ITO,Ward-8(3), Kolkata, Kolkata V. M/s. Konark Furniture(P)Ltd, Kolkata

ITA 1042/KOL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7872 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 21-08-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 12-07-2012
• Court: TRIBUNAL
• Department Lawyers: RAMA PRASAD NAG
• Keywords: Business income; Rule of consistency

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOLKATA ( ) BEFORE , /AND , ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHYA , AM ] / I.T.A NO. 1 0 4 2 /KOL/20 1 2 / ASSESSMENT YEAR : 200 7 - 0 8 ITO, WARD - 8(3), AAYAKAR BHAWAN VS. M/S KONARK FURNITURE PVT. LTD. P - 7, CHOWRINGHEE SQUARE, 5 TH FLOOR 1, HUMAYUN PLACE , KOLKATA - 700 087 ROOM NO 5/17, KOLKATA 700 069 (PAN:AACCK 1679C) ( /APPELLANT ) ( / RESPONDENT ) DATE OF HEARING: 18 . 1 1 .201 4 DATE OF PRONOUNCEMENT: 12 . 1 2 .201 4 FOR THE APPELLANT : SHRI RAMA PRASAD NAG, JCIT FOR THE RESPONDENT : SHRI S O U MITRA CHOUDHURY , ADVOCATE / ORDER PER SHRI MAHAVIR SINGH, JM : THIS APPEAL BY REVENU E IS ARISING OUT OF ORDER OF CIT (A) - VI I I, KOLKATA IN APPEAL NO. 3 2 1 / CIT(A) - VI II / KOL/ 0 9 - 1 0 DATED 2 0 . 0 4 .20 1 2 . ASSESSMENT W AS FRAMED BY IT O , WARD - 8(3) , KOLKATA U/S. 1 4 3(3) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) FOR ASSESSMENT YEAR 200 7 - 0 8 VIDE HIS ORDER DATED 2 9 - 12 - 200 9 . 2. THE ONLY ISSUE IN THIS APPEAL OF REVENU E IS AGAINST THE ORDER OF CIT(A) IN HOLDING THAT INCOME FROM SUBLETTING AND OTHER SERVICES IS ASSESSABLE A S PROFIT AND GAINS FROM THE BUSINESS OF THE ASSESSEE AND NOT AS INCOME FROM HOUSE PROPERTY . FOR THIS, REVENUE HAS RAISED FOLLOWING GROUNDS: - 1 . THAT, ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(APPEALS ) ERRED IN ALLOWING RELIEF TO THE ASSESSEE COMPANY HOLDING T HAT THE INCOME FROM SUB - LETTING AND OTHER SERVICES IS ASSESSABLE IN THE H ANDS OF THE APPELLANT COMPANY AS PROFITS AND GAINS FROM BUSINESS A ND NOT AS INCOME FROM HOUSE PROPERTY; WHEREAS, THE CIT(A PPEALS) H AS COME TO SUCH CONCLUSION ON MISCONSTRUED FACTS. 2 . THAT, ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(APPEALS) HAS ERRED IN HOLDING THAT THE TWO COMPANIES WERE SEPARATE ENTITIES AND THEIR HAVING COMMON DIRECTORS ON THE COMP ANIES BOARD DID NOT BY ITSELF PROVE ANY COLOURABLE DEVICE. 3 . THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A)HAS ERRED IN INTERPRETING THE ACTUAL ESSENCE OF THE ORDER OF THE ASSESSING OFFICER WHERE HE HAD TRIED TO BRING OUT THE FACT THAT THERE WAS NO DIFFERENCE BETWEEN THE TWO COMPANIES AND THE LESSOR AND THE LESSEE WERE S AME PERSONS HAVING COMMON INTEREST IN BOTH THE COMPANIES. 