ACIT, CHENNAI V. Vira Properties (Madras) Pvt Limited, CHENNAI

ITA 1423/CHNY/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4616 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2013
• Appeal Filed By: Department
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 26-06-2013
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 1423/MDS/2013 ASSESSMENT YEAR 2007-08 ASST. COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-III(4), CHENNAI 600 034. VS M/S. VIRA PROPERTIES (MADRAS) PVT. LIMITED, NEW NO. 158, OLD NO. 781, ANNA SALAI, CHENNAI -600 002. [PAN: AABCV 5241 Q] (APPELLANT) (RESPONDENT) REVENUE BY : SHRI S. DAS GUPTA, JCIT ASSESSEE BY : SHRI SAROJKUMAR PARIDA, ADVOCATE DATE OF HEARING : 04-09-2013 DATE OF PRONOUNCEMENT : 11-09-2013 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-III, CHE NNAI, DATED 06-03-2013 RELEVANT TO THE ASSESSMENT YEAR (AY) 200 7-08. THE I.T.A. NO. 1423/MDS/2013 :- 2 -: ONLY ISSUE RAISED IN APPEAL BY THE REVENUE IS WHETH ER THE RENTAL INCOME AND MAINTENANCE RECEIPTS RECEIVED BY THE ASS ESSEE ARE TO BE ASSESSED UNDER THE HEAD PROFITS AND GAINS FR OM BUSINESS OR INCOME FROM HOUSE PROPERTY. 2. THE ASSESSEE IS IN THE BUSINESS OF CONSTRUCTION AND DEVELOPMENT OF COMMERCIAL PROPERTY. THE ASSESSEE F ILED ITS RETURN OF INCOME FOR THE AY. 2007-08 ON 05-11-2007 CLAIMING THE RENTAL RECEIPTS AS INCOME FROM BUSINESS. THE RET URN OF THE ASSESSEE WAS PROCESSED U/S. 143(1) OF THE INCOME TA X ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) ON 06-02-20 09. SUBSEQUENTLY, NOTICE U/S. 148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 13-07-2011. THE REASONS FOR RE-OPENING THE ASSESSMENT ARE AS UNDER: ON PERUSAL OF RECORDS IT WAS NOTICED THAT THE RENT AL RECEIPTS AS PER THE TDS CERTIFICATES IS ` 36,64,398/- WHEREAS AN AMOUNT OF ` 27,22,887/- IS ONLY DISCLOSED IN THE PROFIT AND LOS S ACCOUNT. THUS THERE IS A SUPPRESSION OF RECEIPTS T O THE EXTENT OF ` 9,41,511/- WHICH HAS ESCAPED TAX. I.T.A. NO. 1423/MDS/2013 :- 3 -: WHILE PASSING THE ASSESSMENT ORDER DATED 25-11-2011 U/S. 143(3) R.W.S. 147 OF THE ACT, THE ASSESSING OFFICER APART FROM MAKING THE ADDITION AS AFORESAID, TREATED THE RENTA L INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY INSTEAD OF I NCOME FROM BUSINESS. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSESSE E PREFERRED AN APPEAL BEFORE THE CIT(APPEALS). THE C IT(APPEALS) FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES O WN CASE FOR THE AY. 2002-03 PASSED IN ITA NO. 2592/MDS/05 DATED 20- 03-2008, ALLOWED THE APPEAL OF THE ASSESSEE AND DIRECTED THE ASSESSING OFFICER TO ASSESS THE RENTAL INCOME AND MAINTENANCE RECEIPTS UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PR OFESSION AND ALLOW THE EXPENDITURE IN ACCORDANCE WITH LAW. AGGRIEVED