIRMED BY THE IT DEPARTMENT ITSELF DURING THE ASSESSMENT OF EARLIER YEAR I.E. A.Y. 2006 - 07. COPY OF ORDER U/S.143(3) ALONG WITH COPY OF BALANCE SHEET AND PROFIT & LOSS ACCOUNT WAS ALSO PLACED ON RECORD. KEEPING IN VIEW THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE VIS - - VIS THE FACT THAT ASSESSEE IS NOT IN A BUSINESS OF LETTING OUT ITS ASSETS FOR EARNING BUSINESS INCOME , WE DIRECT THE AO TO ASSESS THE INCOME AS INCOME FROM OTHER SOURCES . ITA NO. 1041 /M/1 1 3 4 . IN THE RESULT, APPEAL OF THE ASSES SEE IS ALLOWED IN TERMS INDICATED HEREINABOVE . O RDER PRONOUNCED IN THE OPEN COURT ON THIS 16 /12 / 201 5 . SD/ - SD/ - ( AMARJIT SINGH ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 16 /12 /201 5 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPO NDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//