2 ITA NO.1042/K/2012 M/S. KONARK FURNITURE PVT. LTD AY 2007 - 08 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A REGISTERED PRIVATE LIMITED COMPANY DERIVING I NCOME FROM LICENC E FEE FROM SUB - TENANTS AND DECLARED THE SAME UNDER THE HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSION . THE ASSESSEE IS A TENANT OF DALHOUSIE PROPERTIES LTD. UNDER AGREEMENT OF TENANCY DATED 01 - 04 - 2001 IN RESPECT OF GROUND FLOOR SPACE AT STEPHEN HOUSE, 63, HEMANTA BASU SARANI AND 58, HEMANTA BASU SARANI, KOLKATA 700 001. THE ASSESSEE WAS GIVEN RIGHT VIDE THIS TENANCY AGREEMENT TO SUB - LET THE PROPERTY BY WAY OF SUB - LET, THE ASSESSEE IS EARNING INCOME FROM THIS PROPERTY. DURING THE RELEVA NT ASSESSMENT YEAR, THE ASSESSEE DERIVED INCOME FROM SAME AT RS.23,04,000/ - I.E. GROSS RECEIPTS AND CLAIMED THE SAME AS INCOME FROM BUSINESS AND PROFESSION . THE ASSESSEE DECLARED NET LOSS IN THE ITS RETURN OF INCOME AT RS.9,48,730/ - AFTER DEDUCTING EXPEN SES. THE ASSESSEE HAS RECEIVED INCOME FROM FOLLOWING SUB - TENANTS: - SL. NO NAME OF TENANTS PREMISE OCCUPIES MONTHLY FEE TOTAL (RS) 1 HUTCH 4E, BBD BAG, GROUND FLOOR 50,000/ - 6,00,000 2 CRI LTD 4D, BBD BAG, GROUND FLOOR 200 S.FT. SPACE FOR TRANSFORMER 12,000/ - 1,44,000 3 RELIANCE WEB STONE 8, BBD BAG 1920 S.FT NOW KNOWN AS 62, HEMANTA BASU SARANI 1,15,000/ - 13,80,000 4 ANGLO SWISS WATCH CO 58, HEMANTA BASU SARANI 15,000/ - 1,80,000 THE ASSESSING OFFICER AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE , ASSESSED THE SAME AS INCOME FROM HOUSE PROPERTY FROM THE FOLLOWING: - SL NO NAME OF TENANTS PREMISE OCCUPIES TOTAL (RS) 1 HUTCH 4E, BBD BAG, GROUND FLOOR 6,00,000 2 HUTCH 8, BBD BAG 1920 S.FT. NOW KNOWN AS 62, HEMANTA BASU SARANI 13,80,000 3 ANGLO SWISS WATCH CO 58, HEMANTA BASU SARANI 1,80,000 21,60,000 BUT ASSESSED THE BALANCE AT RS.1.44 LAKHS FROM CRI LTD. AS INCOME FROM OTHER SOURCE AS UNDER: - FEES RECEIVED FROM CRI LTD. FOR ALLOTMENT OF SPACE FOR PUTTING UP TRANSFORMER RS.1,44,000/ - AGGRIEVED AGAINST THE ACTION OF THE ASSESSING OFFICER IN ASSESSING THE INCOME DECLARED BY THE ASSESSEE AS INCOME FROM BUSINESS OR PROFESSION AS INCOME FROM HOUSE PROPERTY PREFERRED APPEAL BEFORE CIT(A). 