AGAINST THE ORDER OF THE CIT(APPEALS), TH E REVENUE HAS COME IN APPEAL BEFORE US. 3. SHRI SAROJKUMAR PARIDA, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE AT THE OUTSET SUBMITTED THAT THE ISSUE IN PRESENT I.T.A. NO. 1423/MDS/2013 :- 4 -: APPEAL HAD CROPPED UP IN EARLIER AYS. (I.E., 2002-0 3, 2003-04 & 2004-05) ALSO AND IN ALL THE SAID AYS, THE TRIBUNAL HAS HELD THE INCOME FROM RENT IS TO BE TREATED AS INCOME FROM B USINESS OR PROFESSION. THE LD. AR PLACED ON RECORD COPY OF T HE ORDER OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ITA NO. 2592/M DS/05 RELEVANT TO THE AY. 2002-03 DATED 20-03-2008 AND IT A NOS. 895 & 896/MDS/2010 RELEVANT TO THE AYS. 2003-04 & 2004- 05 DECIDED ON 23 RD AUGUST, 2010. 4. SHRI S. DAS GUPTA, REPRESENTING THE DEPARTMENT FAIRLY CONCEDED THAT THE ISSUE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE IN THE AFOREMENTIONED APPEALS RELATING TO AYS. 2002-03, 2003-04 & 2004-05. HOWEVER, HE CONTENDED THAT THE REVENUE HAS FILED APPEAL AGAINST THE ORDER OF THE TRIBUNAL BEFORE THE HONBLE MADRAS HIGH COURT. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE ORDERS OF THE CO-ORDINATE BENCH IN ASSESSEES OWN CASE FOR EARLIER ASSESSMENT YEARS. I.T.A. NO. 1423/MDS/2013 :- 5 -: WE FIND THAT THE ISSUE IN HAND IS SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ITA NO. 2592/MDS/05 RELEVANT TO THE AY. 2002-03 DECIDED ON 20-03-2008. IN THE SAID APPEAL, THE TRIBUNAL HAS HELD THAT THE RENTAL INCOM E FROM THE PROPERTY HAS TO BE TREATED AS INCOME FROM BUSINESS OR PROFESSION IN THE HANDS OF THE ASSESSEE. IN THE S UBSEQUENT AYS., I.E., 2003-04 & 2004-05, SIMILAR ISSUE HAD CR OPPED UP. THE CIT(APPEALS) FOLLOWED THE DECISION OF THE TRIBUNAL IN ASSESSEES CASE IN ITA NO. 2592/MDS/05 (SUPRA) AND ALLOWED THE APPEAL OF ASSESSEE. THE REVENUE HAD APPROACHED THE TRIBUNAL IN ITA NOS. 895 & 896/MDS/2010 ASSAILING THE ORDER OF THE CIT(APPEALS). IN THE SAID APPEALS, THE TRIBUNAL HAD FOLLOWED ITS EARLIER ORDER IN ITA NO. 2592/MDS/05 (SUPRA) AND DISMISSED THE APPEA L OF THE REVENUE. 6. IN THE PRESENT CASE, THE LD. DR HAS NOT BEEN ABL E TO PLACE ON RECORD ANY ORDER CONTRARY TO THE VIEW TAKEN BY T HE CO-ORDINATE BENCH OF THE TRIBUNAL OR ANY ORDER STAYING EARLIER ORDER OF THE TRIBUNAL. THE CIT(APPEALS) HAS RE-PRODUCED THE REL EVANT EXTRACT OF THE ORDER OF THE TRIBUNAL IN ITA NO. 2592/MDS/05 (SUPRA) IN THE I.T.A. NO. 1423/MDS/2013 :- 6 -: IMPUGNED ORDER. FOR THE SAKE OF BREVITY, WE ARE NO T RE-PRODUCING THE SAME. THE APPEAL OF THE REVENUE IS DISMISSED, ACCORDINGL Y. ORDER PRONOUNCED ON WEDNESDAY, THE 11 TH SEPTEMBER, 2013 AT CHENNAI. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER (VIKAS AWAST HY) JUDICIAL MEMBER DATED: 11 TH SEPTEMBER, 2013 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR