JOINT COMMISSIONER OF INCOME TAX - CENTRAL CIRCLE 7(2), MUMBAI V. SHREEJI EXHIBITORS, MUMBAI

ITA 1180/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4102 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2013-2014
• Appeal Filed On: 28-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: V MOHAN
• Keywords: Business income; Question of law; Set aside
• Section: 143(3)

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI S . RIFAUR RAHMAN, AM & SHRI RAVISH SOOD , JM ./ I.T.A. NO . 1180 / MUM/ 2018 ( / ASSESSMENT YEAR: 2013 - 14 ) JCIT CC 7(2) ROOM NO. 655, 6 TH FLOOR, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI - 400 020 / VS. SHREEJI EXHIBITORS, OLD S. NO. 677(7A), NEW S. NO. 277, NEAR TEMBA HOSPITAL, SHREE VALLABHACHARAJI MARG, BHAYABNDER (WEST), THANE 401 101. ./ ./ PAN NO. A BCFS 4464 M ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI VINOD KUMAR, DR / RESPONDENTBY : SHRI V. MOHAN, AR / DATE OF HEARING : 21.11.2019 / DATE OF PRONOUNCEMENT : 08.01.2020 / O R D E R PER S. RIFAUR RAHMAN (ACCOUNTANT MEMBER) : THE PRESENT A PPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF LD. COMMIS S IONER OF INCOME TAX (APPEALS) - 49 , MUMBAI, IN SHORT LD. CIT(A) D ATED 12.12.17 FOR AY 2013 - 14 . 2 I.T.A. NO. 1180 /MUM/201 8 SHREEJI EXHIBITORS, 2 . THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF COLLECTION OF INCOME BY EXHIBITION OF FEATURE FILMS AT MULTIPLEX AND COLLECTING INCOME THROUGH LETTING OUT PROPERTY FOR COMMERCIAL EXPLOITATION. THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 30.09.13 DECL ARING TOTAL INCOME AT RS. 1,09,90,200/ - . THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 28.03.16 DETERMINING THE TOTAL INCOME AT RS. 3,66,15,730/ - . 3 . AGGRIEVED BY THE ABOVE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE CASE OF BOTH THE PARTIES, PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE. 4 . NOW BEFORE US, THE REVENUE HAS PREFE RRED THE APPEAL BY RAISING THE GROUNDS OF APPEAL AS UNDER: - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.C IT (A) WAS JUSTIFIED IN HOLDING THAT THE ASSESSEE HAD EXPLOITED ITS PROPERTY COMMERCIALLY BY WAY OF COMPLEX COMMERCIAL ACTIVITIES AND HENCE, THE RENTAL INCOME AMOUNTING TO RS.4,30,44,648/ - RECEIVED BY THE ASSESSEE TO BE TAXABLE 3 I.T.A. NO. 1180 /MUM/201 8 SHREEJI EXHIBITORS, AS I NCOME FROM BUSINESS AND NOT UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) WAS JUSTIFIED IN IGNORING THE SETTLED POSITION OF LAW THAT WHERE THE MAIN INTENTION IS TO SIMPLY LET OUT PROPERTY OR ANY PART OF IT, THE RESULTANT INCOME MUST BE ASSESSED AS INCOME FROM HOUSE PROPERTY AND THE AMENITIES SUCH A ELECTRICITY, COOLING TOWERS, ELEVATORS AND CAR PARKING PROVIDED BY THE ASSESSEE TO ITS TENANT WERE INCIDENTAL TO LETTING OUT O F THE PROPERTY AND COULD NOT BE TERMS AS COMPLEX COMMERCIAL TO JUSTIFY THE ASSESSMENT OF RENTAL INCOME AS INCOME FROM BUSINESS.' THE APPELLANT PRAYS THAT THE ORDER OF CIT(A), MUMBAI ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RES TORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND AND/OR ADD NEW GROUNDS WHICH MAY BE NECESSARY. 5 . AT THE OUTSET, LD. AR APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT TH E GROUNDS RAISED BY THE REVENUE ARE SQUARELY COVERED BY THE ORDER OF COORDINATE BENCH OF HONBLE ITAT IN 4 I.T.A. NO. 1180 /MUM/201 8 SHREEJI EXHIBITORS, ITA NO. 5511/MUM/2015 FOR AY 2011 - 12 IN ASSESSEES OWN CASE AND THE SAME WAS CONFIRMED BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN ITA NO. 1212 OF 2017. 6 . ON THE OTHER HAND, LD. DR SUPPORTED THE ORDERS P ASSED BY THE REVENUE AUTHORITIES. 