4. THE CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE , ACCEPTED THE CLAIM OF THE ASSESSEE TO BE ASSESSED AS INCOME FROM BUSINESS OR PROFESSION VIDE HIS ORDE R AS UNDER: - 3 ITA NO.1042/K/2012 M/S. KONARK FURNITURE PVT. LTD AY 2007 - 08 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE A/R OF THE APPELLANT ALONG WITH THE SUPPORTING DETAILS FURNISHED, PERUSED THE FACTS OF THE CASE INCLUDING THE IMPUGNED ASSESSMENT ORDER AND THE RELEVANT PROVISION OF THE ACT AND THE OTHER MAT ERIALS ON RECORD AND I FIND ENOUGH FORCE IN THE ARGUMENT OF THE AR OF THE APPELLANT. THE APPELLANT WAS GIVEN THE RIGHT TO ASSIGN SUBLET, UNDER - LET OR PART WITH ANY POSSESSION OF THE ROOM OR ANY PART OF THE ROOM ON PERMIT ANY PERSON TO OCCUPY EVEN IN CASE O F TEMPORARY ABSENCE OF THE APPELLANT. BY VIRTUE OF THIS AGREEMENT, THE APPELLANT COLLECTED LICENCE FEES OF RS.5,04,000/ - FROM SUB TENANTS AND SERVICE CHARGES OF RS.18,00,000/ - FOR PROVIDING SERVICES LIKE REGULAR MAINTENANCE OF THE AREA OCCUPIED, SECURITY S ERVICES, CLEANING, PAYMENT OF RATES AND TAXES, WATER CHARGES ETC. FROM VARIOUS PARTIES HAVE SHOWN THE SAME AS BUSINESS INCOME UNDER THE HEAD LICENCE FEES . THUS, OUT OF FOUR TENANTS, RECEIPTS FROM THREE WERE TREATED AS INCOME FROM HOUSE PROPERTY AND THAT OF THE FOURTH ONE, NAMELY, CRI LTD., THE RECEIPTS WERE TREATED AS INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER DID NOT ALLOW ANY EXPENDITURE, EXCEPT ALLOWING STANDARD DEDUCTION FROM THE HOUSE PROPERTY INCOME COMPUTED. THE ASSESSMENT WAS THUS COMPLETED ON TOTAL INCOME OF RS.16,56,000/ - AS AGAINST LOSS DECLARED AT RS.9,98,730/ - . TO RECAPITULATE, THE ASSESSING OFFICER HAS RECORDED THE FINDING OF THE FACTS AS UNDER: THAT THE LESSOR AND LESSEE PRIVATE LIMITED COMPANIES IN REALITY ARE ONE AND THE SAME AND ARE BEING MANAGED BY THE SAME PERSONS; 1. THAT THE ARRANGEMENT HAS BEEN MADE WITH A VIEW TO MITIGATE THE TAX BURDEN; 2. THAT THE ACTIVITIES CLAIMED TO HAVE BEEN CARRIED OUT ARE NOT REGULAR AND NOT RECURRING. 3. THAT BOTH THE LESSER AND LESSEE HAD ENTERED INTO LEASE AGREEMENT WITH ONE OF THE TENANTS, WHICH SHOWED THAT THE ENTITIES ARE NOT SEPARATE. 4. THAT IN VIEW OF THE FACTS, THE INCOME FROM SUB - LETTING PREMISES WAS HELD TO BE ASSESSABLE AS INCOME FROM HOUSE PROPERTY, WHILE INCOME FROM PROVIDING SPACE FOR PUTTING UP T RANSFORMER WAS HELD TO BE ASSESSABLE AS INCOME FROM OTHER SOURCES . THE ASSESSING OFFICER DERIVED SUPPORT FROM THE DECISION DELHI HIGH COURT IN THE CASE OF SMARTS PVT. LTD. VS. CIT (2008) 66, TAXMAN 53 (DELHI HIGH COURT). NOW, THE FINDING THAT THERE IS NO DIFFERENCE BETWEEN THE TWO COMPANIES, THE LESSER AND LESSEE HAVING COMMON INTEREST PERSONS IS