ITO, Ward - 13(1), Kolkata , Kolkata V. M/s. Ashamangal Portfolio Pvt. Ltd., Howrah

ITA 132/KOL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3146 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 30-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANKAR HALDAR
• Assessee Lawyers: R K JAIN
• Keywords: Business income
• Section: 143(3); 28; 2

Judgement Text

ITA NO. 132/KOL/2018 ASSESSMENT YEAR: 2014-2015 M/S. ASHAMANGAL PORTFOLIO PVT. LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA D BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI A.T. VARKEY, JUDICIAL MEMBER I.T.A. NO. 132/KOL/2018 ASSESSMENT YEAR: 2014-2015 INCOME TAX OFFICER,................................ ........................................APPELLANT WARD-13(1), KOLKATA, 110, SHANTI PALLY, AAHAYAR BHAWAN (POORVA), KOLKATA-700 107 -VS.- M/S. ASHAMANGAL PORTFOLIO PVT. LIMITED,............ .......................RESPONDENT 103/24/1, FORESHORE ROAD, SHIBPUR, HOWRAH-711 102 [PAN: AABCA 3340 B] APPEARANCES BY: SHRI SANKAR HALDAR, JCIT, SR. D.R. , FOR THE APPELLANT SHRI R.K JAIN, FCA, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : JANUARY 10, 2019 DATE OF PRONOUNCING THE ORDER : FEBRUARY 28, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ):- THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-5, KOLKATA DAT ED 30.11.2017 AND THE SOLITARY GROUND RAISED BY THE REVENUE THEREIN R EADS AS UNDER:- WHETHER ON THE BASIS OF FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A), KOLKATA ERRED IN DI RECTING THE AO TO TREAT THE INCOME OF THE ASSESSEE FROM WAREHOUSING STRUCTURE AS INCOME FROM BUSINESS U/S 2 8 OF THE I.T. ACT, 1961 AND NOT INCOME FROM HOUSE PROPER TY U/S 22 AS TREATED BY THE AO IN THE ASSESSMENT PROCEEDIN GS. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH DERIVES RENTAL INCOME IN THE FORM OF SUBLETTING WAREHOUSE CHARGES. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 29.11.2014 DECLARING A LOSS OF RS.12,46,302/-. IN THE SAID RETURN, THE REN TAL INCOME RECEIVED IN ITA NO. 132/KOL/2018 ASSESSMENT YEAR: 2014-2015 M/S. ASHAMANGAL PORTFOLIO PVT. LIMITED 2 THE FORM OF WAREHOUSING CHARGES, ETC. WAS DECLARED BY THE ASSESSEE- COMPANY AS ITS BUSINESS INCOME AND AFTER CLAIMING D EDUCTION FOR THE VARIOUS EXPENSES, NET INCOME WAS DISCLOSED BY THE A SSESSEE. KEEPING IN VIEW THE STAND CONSISTENTLY TAKEN IN THE ASSESSMENT S COMPLETED IN THE CASE OF THE ASSESSEE OF THE EARLIER YEARS ON THE SI MILAR ISSUE, THE ASSESSING OFFICER BROUGHT TO TAX THE RENTAL INCOME RECEIVED BY THE ASSESSEE IN ITS HAND UNDER THE HEAD INCOME FROM HO USE PROPERTY AND AFTER ALLOWING DEDUCTIONS UNDER SECTIONS 24(A) AND 24(B), THE ASSESSMENT WAS COMPLETED BY HIM UNDER SECTION 143(3) VIDE AN O RDER DATED 30.12.2016 DETERMINING THE TOTAL INCOME OF THE ASSE SSEE AT RS.1,82,87,751/-. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(APPEALS), WHO FOLLOWED THE DECISION OF THE TRIB UNAL RENDERED IN ASSESSEES OWN CASE FOR THE EARLIER YEARS, I.E. A.Y S 2000-01 TO 2005-06 AND DIRECTED THE ASSESSING OFFICER TO TREAT THE REN TAL INCOME RECEIVED BY THE ASSESSEE IN THE FORM OF WAREHOUSING CHARGES, ET C. AS ITS BUSINESS INCOME AS SHOWN IN THE RETURN OF INCOME. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE REVENUE HAS PREFERRED THIS AP PEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS AGREED BY THE LD. REPRESENTATIVES OF BOTH THE SIDES, THE SOLITARY ISS UE INVOLVED IN THIS APPEAL OF THE REVENUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL I N ASSESSEES OWN CASE FOR A.YS. 2000-01 TO 2003-04 RENDERED VIDE ITS ORDE R DATED 04.04.2008 IN ITA NOS. 2005 & 6901/MUM/2005, 4571 & 4572/MUM/2006 . A COPY OF THE SAID ORDER IS PLACED ON RECORD BEFORE US AND PE RUSAL OF THE SAME SHOWS THAT A SIMILAR ISSUE WAS DECIDED BY THE TRIBU NAL IN FAVOUR OF THE ASSESSEE VIDE PARAGRAPH NO. 6 OF ITS ORDER, WHICH R EADS AS UNDER:- ITA NO. 132/KOL/2018 ASSESSMENT YEAR: 2014-2015 M/S. ASHAMANGAL PORTFOLIO PVT. LIMITED 3 6. ON CAREFUL ANALYSIS OF THE UNDISPUTED FACTS NAR RATED SUPRA IN THE LIGHT OF THE VARIOUS JUDICIAL PRONOUNC EMENTS THAT WERE RELIED ON BY THE ASSESSEE IN SUPPORT OF ITS CL AIMS. IT IS FOUND THAT THE ASSESSEE IS NEITHER THE OWNER NOR TH E LESSOR OF THE PROPERTY THAT WAS EXPLOITED BY THE ASSESSEE BY CARRYING ON BUSINESS AFTER REPAIRS AND MAINTENANCE, GIVING O N LEASE TO OTHERS AND BY PROVIDING ELECTRICITY CONNECTIONS, SE CURITY ETC. AND DERIVES INCOME THEREFROM. THE PROVISION CONTAIN ED IN SECTION 22 OF THE I.T. ACT CLEARLY MENTIONS THAT TH E ANNUAL VALUE OF PROPERTY CONSISTING OF ANY BUILDINGS OR LA NDS APPURTENANT THERETO OF WHICH THE ASSESSEE IS THE OW NER, OTHER THAN SUCH PORTIONS OF SUCH PROPERTY AS HE MAY OCCUP Y FOR THE PURPOSES OF ANY BUSINESS OR PROFESSION CARRIED ON B Y HIM THE PROFITS OF WHICH ARE CHARGEABLE TO INCOME TAX SHALL BE CHARGEABLE TO INCOME TAX UNDER THE HEAD INCOME FRO M HOUSE PROPERTY. IN CLEAR TERMS THE PROVISION SAYS THAT T HE PROPERTY MUST BE OWNED BY THE ASSESSEE IN ORDER TO CHARGE TH E INCOME DERIVED FROM IT OR ITS PORTION OTHER THAN THAT PORT ION USED FOR CARRYING ON BUSINESS ACTIVITIES AS INCOME FROM HOUS E PROPERTY. IN THE PRESENT CASE ON HAND, BY GOING THR OUGH ALL THE DOCUMENTS AND MATERIAL MADE AVAILABLE BY THE AS SESSEE BEFORE THE DEPARTMENTAL AUTHORITIES AND MENTIONED I N THE ORDERS PASSED BY THME NOWHERE IT WAS POINTED OUT TH AT HOW THE ASSESSEE BECAME THE PROPER OWNER OR LESSEE THER EOF. ON THE OTHER HAND, THE ASSESSEE HAS PRODUCED BEFORE TH E DEPARTMENTAL AUTHORITIES COPIES OF THE PROCEEDINGS UNDERWENT BETWEEN KPT AND M/S. BINANI METALS LIMITE D WHICH CATEGORICALLY DISCLOSES THAT THE LEASE PERIOD WITH KPT AND M/S. BINANI METALS LIMITED HAS EXPIRED LONG AGO AND THE ASSESSEE WAS NOT RECOGNIZED BY THE KPT AS EVEN OCCU PIER OF THE PROPERTY IN QUESTION AND THERE ARE NO DOCUMENTS OF ANY TYPE TO SHOW THAT THE ASSESSEE HAS ACQUIRED ANY RIG HT IN THE PROPERTY IN QUESTION FROM THE TRUE OWNER OF THE PRO PERTY I.E. KPT. EVEN THE ATTEMPTS MADE BY THE ASSESSEE TO ACCE PT THE OWNERSHIP OF THE KPT IN ITS TURN AND ITS RECOGNITIO N OF THE KPT AS TENANT OF THE PROPERTY IN QUESTION, WAS NOT ACCEPTED BY THE KPT FOR MANY REASONS INCLUDING THAT OF MANDA TORY REQUIREMENT OF SANCTION OF APPROVAL BY THE GOVT. OF INDIA AND IN VIEW OF THE PENDING EVICTION PROCEEDINGS OF THE ORIGINAL TENANT M/S. BINANI METALS LTD. WHOSE LEASE