M/s. Govind Builders, V. ITO, Dhule

ITA 1413/PUN/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3180 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 07-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJU AJWANI
• Assessee Lawyers: NILESH KHANDELWAL
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI I.C. SUDHIR AND SHRI D. KARUNAKARA RAO ITA NO. 1413/PN/08 (ASSTT. YEAR 2005-06) M/S. GOVIND BUILDERS, DESAIPURA, NANDURBAR PAN NO. AAGFG6234L .... APPELLANT VS. ITO, WARD 3(4), DHULE . RESPONDENT APPELLANT BY : SHRI NILESH KHANDELWAL RESPONDENT BY : SMT. MANJU AJWANI ORDER PER D. KARUNAKARA RAO, AM THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E CIT(A)-I, NASHIK DATED 05/09/2008 FOR THE A.Y 2005-06. 2. AT THE VERY OUTSET, LD. COUNSEL FOR THE ASSESSEE F ILED AN ADDITIONAL GROUND WHICH IS CONSEQUENTIAL IN NATURE TO THE LIKELY DECIS ION OF OURS, IF THE APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE, WHICH IS MOST LI KELY IF THE JURISDICTIONAL HIGH COURT JUDGMENT IN THE CASE OF MANGALA HOMES (P) LTD. VS. ITO & ORS. (2009) 182 TAXMAN 55 (BOM) IS APPLIED TO THE FACTS OF THE CASE. 3. REGARDING THE FACTS, LD. COUNSEL MENTIONED THAT A SSESSEE REFLECTED THE WIP FOR THE YEAR UNDER CONSIDERATION AT RS.38,62,777/- AND REFLECTED THE INCOME ON ACCOUNT OF RENT AND INTEREST AMOUNTING TO RS. 2,46,83 3/-, OF THESE INCOME, THE TAXABILITY OF THE RENTAL INCOME EARNED ON ACCOUNT OF THE FLATS WHICH IS HELD AS A STOCK-IN-TRADE OF THE ASSESSEE. IN THIS REGARD, LD. COUNSEL MENTIONED THAT RENTAL INCOME RECEIVED FROM FLAT / GODOWN / SHOP HAS TO BE T AXED UNDER HEAD INCOME FROM HOUSE PROPERTY , WHETHER IT IS A STOCK-IN-TRADE OR OTHERWISE. THIS ISS UE IS RAISED IN ITA NO. 1413/PN/08 A.Y 2005-06 PAGE 2 OF 2 GROUND NO. 3 OF THE ASSESSEES APPEAL. OTHERWISE, ASS ESSEE DID NOT PRESS GROUND NO. 1,2, & 4 OF THE APPEAL. IN THIS REGARD, LD DR RELIED O N THE ORDERS OF THE REVENUE. 4. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE RAISED IN GROUND NO. 3. IN THIS REGARD, WE PERUSED THE CITED JURISDICTIONAL HIGH COURT J UDGEMENT IN THE CASE OF MANGALA HOMES (P) LTD. VS. ITO & ORS (SUPRA). THE CON CLUSION OF THE SAID JUDGEMENT READS AS FOLLOWS:- ASSESSEE ADMITTEDLY BEING OWNER OF THE FLATS HELD A S STOCK-IN-TRADE, RENTAL INCOME FROM LICENSING THE SAID FLATS IS ASSESSABLE AS INCOME FROM HOUSE PROPERTY AND NOT AS BUSINESS INCOME . AS HELD IN PARA 4 OF THE IMPUGNED ORDER, THE CHARACTER OF INCOME IS NOT ALTERED BECAUSE THE FLAT WHICH IS THE STOCK-IN-TRADE IS TEMP ORARILY LEASED OUT. CONSIDERING ABOVE SETTLED NATURE OF THE ISSUE IN THIS REGARD, WE ARE OF THE OPINION GROUND NO. 3 SHOULD BE ALLOWED IN FAVOUR OF THE ASSESSEE. FURTHER GROUND NO. 1, 2 AND 4 ARE DISMISSED AS NOT PRESSED. 5. REGARDING THE ADDITIONAL GROUND RAISED BY THE ASSES SEE, WE FIND THE SAME IS CONSEQUENTIAL IN NATURE WHICH DESERVES TO BE ADMITTED . FURTHER, CONSIDERING OUR DECISION WITH REGARD TO GROUND NO. 3 OF THE ASSESSEES APPEAL, WE ARE OF THE OPINION THAT ASSESSEES ADDITIONAL GROUNDS SHOULD ALSO BE DE CIDED IN HIS FAVOUR AND THE WIP ACCOUNT HAS TO BE RECOMPUTED DETERMINING THE SAME AT RS. 38,62,777/-. ACCORDINGLY, ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ALLOWED . 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH NOVEMBER, 2010. SD/- SD/- (I.C. SUDHIR) (D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE DATED THE 12 TH NOVEMBER, 2010 R COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. ITO, WARD 3(4), DHULE 3. CIT(A)-I, NASHIK 4. CIT-I, NASHIK 5. D.R. ITAT B BENCH BY ORDER ASSISTANT REGISTRAR I.T.A.T PUNE