JANKAR MECHANICAL WORKS, MUMBAI V. ITO 15(2)(3), MUMBAI

ITA 1441/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8837 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 05-01-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 10-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANU KRISHNA AGGARWALDR
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUM BAI , BEFORE SHRI RAJENDRA, A.M. AND SHRI PAWAN SINGH,J.M . ./ITA NO.1441/MUM/2015, / ASSESSMENT YEAR: 2011-12 JANKAR MECHANICAL WORKS 203, JAGRUTI APARTMENT SAINATH ROAD, MALAD (W) MUMBAI-400 064. PAN: AAEFJ 8456 F VS. INCOME TAX OFFICER-15(2)(3) 121, MATRU MANDIR, TARDEO MUMBAI-400 007. ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: MS. ANU KRISHNA AGGARWAL-DR ASSESSEE BY: NONE / DATE OF HEARING: 05.01.2017 !'#$ / DATE OF PRONOUNCEMENT: 25.01.2017 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) , / PER RAJENDRA A.M. - CHALLENGING THE ORDER DATED 14/11/2014,OF THE CIT ( A)-26,MUMBAI THE ASSESSEE HAS FILED THE PRESENT APPEAL.ASSESSEE-FIRM,FILED ITS RETURN OF IN COME ON 29/09/2011.THE ASSESSING OFFICER (AO)COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT, ON 28/02/2014,DETERMINING ITS INCOME AT RS.74.87 LAKHS. 2. EFFECTIVE GROUND OF APPEAL IS ABOUT TREATING THE BU SINESS INCOME,AMOUNTING TO RS.1.06 CRORES UNDER THE HEAD HOUSE PROPERTY INCOME. DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUND THAT THE ASSESSEE HAD SHOWN AN AMOUNT OF RS.1 .06 CRORES AS INCOME FROM SERVICES RENDERED TO TWO PARTIES NAMELY,TRANSWEIGH(I) LTD.(R S. 20.16 LAKHS) AND PAM GLATT PHARMA TECHNOLOGIES PRIVATE LTD.(RS.86.79 LAKHS),THAT THE INCOME WAS SHOWN UNDER THE HEAD BUSINESS INCOME,THAT THE ASSESSEE HAD CLAIMED THAT IT WAS INTO THE BUSINESS OF OPERATING ITS PREMISES AND EARNING CONDUCTING FEES,THAT IT FURTHE R CLAIMED THAT PREMISES WERE GIVEN WITH VARIOUS OTHER SERVICES TO DIFFERENT ENTITIES FOR CO NSIDERATION AND THAT PREMISES WERE GIVEN TOGETHER WITH VARIOUS INSTALLATION AND EMBEDDED SER VICES, THAT THE ASSESSEE CLAIMED THAT INCOME EARNED BY IT WAS ASSESSABLE AS BUSINESS INCO ME.HOWEVER,THE AO WAS NOT SATISFIED 1441/M/15 JANKAR MECHANICAL WORKS (11-12) 2 WITH THE TREATMENT GIVEN BY THE ASSESSEE TO THE INC OME RECEIVED FROM THE ABOVE-MENTIONED TWO PARTIES. HE REFERRED TO THE AGREEMENT ENTERED I NTO BETWEEN IT AND PAM GLATT PHARMA TECHNOLOGIES PRIVATE LTD. AND ASSESSED THE INCOME U NDER THE HEAD HOUSE PROPERTY. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREF ERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA). BEFORE HIM, IT WAS ARGUE D THAT THE PREMISES WAS GIVEN WITH EMBEDDED SERVICES SUCH AS WORKSHOP, SECURITY, HELPE RS, THAT IT HAD ENTERED INTO A BUSINESS CONDUCTING AGREEMENT ON 21/03/2004,THAT THE SAID AG REEMENT WAS FURNISHED DURING THE ASSESSMENT PROCEEDINGS, THAT THE CONDUCTING AGREEME NT WAS NOT CONSIDERED BY THE AO,THAT AS PER THE PARTNERSHIP DEED THE ASSESSEE WAS ALSO IN T HE BUSINESS OF LEASING OUT THE PROPERTIES, THAT IT WAS AGREED BETWEEN THE PARTIES THAT THE ASS ESSEE WOULD RENDER VARIOUS SERVICES TO FACILITATE THE BUSINESS OF CONDUCTOR,THAT THE SERVI CES PROVIDED BY IT WERE COMPLEX IN NATURE. THE ASSESSEE RELIED UPON CERTAIN CASE LAWS AND STAT ED THAT THE TRIBUNAL HAD RESTORED BACK THE SIMILAR ISSUE TO THE FILE OF THE AO,WHILE DECIDING THE APPEAL, FILED BY IT,FOR THE AY.2008-09. 4. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AN D THE ORDER OF THE AO, THE FAA HELD THAT THE LIST OF THE MACHINERY STATED TO BE INSTALLED IN THE PREMISES, AS APPEARING IN THE AGREEMENT, WERE NOT SIGNED BY THE LESSEE, THAT IT WAS NOT EVID ENT THAT MACHINERY WAS FORMING AN INTEGRAL PART OF THE PREMISES GIVEN ONLY, THAT IT COULD NOT BE HELD THAT MACHINERY WAS GIVEN TO THE LESSEE AND THAT THE CONSIDERATION WAS RECEIVED FOR THE LEASE OF THE MACHINERY, THAT THE SERVICES AGREED TO BE PROVIDED BY THE ASSESSEE WERE NORMAL S ECURITY AND UPKEEP SERVICES WHICH COULD NOT ALTER THE CHARACTER OF THE AGREEMENT AND TAXABI LITY OF INCOME FROM HOUSE PROPERTY TO BUSINESS INCOME,THAT IT WAS A SIMPLE CASE OF HIRING OUT THE PROPERTY BY THE ASSESSEE,THAT THE INCOME FROM THE SAME WAS ASSESSABLE AS HOUSE PROPER TY INCOME.FINALLY,HE UPHELD THE ORDER OF THE AO. 1441/M/15 JANKAR MECHANICAL WORKS (11-12) 3 5. AS STATED EARLIER NONE APPEARED BEFORE US, ON BEHAL F OF THE ASSESSEE. THE DEPARTMENTAL REPRESENTATIVE.SUPPORTED THE ORDER OF THE FAA. 6. WE FIND THAT ASSESSEE HAD OFFERED THE INCOME RECEIV ED FROM TWO PARTIES UNDER THE HEAD BUSINESS INCOME, THAT THE AO AND THE FAA HAD TAXED THE RENTAL INCOME UNDER THE HEAD HOUSE PROPERTY INCOME, THAT NOTHING HAS BEEN BROUGHT ON R ECORD TO PROVE THAT IT WAS NOT A SIMPLE CASE OF HIRING.THEREFORE, WE DONOT WANT TO INTERFER E WITH THE ORDER OF THE FAA.UPHOLDING HIS ORDER WE DECIDE THE EFFECTIVE GROUND OF APPEAL AGAI NST THE ASSESSEE. AS A RESULT, APPEAL FILED BY THE ASSESSEE STANDS DI SMISSED. . ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JANUARY, 2017. 25 , 2017 SD/- SD/- ( /PAWAN SINGH) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 25.01.2017. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.