7 . WE HAVE HEARD COUNSELS FOR BOTH THE PARTIES AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. WE FIND THAT THE IDENTICAL GROUND RAISED IN THE PRESENT APPEAL HAS ALREADY BEEN DECIDED BY THE COORDINATE BENCH OF ITAT IN ITA NO. 640/MUM/2014 & MA NO. 211/MUM/2015 AND ITA NO. 5511/MUM/2015 FOR AY 2011 - 12 IN ASSESSEES OWN CASE AND THE SAME WAS CONFIRMED BY THE DECISION OF HONBLE B OMBAY HIGH COURT IN ITA NO. 807 OF 2016 , WHICH IS REPRODUCED BELOW: - 2. THE REVENUE URGES THE FOLLOWING QUESTION OF LAW FOR OUR CONSIDERATION: 1. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE HONBLE 5 I.T.A. NO. 1180 /MUM/201 8 SHREEJI EXHIBITORS, ITAT WAS JUST IFIED IN HOLDING THAT THE ASSESSEE HAD EXPLOITED ITS PROPERTY COMMERCIALLY BY WAY OF COMPLEX COMMERCIAL ACTIVITIES AND HENCE THE RENTAL INCOME RECEIVED BY THE ASSESSEE TO BE TAXABLE AS INCOME FROM BUSINESS AND NOT UNDER THE HEAD INCOME FROM HOUSE PROPERTY? ' 3. THE BASIC ISSUE WHICH ARISES IN THIS APPEAL IS WHETHER INCOME FROM LETTING OUT SHOPPING MAIL AND CINEMA THEATRE ALONGWITH MULTIPLEX CENTRE IS TO BE HELD 'INCOME FROM HOUSE PROPERTY' AS CONTENDED BY THE REVENUE OR 'BUSINESS INCOME' AS CONTENDED BY THE ASSESSEE. BRIEFLY, THE FACTS ARE THAT THE RESPONDENT - ASSESSEE IS A PARTNERSHIP FIRM ENGAGED INTO THE BUSINESS OF CONSTRUCTION AND MAINTENANCE OF MALL, LE TTING OUT PREMISES ON LEASE AND PROVIDING AMENITIES THEREIN AND EXHIBITION OF FEATURE FILMS AT MULTIP LEX. IN THE SUBJECT ASSESSMENT Y EAR THE RESPONDENT OFFERED ITS INCOME ON THE ABOVE ACCOUNT UNDER THE HEAD OF INCOME FROM BUSINESS OR PROF ESSION. HOWEVER, T HE ASSESSING OFFICER DID NOT ACCEPT IT AND TREATED THE INCOME THEREFROM AS 'INCOME FROM HOUSE PROPERTY'. 4. BEING AGGRIEVED, THE RESPONDENT FILED AN APPEAL TO THE COMMISSIONER OF INCOME TAX (APPEALS) (CIT(A)). HOWEVER, APPEAL OF THE RESPON DENT WAS DISMISSED ON 10 TH DECEMBER, 2013 6 I.T.A. NO. 1180 /MUM/201 8 SHREEJI EXHIBITORS, 5. BEING AGGRIEVED BY THE ORDER DATED 10 TH DECEMBER, 2013 OF THE GIT (A), THE RESPONDENT FILED AN APPEAL TO THE TRIBUNAL. THE IMPUGNED ORDER OF THE TRIBUNAL NOTED THE FACT THAT THE ASSESSEE'S ACTIVITY OF LETTING OU T BUILDING PREMISES IS ITS BUSINESS ACTIVITY. THIS, THE TRIBUNAL OBSERV ED IT IS CLEAR FROM OBJECTS OF THE RESPONDENT AS SET OUT IN ITS PARTNERSHIP DEED VIZ. TO DEAL WITH PROPERTIES I.E. TO CONSTRUCT REAL ESTATE, MULTIPLEX CENTRE, ENTERTAINMENT COMPLEX ETC. AND OPERATE AND MANAGE THE SAME. ON THE BASIS OF THE ABOVE OBJECT CLAUSE THE IMPUGNED ORDER DATED 14 TH AUGUST, 2015 PLACED RELIANCE ON CHENNAI PROPERTIES & INVESTMENT LIMITED VS. GIT 1 , TO HOLD THAT THE OBJECTS CLAUSE OF THE RESPONDENT - ASSESSEE'S PARTNERSH IP DEED WOULD BE THE DETERMINING FACTOR TO DECIDE THE NATURE OF INCOME. ON THE ABOVE BASIS, IT CONCLUDED THAT IT IS BUSINESS INCOME. IN CASE OF CHENNAI PRQPERTIES & INVESTMENT LIMITED (SUPRA) THE OBJECT OF THE ASSESSEE THEREIN WAS TO ACQUIRE PROPERTIES AND LET OUT THE SAME. IN ABOVE VIEW THE APPEAL OF THE RESPONDENT WAS ALLOWED AND HELD THAT THE INCOME FROM LETTING OUT OF BUSINESS PREMISES WAS TAXABLE UNDER THE HEAD BUSINESS INCOME NOT INCOME FROM THE HOUSE PROPERTY. 6. IN VIEW OF THE FACT THAT THE TRIBUNAL HAS APPLIED APEX COURT DECISION IN CHENNAI PROPERTIES & INVESTMENT LIMITED (SUPRA), ON SIMILAR FACTS, THE 7 I.T.A. NO. 1180 /MUM/201 8 SHREEJI EXHIBITORS, PROPOSED QUESTION OF LAW DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW. THEREFORE, NOT ENTERTAINED. 7. ACCORDINGLY, APPEAL DISMISSED. NO ORD ER AS TO COSTS. 8. T HEREFORE , RESPECTFULLY FOLLOWING THE DECISION OF HONBLE BOMBAY HIGH COURT, WHICH IS APPLICABLE MUTATIS MUTANDIS IN THE PRESENT CASE, WE DISMISS THE GROUND S RAISED BY THE REVENUE . 9 . IN THE NET RESULT, THE APPEAL FILED BY THE REVENUE STA NDS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH JAN 2020 . SD/ - SD/ - (RAVISH SOOD ) (S. RIFAUR RAHMAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 08 . 01.2020 SR.PS. DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 8 I.T.A. NO. 1180 /MUM/201 8 SHREEJI EXHIBITORS, 6. / GUARD FILE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI