DCIT, Circle - 8, Kolkata, Kolkata V. M/s. LCI ( India) Ltd., Kolkata

ITA 1142/KOL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62098 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 05-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P LAHIRI
• Assessee Lawyers: S M SURANA
• Keywords: Business income; Rule of consistency
• Section: 148; 143(3)

Judgement Text

I.T.A. NO.: 1142 / KOL. / 2011 ASSESSMENT YEAR : 2007-08 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER), AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO.: 1142/ KOL. / 2011 ASSESSMENT YEAR : 2007-08 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-8, KOLKATA .APPELLANT VS. M/S. LCI (INDIA) LTD., 75C, PARK STREET, 2 ND FLOOR, KOLKATA-700 016 RESPONDENT [ PAN : AAACL 5741 Q] APPEARANCES BY: S.P. LAHIRI, FOR THE APPELLANT S.M. SURANA, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : MAY 17, 2012 DATE OF PRONOUNCING THE ORDER : MAY 17, 2012 O R D E R PER GEORGE MATHAN : 1. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST T HE ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS)-VIII, KOLKATA I N APPEAL NO. 480/CIT(A.)-VIII/KOL./CIR-8/09-10 DATED 14.06.2011 FOR THE ASSESSMENT YEAR 2007-08. 2. IN REVENUES APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUND:- THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE INCOM E EARNED BY WAY OF RENT FROM LETTING OUT GODOWNS ON MONTHLY RENT IS ASSESSABLE AS INCOME FROM BUSINESS I.T.A. NO.: 1142 / KOL. / 2011 ASSESSMENT YEAR : 2007-08 PAGE 2 OF 6 INSTEAD OF INCOME FROM HOUSE PROPERTY AS ASSESSED B Y THE ASSESSING OFFICER FOR ASSESSMENT YEAR 2007-08. 3. IT WAS SUBMITTED BY THE LD. D.R. THAT THE ASSESS EE IS A COMPANY WHICH IS DERIVING RENTAL INCOME FROM GODOWN. IT WAS SUBMITTED THAT THE ASSESSEE HAS CLAIMED RENTAL INCOME RECEIVED ON THE FOUR GODOWNS AS INCOME FROM BUSINESS. IT WAS THE SUBMISSION THAT AS SESSING OFFICER HAD AFTER VERIFYING THE DETAILS HELD THAT THE RENTAL IN COME FROM THE GODOWNS WAS LIABLE TO BE ASSESSED ONLY UNDER THE HE AD INCOME FROM HOUSE PROPERTY. CONSEQUENTLY THE ASSESSMENT HAD BE EN COMPLETED UNDER SECTION 143(3) ON 31.12.2009 ASSESSING THE RE NTAL INCOME FROM FOUR GODOWNS AS INCOME FROM HOUSE PROPERTY. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD FILED AN APPEAL BEFORE LD. CI T(APPEALS), WHO HAD VIDE HIS ORDER DATED 14.06.2011 HELD THAT THE INCOM E FROM THE GODOWNS WAS LIABLE TO BE ASSESSED ONLY UNDER THE HEAD BUSI NESS. THE SUBMISSION OF LD. D.R. THAT THE REASON GIVEN BY THE LD. CIT(APPEALS) WAS THAT IN THE EARLIER AND SUBSEQUENT ASSESSMENT Y EAR, THE REVENUE HAD HELD THE RENTAL INCOME FROM THE GODOWNS AS BUSI NESS INCOME DECLARED BY THE ASSESSEE. IT WAS THE SUBMISSION BY LD. D.R. THAT RE- ASSESSMENT YEAR IS SEPARATE AND THE LAW AS IS CORRE CTLY PREVAILED HAS TO BE APPLIED FOR THE ASSESSMENT YEAR. IT WAS THE SUBM ISSION THAT THE ASSESSEE HAVING BEEN RELIED ONLY ON RENTAL INCOME, THE SAME IS LIABLE TO BE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. IT WAS THE SUBMISSION THAT THE ORDER OF LD. CIT(APPEALS) WAS L IABLE TO BE REVERSED. 