NOT TENABLE IN THE EYES OF LAW. BOTH THE COMPANIES ARE SEPARATE ENTITIES REGISTERED WITH THE REGISTRAR OF COMPANIES HAVING ITS INDEPENDENT MEMORANDUM OF INCORP ORATION AND ARTICLES OF ASSOCIATION AND ASSESSED TO TAX SEPARATELY ON THE INCOME EARNED BY THEM. THERE HAVING COMMON DIRECTORS ON THE COMPANIES BOARD DID NOT BY ITSELF PROVE ANY COLOURABLE DEVICE, NOR HAS THE ASSESSING OFFICER BRING ON RECORD ANY MATERIAL TO SUPPORT HIS FINDING. THEREFORE, SUCH UNSUPPORTED FINDING CANNOT BE SUSTAINED. SECONDLY, THE FINDING THAT THE LESSEE COMPANY COULD EXERCISE RIGHTS IN HIS OWN RIGHTS AND SO THE INCOME EARNED BY IT FROM SUB - LETTING IS INCOME FROM HOUSE PROPERTY I ALSO NOT JUSTIFIED. IN R.B. JO DHA MAL K UTHIALA V. CIT [1971] 82 ITR 570 (SC), IT HAS BEEN HELD THAT OWN ER MUST BE THAT PERSON WHO CAN EXERCISE RIGHTS IN HIS OWN RIGHTS FOR THE PURPOSE OF SECTION 9 OF THE 1922 ACT [ CORRESPONDING TO SECTION 22 OF 1961 ACT ], THE OWNER MUST BE THAT PERSON WHO CAN EXERCISE THE RIGHTS OF THE OWNER, NOT ON BEHALF OF THE OWNER BU T IN HIS OWN RIGHTS. THIS WOULD MEAN THAT THE OWNER MUST HAVE THE RIGHT OF TRANSFER OF THE PROPERTY, WHICH IS NOT VESTED IN THE LESSEE. IN CIT V. SUPREME CREDIT CORPORATION LTD. [1998] 230 ITR 700 (CAL), IT HAS BEEN HELD THAT TO DEEM THE LESSEE AS THE OWNE R OF THE PROPERTY, THE LESSOR SHOULD NOT ONLY HAVE THE RIGHT TO RAISE NEW CONSTRUCTION ON THE LEASEHOLD PROPERTY BUT SHOULD ALSO, TO EXERCISE OF SUCH RIGHT, HAVE ACTUALLY RAISED THE NEW CONSTRUCTION AND SHOULD ALSO BE DERIVING INCOME FROM SUCH NEW CONSTRUC TION. SUCH A RIGHT IS ABSENCE IN LEASE DEEDS IN FAVOUR OF THE LESSEE. IN BHAI SUNDER DASS & SONS V. CIT [1972] 85 ITR 28 (DELHI)/ NEW COTTON & WOOL PRESSING FACTORY V. CIT [1967] 65 ITR 662 (RAJ), IT HAS BEEN HELD THAT PROPERTY OWNED BY A FIRM HAS TO BE TREATED AS THE PROPERTY OF THE FIRM AND NOT OF ITS PARTNERS AND ITS INCOME CAN BE ASSESSED 4 ITA NO.1042/K/2012 M/S. KONARK FURNITURE PVT. LTD AY 2007 - 08 ONLY IN THE HANDS OF THE FIRM. SIMILAR IS THE CASE OF THE ASSESSEE COMPANY. IN ORD ER TO DETERMINE WHETHER THE INCOME EARNED BY THE APPELLANT LESSEE/TENANT IS INCOME FROM BUSINESS OR INCOME FROM HOUSE PROPERTY OR INCOME FROM OTHER SOURCES FOR THAT MATTER, REFERENCE MAY BE USEFULLY MADE TO THE FOLLOWING LEGAL PROPOSITIONS: 1. NATURE OF ARRANGEMENT IS RELEVANT FACTOR. IT IS THE NATURE OF ARRANGEMENT AND THE REASONS THEREFORE THAT ARE RELEVANT FOR THE PURPOSE OF DETERMINING WHETHER ONE HAS LET OUT THE PROPERTY FOR BUSINESS PURPOSES OR FOR