HAS ALRE ADY EXPIRED. THE ONLY BASE THAT CAN BE MADE IS THE BILL S CHARGED BY M/S. BINANI METALS LTD. TO THE ASSESSEE TOWARDS THE PROPERTY IN OCCUPATION UNDER VARIOUS HEADS BUT NOWH ERE IN THESE DOCUMENTS IT WAS MENTIONED THAT THE ASESSEE H AS BEEN RECOGNIZED AS THE SUB-LESSEE OF KPT. THEREFORE, RES PECTFULLY FOLLOWING THE DECISIONS RENDERED BY THE VARIOUS JUD ICIAL FORUMS THAT WERE RELIED ON BY THE ASSESSEE SUCH AS BY THE HONBLE SUPREME COURT IN THE CASE OF R.B. JODHAMAL KUTHALIA ITA NO. 132/KOL/2018 ASSESSMENT YEAR: 2014-2015 M/S. ASHAMANGAL PORTFOLIO PVT. LIMITED 4 VS. CIT 82 ITR 570, WHEREIN IT WAS HELD THAT THE O WNER MUST BE THE PERSON, WHO CAN EXERCISE, THE RIGHTS OF OWNE R NOT ON BEHALF OF THE OWNERS BUT IN HIS OWN RIGHT. THIS TR IBUNALS BOMBAY BENCH AS WELL AS HYDERABAD BENCH REPORTED IN 110 ITD 331 AND 337 AND 99 ITD 18 IS OF THE SAME VIEW T O THE EFFECT THAT IF THE ASSESSEE IS NOT THE OWNER OF TH E BUILDING, INCOME FROM LETTING OUT THE SAME, WITH AMENITIES WO ULD HAVE TO BE ASSESSABLE EITHER UNDER HEAD BUSINESS OR I NCOME FROM OTHER SOURCES DEPENDING ON THE FACT AS TO WHETHER RENTING OUT OF THE BUILDING OR LAND WAS APPURTENANT THERETO WAS DONE IN THE COURSE OF BUSINESS OR NOT. IN THE LIGHT OF THE RATIO LAID DOWN BY THE JUDICIAL FORUMS, WE ARE OF THE CONSIDER ED VIEW THAT THE ASSESSEE IS NOT THE OWNER OF THE PROPERTY IN QUESTION AND NOT HAVING ANY RIGHT OVER IT AND IS NOTHING BUT THE BUSINESS INCOME BUT NEVER BE THE INCOME FROM HOUSE PROPERTY. THIS ISSUE RAISED BY THE ASSESSEE IS ACCE PTED BY DIRECTING THE DEPARTMENTAL AUTHORITIES TO TREAT THE SAME ACCORDINGLY 5. IT IS ALSO OBSERVED THAT THE ABOVE DECISION REND ERED FOR A.YS. 2000- 01 TO 2003-04 HAS BEEN SUBSEQUENTLY FOLLOWED BY THE TRIBUNAL TO DECIDE THE SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE FOR A.Y S. 2004-05 AND 2005-06 VIDE ITS ORDER DATED 19.12.2013 PASSED IN ITA NOS. 1978-1979/KOL/2010, FOR A.Y. 2010-11 VIDE ITS ORDER DATED 05.12.2017 PA SSED IN ITA NO. 1083/KOL/2016, FOR A.Y. 2012-13 VIDE ITS ORDER DATE D 10.10.2018 PASSED IN ITA NO. 2559/KOL/2017 AND FOR A.Y. 2013-14 VIDE ITS ORDER DATED 14.09.2018 PASSED IN ITA NO. 2371/KOL/2017. AS THE ISSUE INVOLVED IN THE YEAR UNDER CONSIDERATION AS WELL AS ALL THE MAT ERIAL FACTS RELEVANT THERETO ARE SIMILAR TO THAT OF A.YS. 2000-01 TO 200 3-04, 2004-05 TO 2005- 06, 2010-11, 2012-13 & 2013-14, WE RESPECTFULLY FOL LOW THE DECISION OF THE TRIBUNAL RENDERED FOR THE SAID YEARS AND UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) GIVING RELIEF TO THE ASSESS EE ON THE ISSUE UNDER CONSIDERATION. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON FEBRUARY 28, 2019. SD/- SD/- (A.T. VARKEY) (P.M. JAGTAP) JUDICIAL MEMBER VICE -PRESIDENT (KZ) KOLKATA, THE 28 TH DAY OF FEBRUARY, 2019 ITA NO. 132/KOL/2018 ASSESSMENT YEAR: 2014-2015 M/S. ASHAMANGAL PORTFOLIO PVT. LIMITED 5 COPIES TO : (1) INCOME TAX OFFICER, WARD-13(1), KOLKATA, 110, SHANTI PALLY, AAHAYAR BHAWAN (POORVA), KOLKATA-700 107 (2) M/S. ASHAMANGAL PORTFOLIO PVT. LIMITED, 103/24/1, FORESHORE ROAD, SHIBPUR, HOWRAH-711 102 (3) COMMISSIONER OF INCOME TAX (APPEALS)-5, KOLKAT A, (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.