4. IN REPLY, LD. A.R. FOR THE ASSESSEE DREW OUR ATT ENTION TO PAGES 5-7 OF THE PAPER BOOK FILED BY THE ASSESSEE, WHICH IS A COPY OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 1999-2000 PASSED UNDER I.T.A. NO.: 1142 / KOL. / 2011 ASSESSMENT YEAR : 2007-08 PAGE 3 OF 6 SECTION 143(3) R.W.S. 147, WHEREIN WAREHOUSING/ REN TAL INCOME OF THE ASSESSEE HAD BEEN ASSESSED UNDER THE HEAD BUSINESS AS DISCLOSED BY THE ASSESSEE. IT WAS THE SUBMISSION OF LD. A.R. THA T THE SAID ASSESSMENT ORDER WAS DATED 17.11.2006. HE FURTHER DREW OUR ATT ENTION TO PAGE 36 OF THE PAPER BOOK, WHICH IS A COPY OF THE ASSESSMENT O RDER FOR THE ASSESSMENT YEAR 2006-07, WHEREIN THE INCOME OF THE ASSESSEE HAS BEEN ASSESSED UNDER THE HEAD BUSINESS. IT WAS THE SUBM ISSION THAT UNDER THE ASSESSMENT YEAR THE INCOME OF THE ASSESSEE WAS ONLY RENTAL INCOME. IT WAS THE SUBMISSION THAT THE SAID ASSESSMENT ORDE R IS DATED 31.12.2010, WHICH IS SUBSEQUENT TO THE ASSESSMENT O RDER PASSED FOR THE IMPUGNED ASSESSMENT YEAR UNDER APPEAL. HE ALSO DREW OUR ATTENTION TO PAGE 21 OF THE PAPER BOOK, WHICH IS A COPY OF THE A SSESSMENT ORDER FOR ASSESSMENT YEAR 2004-05, WHEREIN ALSO RENTAL INCOME OF THE ASSESSEE HAS BEEN ASSESSED UNDER THE HEAD INCOME FROM BUSINESS . IT WAS THE SUBMISSION THAT FOR THE ASSESSMENT YEAR 2004-05 ALS O, THE DATE OF THE ORDER WAS 31.12.2010. IT WAS THE SUBMISSION THAT FO R THE EARLIER AND SUBSEQUENT ASSESSMENT YEAR, THE INCOMES OF THE ASSE SSEE FROM THE LETTING OUT OF THE GODOWNS HAVE BEEN ACCEPTED AND A SSESSED UNDER THE HEAD INCOME FROM BUSINESS AS DISCLOSED BY THE ASS ESSEE. IT WAS FURTHER SUBMISSION OF LD. A.R. THAT THE ASSESSMENT ORDER WHICH HAS BEEN PASSED SUBSEQUENTLY WAS ALSO REOPENED THE ASSESSMEN T. IT WAS ALSO THE SUBMISSION THAT EVEN AFTER COMPLETING THE ASSESSMEN T FOR SUBSEQUENT YEARS ASSESSING THE INCOME OF THE ASSESSEE UNDER TH E HEAD BUSINESS INCOME, THE REVENUE HAS DECIDED TO FILE AN APPEAL AGAINST THE ORDER OF LD. CIT(APPEALS) FOR THE ASSESSMENT YEAR 2007-08. I T WAS THE SUBMISSION THAT IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF RADHOSAMI SATSANG VS.-CIT REPORTED IN 193 ITR 321, THE ASSESSEE IS ENTITLED TO THE PRINCIPLE OF CONSISTENCY AS THE FAC TS REMAIN THE SAME FOR I.T.A. NO.: 1142 / KOL. / 2011 ASSESSMENT YEAR : 2007-08 PAGE 4 OF 6 ALL THESE ASSESSMENT YEARS. IT WAS THE SUBMISSION T HAT THE ORDER OF LD. CIT(APPEALS) MAY BE SUSTAINED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CA SE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. PERUSAL OF THE ASSESSMEN T ORDERS FOR THE EARLIER AND SUBSEQUENT ASSESSMENT YEARS CLEARLY SHO W THAT SECTION 148 NOTICES HAVE BEEN ISSUED TO TREAT THE INCOME FROM L EASING OUT OF THE GODOWNS AS INCOME FROM HOUSE PROPERTY AS AGAINST IN COME FROM BUSINESS AS DISCLOSED BY THE ASSESSEE. IT WAS FURTH ER NOTICED THAT AFTER THE ISSUANCE OF NOTICE UNDER SECTION 148 AND AFTER CONSIDERING THE EVIDENCES PRODUCED, THE ASSESSING OFFICER HAS ACCEP TED THE CLAIM OF THE ASSESSEE THAT INCOME FROM THE LEASING OUT OF THE GO DOWNS IS LIABLE TO BE ASSESSED ONLY UNDER THE HEAD INCOME FROM BUSINESS . THE IMPUGNED ASSESSMENT YEAR UNDER APPEAL BEING ASSESSMENT YEAR 2007-08 SEEMS TO BE ONLY ASSESSMENT YEAR IN WHICH THE INCOME OF THE ASSESSEE HAS BEEN ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AS AGAINST THE HEAD INCOME FROM BUSINESS. IT WAS ALSO NOTICED TH AT AFTER PASSING CORRECT ASSESSMENT ORDER FOR THE IMPUGNED ASSESSMEN T YEAR, EARLIER ASSESSMENT AS WELL AS SUBSEQUENT ASSESSMENT YEARS H AVE BEEN COMPLETED ACCEPTING THE CLAIM OF THE ASSESSEE THAT INCOME IS LIABLE TO BE ASSESSED UNDER THE HEAD INCOME FROM BUSINESS. THEREFORE, IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF RADHOSAMI SATSANG (SUPRA), WHEREIN IT HAS BEEN HELD THAT EVEN THOUGH THE PRINCIPLES OF RES JUDICATA HAVE NO APPLICATION IN INCOME-TAX PROCEEDINGS, THE PRINCIPLES OF CONSISTENCY SHOULD B E FOLLOWED, AND WHEREIN THEIR LORDSHIPS HAD TAKEN NOTE OF THE EARLI ER HONBLE SUPREME COURTS DECISION IN THE CASE OF PARASHURAM POTTERY WORKS CO. LTD. VS.- I.T.A. NO.: 1142 / KOL. / 2011 ASSESSMENT YEAR : 2007-08 PAGE 5 OF 6 ITO REPORTED IN [1977] 106 ITR 1 AT PAGE 10, WHEREI N IT WAS OBSERVED THAT 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 ST ALE ISSUES SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE AND THAT LAPS E OF TIME MUST INDUCE REPOSE IN AND SET AT REST JUDICIAL AND QUASI-JUDICI AL CONTROVERSIES AS IT MUST IN OTHER SPHERES OF HUMAN ACTIVITY. UNDOUBTEDLY EVERY ASSESSMENT YEAR IS AN INDEPENDENT UNIT AND WHAT IS DECIDED IN DUE A SSESSMENT YEAR MAY OR MAY NOT BE APPLIED TO THE FOLLOWING YEARS, HOWEV ER, WHERE A FUNDAMENTAL ASPECT PERMEATING THROUGH THE DIFFERENT ASSESSMENT YEARS HAS BEEN FOUND AS A FACT ONE WAY OR THE OTHER AND P ARTIES HAVE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING TH E ORDER, IT WOULD NOT BE AT ALL APPROPRIATE TO ALLOW THE POSITION TO BE C HANGED IN A SUBSEQUENT YEAR. IN THE PRESENT CASE, WE ARE DEALIN G WITH A SITUATION IN WHICH AFTER PASSING THE IMPUGNED ORDER ON 31.12.200 9, THIS VERY ASSESSING OFFICER ON 31.12.2010 HOLDS THE VIEW THAT INCOME FROM LETTING OF GODOWNS IS TO BE TREATED AS BUSINESS INCOME. ONC E SO IS THE VIEW TAKEN BY THE ASSESSING OFFICER IN ASSESSEES OWN CA SE FOR SUBSEQUENT YEAR, THERE CANNOT BE ANY GOOD REASON FOR THE ASSES SING OFFICER TO CHALLENGE CIT(A)S HOLDING SO. AS A MATTER OF FACT, IN VIEW OF THE PRINCIPLE OF CONSISTENCY ALONE, THE APPEAL OF THE R EVENUE MUST FAILS. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THE ORDER IS DICTATED AND PRONOUNCED IN THE OPEN COURT IMMEDIATE LY UPON CONCLUSION OF HEARING TODAY ON 17 TH DAY OF MAY, 2012. SD/- SD/- PRAMOD KUMAR GEORGE MATHAN (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, THE 17 TH DAY OF MAY, 2012 I.T.A. NO.: 1142 / KOL. / 2011 ASSESSMENT YEAR : 2007-08 PAGE 6 OF 6 COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.