MERELY ENJOYING RENT. THIS IS THE TYPE OF TEST WHIC H IS COMMON TO ALL CASES. CIT V. SUPER FINE CABLES (P) LTD. [1985] 154 ITR 532 (DELHI)/CIT V. PREM CHAND JUTE MILLS LTD. [1978] 114 ITR 769 (CAL)/EVEREST HOTELS LTD. V. CIT [1978] 114 ITR 779 (CAL)(APP.) DHARAK LTD. V. CIT [1987] 163 ITR 734 (KAR.) WHERE UNDER THE TERMS OF THE LEASE OF BUSINESS ASSETS, THE INTENTION OF THE LESSOR IS THAT THE ASSET LEASED OUT MUST REMAIN AND BE TREATED AS COMMERCIAL ASSET, THERE IS AN EXPLOITATION OF THE COMMERCIAL ASSET DURING THE LEASE PERIOD AND LEASE RECEIVED IS ASSESSA BLE AS BUSINESS INCOME. 2. CIT VS. PREMCHAND JUTE MILLS LTD . 114 ITR 769 (CAL): WHERE THE CLAUSES OF THE LEASE AGREEMENT ENTERED INTO BY THE ASSESSEE FOR LETTING OUT ITS ASSETS INDICATE THE INTENTION OF THE LESSOR ASSESSEE TO MAINTAIN AND TO ENSURE THAT T HE ASSET RETAIN THEIR COMMERCIAL CHARACTER, FACILITATING THE RESUMPTION OF COMMERCIAL USE OF THE SAID ASSET BY THE LESSOR ITSELF, THE TRANSACTION OF LETTING OUT IS A BUSINESS ACTIVITY AND THE INCOME DERIVED THEREFROM IS ASSESSABLE AS BUSINESS INCOME. 3. K ARANANI PROPERTIES LTD. VS. COMMISSIONER OF INCOME TAX (1971) 82 ITR 547 (SC): THE ASSESSEE COMPANY WHICH IS THE OWNER OF RESIDENTIAL FLATS AND SHOPS LET OUT BY IT, ALSO PROVIDED SERVICES LIKE PURCHASING CURRENT IN BULK AND SUPPLYING THE SAME TO TENANTS, P ROVISION OF HOT AND COLD WATER, SCAVENGING AND LIFT SERVICES AND MAINTAINED A LARGE STAFF FOR THE PROVISION SUCH SERVICES FROM THE FACTS FOUND BY THE TRIBUNAL IT FOLLOWS THAT THE SERVICES RENDERED BY THE ASSESSEE TO ITS TENANTS WERE THE RESULTS OF ITS ACT IVITIES CARRIED ON CONTINUOUSLY IN AN ORGANIZED MANNER WITH A SET PURPOSE AND WITH A VIEW TO EARN PROFITS. HENCE THOSE ACTIVITIES HAVE TO BE CONSIDERED AS BUSINESS ACTIVITIES. DECISION OF CALCUTTA HIGH COURT DATED 16 TH JUNE, 1967 IN IT REF. NO. 20 OF 1963 REVERSED. THE APPELLANT COMPANY HAS SPECIFICALLY SHOWN TO HAVE CARRIED OUT THE FOLLOWING ACTIVITIES IN ORDER TO EARN THE INCOME: 1. TO ENSURE REGULAR SUPPLY OF WATER 2. TO KEEP OUTSIDE AREA CLEAN AND HYGIENIC. 3. TO KEEP COMMON PARTS CLEAN AND PROPERLY LIGHTED. 4. TO LIASON WITH CESC REGARDING SUPPLY OF ELECTRICITY 5. TO PROVIDE GENERAL SECURITY. THESE ARE ACTIVITIES OF REGULAR IN NATURE AND ARE SERVICES TO THE TENANTS WITH A SET PURPOSE AND WITH A VIEW TO EARN PROFITS. THEREFORE, FOLLOWING THE RATIO LAID DOWN BY THE HON BLE SUPREME COURT IN THE CASE CITED SUPRA, THESE ACTIVITIES HAVE TO BE CONSIDERED AS BUSINESS ACTIVITIES AND THE INCOME EARNED HAS TO BE CONSIDERED AS BUSINESS INCOME. IT MAY ALSO BE NOTED HERE THAT IN THE EARLIER ASSESSMENT YEARS, THE INCOME FROM THE SUB - LETTING AND OTHER SERVICES TO THE TENANTS HAS BEEN SHOWN AND ASSESSED AS PROFITS AND GAINS OF BUSINESS. IN VIEW OF THE FACTS AND CIRCUMSTANCES AND THE LEGAL POSITION AS DISCUSSED, I AM OF THE CONSIDERED VIEW THAT THE INCOME FROM SUB - LETTING AND OTHER SERVICES IS ASSESSABLE IN THE HANDS OF THE APPELLANT COMPANY AS PROFITS AND GAINS OF BUSINESS. SINCE THE ASSESSING OFFICER HAS NOT POINTED OUT ANY SPECIFIC DEFECTS IN THE MAINTENANCE OF BOOKS OF ACCOUNT OR REGARDING THE REASONABILITY OF THE EXPENSES INCURR ED, HE IS DIRECTED TO ACCEPT THE BOOK RESULTS AS SHOWN. 5 ITA NO.1042/K/2012 M/S. KONARK FURNITURE PVT. LTD AY 2007 - 08 AGGRIEVED, NOW REVENUE CAME IN APPEAL BEFORE US. 5 . WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSEE IS A REGISTERED LIMITED C OMPANY DERIVING ITS INCOME FROM LICENCE FEES FROM DIFFERENT SUB - TENANTS. THE ASSESSEE IS A TENANT OF DALHOUSIE PROPERTIES LTD. UNDER TENANCY AGREEMENT DATED 01 - 04 - 2001 IN RESPECT OF GROUND FLOOR SPACE AT STEPHEN HOUSE - 63 & 58 OF HEMANTA BASU SARANI, KOLKAT A - 700 001. THE ASSESSEE WAS GIVEN RIGHT TO, ASSIGNED, SUB - LET, UNDER - LET OR PART WITH ANY POSSESSION OF THE ROOM OR ANY PART OF ROOM OR PERMIT ANY PERSON TO OCCUPY EVEN IN CASE OF TEMPORARY ABSENCE OF ASSESSEE . BY VIRTUE OF THIS AGREEMENT ASSESSEE COLLEC TED LICENCE FEES AND OTHER CHARGES FROM SUB - TENANTS AND THE REVENUE ALL ALONG HAS ACCEPTED THE INCOME DECLARED BY THE ASSESSEE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION . LD. COUNSEL B EFORE US ARGUED ON THE CONCEPT OF CONSISTENCY ON THE G IVEN FACTS OF THE CASE . IN THIS CASE ALSO THE TERMS OF THE LEASE OF BUSINESS ASSETS, THE INTENTION OF THE LESSOR IS THAT THE ASSET LEASED OUT MUST REMAIN AND BE TREATED AS COMMERCIAL ASSET AND THERE IS AN EXPLOITATION OF THE COMMERCIAL ASSET DURING THE LEASE PERIOD AND LEASE RECEIVED IS ASSESSABLE AS BUSINESS INCOME. IN VIEW OF THE ABOVE FACTS OF THE CASE THAT THE ASSESSEE IS CONSISTENTLY DECLARING THE RECEIPT OF INCOME FROM SUB TENANTS UNDER T HE HEAD, PROFITS AND GAINS OF BUSINESS OR PROFESSION , WE ARE OF THE VIEW THAT PRINCIPLE OF CONSISTENCY WILL APPLY IN THIS CASE AS THE ISSUE STAND COVERED BY THE DECISION OF COORDINATE BENCH IN THE CASE OF M/S. BANWARILAL G OEL & SONS VS. ITO IN ITA NO. 37 4/K/2009 FOR AY 2005 - 06 DATED 13.02.2014 , WHEREIN IT IS HELD AS UNDER: - 