ACIT, New Delhi V. M/s. Excel Softech Pvt. Ltd., New Delhi

ITA 1345/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2769 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 10-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAILASH CHANDRA TIWARI
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: G , NEW DELHI BEFORE SHRI N.K.SAINI , ACCOUNTANT MEMBER AND SMT. BEENA A PILLAI, JUDICIAL MEMBER ITA NO. 1345 /DEL/201 6 A.Y. 20 1 1 - 12 ACIT, CIRCLE 8(2) C.R.BLDG. IP ESTATE NEW DELHI VS . EXCEL SOFTECH P LTD. 130, TRANSPORT CENTRE PUNJABI BAGH NEW DELHI 110 035 PAN: AABCE 6651 M (APPELLANT) (RESPONDENT) APPELLANT BY SH. KAILASH CHANDRA TIWARI, SR.D.R. RESPONDENT BY SHRI VED JAIN, ADV. SH. ASISH CHADHA, ADV. SH. ASISH GOEL, ADV. DATE OF HEARING 2 6 /12/2017 DATE OF PRONOUNCEMENT 28 /12/2017 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER T HE PRESENT APPEAL HAS BEEN FILED BY REVENUE AGAINST ORDER DATED 17/12/15 PASSED BY LD. CIT (A) - 3 , DELHI FOR ASSESSMENT YEAR 2012 - 13 ON THE FOLLOWING GROUNDS OF APPEAL: ITA 1345/DEL/2016 ASSESSMENT YEAR 2012 - 13 EXCEL SOFTECH PVT.LTD . PAGE 2 OF 5 1. LD.CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DIRECTING THE AO TO ASSESS THE INCOME OF RS.1,65,94,818/ - EARNED BY THE ASSESSEE FROM WAREHOUSE, UNDER THE HEAD INCOME FROM BUSINESS INSTEAD OF INCOME FROM HOUSE PROPERTY . 2. LD.CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DIRECTING THE AO TO ALLOW THE ASSESSEE THE EXPENSES OF RS.92,09,082/ - AGAINST THE INCOME EARNED FROM WAREHOUSE. 3. LD.CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DIRECTING THE AO TO ALLOW THE INTEREST OF RS.24,69,385/ - AGAINST THE INCOME EARNED FROM WAREHOUSE. 4. THE APPELLANT CRAVES LEAVE, MODIFY, ADD OR FOREGO ANY GROUNDS OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF APPEAL. 2. BRIEF FACTS OF THE CASE ARE AS UNDER: A SSESSEE FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION DECLARING TOTAL INCOME OF RS. 59,06,180/ - ON 27/09/12. RETURN WAS PROCESSED UNDER SECTION 143 (1) OF THE A CT , AND THE CASE WAS SELECTED FOR SCRUTINY. N OTICE UNDER SECTION 1 43 (2) WAS ISSUED UPON ASSESSEE. IN RESPONSE TO STATUTORY NOTICES ISSUED, REPRESENTATIVE OF ASSESSEE APPEARED FROM TIME TO TIME AND FILED NECESSARY DETAILS. THE BOOKS OF ACCOUNTS WERE CALLED FOR AND EXAMINED ON TEST CHECK BASIS. 2.1 . LD. AO OBSERVED DURIN G THE ASSESSMENT PROCEEDINGS THAT ASSESSEE IS DERIVING RECEIPTS EARNED FROM WAREHOUSE AT VILLAGE JAMALPUR, GURGAON, HARYANA. LD. AO CALLED UPON THE ASSESSEE TO FILE DETAILS RELEVANT TO THE EARNING OF INCOME FROM WAREHOUSING. ITA 1345/DEL/2016 ASSESSMENT YEAR 2012 - 13 EXCEL SOFTECH PVT.LTD . PAGE 3 OF 5 2.2. AFTER GOING T HROUGH VARI OUS SUBMISSIONS FILED BY ASSESSEE LD. AO WAS OF THE OPINION THAT SUCH RECEIPTS HAS TO BE ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY INSTEAD OF INCOME FROM BUSINESS AND PROFESSION. THE LD. AO THUS MADE ADDITION IN THE HANDS OF ASSESSEE , TREATING INCOME RECEIVED FROM WAREHOUSING AS INCOME FROM HOUSE PROPERTY AT RS. 1,16,16,373/ - . 2.3 . AGGRIEVED BY THE ORDER OF LD.AO, ASSESSEE PREFERRED APPEAL BEFORE LD.CIT(A). LD.CIT(A) GRANTED RELIEF TO ASSESSEE BY PLACING RELIANCE UPON THE DECISION OF HON BLE SUP REME COURT IN THE CASE OF M/S CHENNAI P ROPERTIES AND I NVESTMENT LTD V S. CIT REPORTED IN (2015) 373 ITR 673. 3. AGGRIEVED BY THE ORDER OF LD. CIT (A), REVENUE IS IN APPEAL BEFORE US. 4. THE GROUNDS RAISED BY THE REVENUE DEALS WITH THE ACTION OF LD. CIT (A) IN DIRECTING THE LD. AO TO ASSESS THE INCOME EARNED FROM WAREHOUSE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 4.1 . LD. DR PLACED RELIANCE UPON THE FOLLOWING DECISIONS: RAJ DADARKAR &ASSOCIATES VS ACIT REPORTED IN (2017) TOIL - 222 - SC - IT; CIT VERSUS ANSAL HOUSING AND CONSTRUCTION REPORTED IN 389 ITR 373 (DELHI) SHAMBHU INVESTMENTS VS. CIT REPORTED IN 263 ITR 143 (SC) 4.2 . O N THE CONTRARY LD.AR PLACED RELIANCE UPON THE DECISION OF TH E HON BLE SUPREME COURT IN THE CASE OF CHENNAI PROPERTIES AND INVESTMENTS LTD VS . CIT REPORTED IN 373 ITR 673 . LD.AR SUBMITTED THAT DURING THE YEAR ASSESSEE WAS ENGAGED IN THE BUSINESS OF LETTING ITA 1345/DEL/2016 ASSESSMENT YEAR 2012 - 13 EXCEL SOFTECH PVT.LTD . PAGE 4 OF 5 OUT WAREHOUSES , WHICH HAS BEEN EXPLOITED COMMERCIALLY. HE SUBMITTED THAT THE WAREHOUSE HAS BEEN SHOWN BY ASSESSEE AS BU SINESS AS SET , AND IS NOT AN INVESTMENT WHICH IS EVIDENT FROM THE BALANCE SHEET PLACED IN THE PAPER BOOK AT PAGE 11 - 17. 5 . WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH THE SIDES IN THE LIGHT OF THE DECISIONS RELIED UPON BY THEM AND THE RECORDS PLACED BEFORE US. 5.1 . IT IS OBSERVED THAT ONE OF THE MAIN OBJECTIVE OF ASSESSEE IS WAREHOUSING AND , ASSESSEE HAS OBTAINED PERMISSION FROM THE D IRECTOR C OUNTRY AND T OWN P LANNING, HARYANA TO SET UP WAREHOUSE ON THE LAND V IDE INTIMATION DATED 24/08/09. THE LD. AR HAS POINTED OUT THAT , IN PRECEDING A ND SUBSEQUENT ASSESSMENT YEARS , REVENUE AUTHORITIES HAVE ACCE P TED WAREHOUSING INCOME AS INCOME FROM BUSINESS AND PROFESSION . A COPY OF THE ASSESSMENT ORDER PASSED UNDER SECTION 143 (3) FOR ASSESSMENT YEAR 2010 - 11 IS PLACED AT PAGE 46 OF THE PAPER BOOK AND LD.A.R. TENDERED COPY OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2014 - 15 PASSED UNDER SECTION 143(3) , WHEREIN NO ADDITION HAS BEEN MADE IN RESPECT OF THE RENT RECEIVED FROM WAREHOUSING ACTIVITY. WE ARE THEREFORE OF THE CONSIDERED OPINION THAT INTENTION OF ASSESSEE WAS TO EXPLOIT THE WARE HOUSING PROPERTY COMMERCIALLY AND THEREFORE THE RENT RECEIVED FROM WAREHOUSING ACTIVITY ASSUMES THE CHARACTER OF BUSINESS INCOME. LD.DR HAS ALSO NOT BEEN ABLE TO CONTROVERT THIS FINDING OF LD.CIT(A) . 5.2 . WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT (A) IN FOLLOWING THE RATIO IN THE CASE OF CHENNAI PROPERTIES AND INVESTMENTS ITA 1345/DEL/2016 ASSESSMENT YEAR 2012 - 13 EXCEL SOFTECH PVT.LTD . PAGE 5 OF 5 LTD VS . CIT (SUPRA). ACCORDINGLY WE DISMISS THE GROUNDS RAISED BY REVENUE. 6. IN THE RESULT APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28TH DECEMBER, 2017. SD/ - SD/ - ( N.K.SAINI ) (BEENA A PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28 TH DECEMBER , 2017. *MV COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASST. REGISTRAR ITAT, DELHI BENCHES, NEW DELHI