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE HON BLE CALCUTTA HIGH COURT IN THE CASE OF SHAMBHU INVESTMENT HELD THAT THE MERE FACT OF ATTACHMENT OF INCOME TO ANY IMMOVABLE PROPERTY CANNOT BE THE SOLE FACTOR FOR ASSESSMENT OF SUCH INCOME AS INCOME FROM HOUSE PROPERTY. IT IS NECESSARY TO FIND OUT THE PRIMARY OBJECT OF ASSESSEE WHIL E EXPLOITING THE PROPERTY. IF IT IS FOUND 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 HOUSE 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 . THE VIEW WAS EXPRESSED BY HON BLE CALCUTTA HIGH COURT AND APPROVED BY HON BLE SUPREME COURT IN CASE OF SHAMBHU INVESTMENT (P) LTD.(SUPRA) IN THIS VIEW OF THE MATTER, IT IS CLEAR THAT WHAT IS TO BE REALLY SEEN IS WHETHER THE PROPERTY IS EXPLOITED BY WAY OF COMPLEX COMMERCIAL ACTIVITY OR NOT. IN THIS BACKDROP, IT IS QUITE APPROPRIATE TO REFER TO THE OBSERVATIONS MADE BY THE HON BLE SUPREME COURT IN THE LANDMARK JUDGMENT OF RADHASOAMY SATSANG (SUPRA), REFERRING TO THE CASE LAW OF HOYSTEAD V COMMISSIONER OF TAXATION [1926] AC 155 (PC), WHEREIN IT IS OBSERVED AS UNDER : - PARTIES ARE NOT PERMITTED TO BEGIN FRESH LITIGATIONS BECAUSE OF NEW VIEWS THE Y MAY ENTERTAIN OF THE LAW OF THE CASE, OR NEW VERSIONS WHICH THEY PRESENT AS TO WHAT SHOULD BE A PROPER APPREHENSION BY THE COURT OF THE LEGAL RESULT EITHER OF THE CONSTRUCTION OF THE DOCUMENTS OR THE WEIGHT OF CERTAIN CIRCUMSTANCES. IF THIS WERE PERMITTE D LITIGATION WOULD HAVE NO END, EXCEPT WHEN LEGAL INGENUITY IS EXHAUSTED. IT IS A PRINCIPLE OF LAW THAT THIS CANNOT BE PERMITTED, AND THERE IS ABUNDANT AUTHORITY REITERATING THAT PRINCIPLE. THIRDLY, THE SAME PRINCIPLE NAMELY, THAT OF A SETTING TO REST RI GHTS OF LITIGANTS, APPLIES TO THE CASE WHERE A POINT, FUNDAMENTAL TO 6 ITA NO.1042/K/2012 M/S. KONARK FURNITURE PVT. LTD AY 2007 - 08 THE DECISION, TAKEN OR ASSUMED BY THE PLAINTIFF AND TRAVERSABLE BY THE DEFENDANT HAS NOT BEEN TRAVERSED. IN THAT CASE ALSO A DEFENDANT IS BOUND BY THE JUDGMENT ALTHOUGH IT MAY BE TRUE ENO UGH THAT SUBSEQUENT LIGHT OR INGENUITY MIGHT SUGGEST SOME TRAVERSE WHICH HAD NOT BEEN TAKEN . HON BLE SUPREME COURT ALSO REFERRED TO THEIR OWN JUDGMENT IN THE CASE OF PARASHURAM POTTERY WORKS CO. LTD. V ITO [1977] 106 ITR 1 (SC), WHEREIN AT PAGE 10 IT WAS STATED THAT AT THE SAME TIME, WE HAVE TO BEAR IN MIND THAT THE POLICY OF LAW IS THAT THERE MUST BE A POINT OF FINALITY IN ALL LEGAL PROCEEDINGS, THAT STALE ISSUES SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE AND THAT LAPSE OF TIME MUST INDUCE REPO SE IN AND SET AT REST JUDICIAL AND QUASI - JUDICIAL CONTROVERSIES AS IT MUST IN OTHER SPHERES OF HUMAN ACTIVITY . HON BLE SUPREME COURT WAS OF THE VIEW THAT THE ASSESSMENTS ARE CERTAINLY QUASI - JUDICIAL AND OBSERVATIONS SO MADE IN THE CASE OF PARASHURAM POTTE RY WORKS CO. LTD. (SUPRA) WOULD APPLY TO THE ASSESSMENT PROCEEDINGS. IN THE CASE OF PARASHURAM POTTERY WORKS CO. LTD. IT WAS OBSERVED THAT RES JUDICATA DOES NOT APPLY TO INCOME TAX PROCEEDINGS AND EACH ASSESSMENT YEAR BEING A UNIT, WHAT IS DECIDED IN ONE YEAR MAY NOT APPLY IN THE FOLLOWING YEAR BUT WHERE A FUNDAMENTAL ASPECT PERMEATING THROUGH THE DIFFERENT ASSESSMENT YEARS HAS BEEN FOUND AS A FACT ONE WAY OR THE OTHER AND PARTIES HAVE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING THE ORDER, IT WOULD NOT BE AT ALL APPROPRIATE TO ALLOW THE POSITION TO BE CHANGED IN A SUBSEQUENT YEAR . THIS PRINCIPLE HAS BEEN UPHELD AND RE - STATED BY HON BLE SUPREME COURT RECENTLY IN THE CASE OF PFH MALL & RETAIL MANGT. P. LTD. DATED 04.09.2012, WHEREIN REITERATED THE RULE OF CONSISTENCY AND APPLIED THE SAME ON THE VERY ISSUE, THAT IS WHETHER THE INCOME IN QUESTION IS TO BE TREATED AS INCOME FROM BUSINESS OR AS INCOME FROM HOUSE PROPERTY. IN VIEW OF THESE DISCUSSIONS AND BEARING IN MIND THE FACT THAT IT WAS A CASE O F RENTAL OR COMMERCIAL UTILIZATION OF PROPERTIES, WHICH HAS BEEN ACCEPTED, WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO REASON TO UPHOLD THIS DEVIATION. IN VIEW OF THE ABOVE DISCUSSIONS, WE UPHOLD THE GRIEVANCE OF THE ASSESSEE AND DIRECT THE ASSESSING OF FICER TO TREAT THE INCOME IN QUESTION AS INCOME FROM BUSINESS AS HAS BEEN IN PRECEDING AND SUBSEQUENT ASSESSMENT YEAR. THIS ISSUE OF ASSESSEE S APPEAL IS ALLOWED. 6. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, WE CONFIRM THE ORDER OF CIT(A) AND THIS ISSUE OF REVENUE S APPEAL IS DISMISSED 7 . IN THE RESULT, REVENUE S APPEAL IS DISMISSED ORDER PRONOUNCED IN OPEN COURT ON 1 2 / 1 2 /2014 . S D / - S D / - , , ( SHAMIM YAHYA ) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 2 T H DECEMBER , 2014 DKP* - COPY OF THE ORDER FORWARDED TO: 1 . / A PPELLANT IT O, WARD - 8(3) , AAYAKAR BHAWAN P - 7, CHOWRINGHEE SQUARE,5 TH FL, R - 5/17, KOLKATA - 700 069 7 ITA NO.1042/K/2012 M/S. KONARK FURNITURE PVT. LTD AY 2007 - 08 2 / RESPONDENT M/S KONARK FURNITURE PVT. LTD. 1, HUMAYUN PLACE, K OL KATA 700 087 3 . ( )/ THE CIT(A), KOLKATA 4. 5. / CIT KOLKATA / DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, / BY ORDER, /ASSTT. REGISTRAR .