Dy.CIT,Cir.3,Pune, Pune V. M/s. B.B.Associates, Pune

ITA 165/PUN/2012

• Counselvise Citation: 16524514 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 30-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y K BHASKAR
• Assessee Lawyers: C H NANIVADEKAR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.165/PN/2012 (ASSESSMENT YEAR : 2004-05) DY. COMMISSIONER OF INCOME TAX CIRCLE 3, PUNE . APPELLANT VS. M/S B. B. ASSOCIATES 242/1, NEELGIRI, BHANDAKAR INSTITUTE ROAD PUNE 411 004 PAN : AACFB5231C . RESPONDENT APPELLANT BY : MR. Y. K. BHASKAR RESPONDENT BY : MR. C. H. NANIVADEKAR DATE OF HEARING : 14-05-2013 DATE OF PRONOUNCEMENT : 16-05-2013 ORDER PER G. S. PANNU, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE DATED 28.10.2011 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 31.12.2010 PAS SED BY THE ASSESSING OFFICER, UNDER SECTION 143(3) OF THE INCOME-TAX ACT , 1961(IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2004-05. 2. IN THIS APPEAL, ALTHOUGH THE REVENUE HAS RAISED MULTIPLE GROUNDS OF APPEAL BUT THE SOLITARY GRIEVANCE OF THE REVENUE IS WITH REGARD TO THE ACTION OF THE CIT(A) IN HOLDING THAT THE INCOME DERIVED BY THE ASSESSEE FROM THE LETTING OUT OF PREMISES IS LIABLE TO BE ASSESSED AS INCOME FROM HOUSE PROPERTY AND NOT AS INCOME FROM BUSINESS, AS HELD BY THE ASSESSING OFFICER. ITA NO.165/PN/2012 M/S B. B. ASSOCIATES A.Y. 2004-05 3. IN BRIEF, THE FACTS ARE THAT THE RESPONDENT IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF PROMOTERS AND BUILDERS. THE ASSESSEE FIRM DEVELOPED 3 RESIDENTIAL AND 1 COMMERCIAL BUILD ING AND THE INCOME DERIVED FROM THE SALE OF RESIDENTIAL BUILDIN GS WAS OFFERED UNDER THE HEAD PROFIT AND GAINS OF BUSINESS OR PRO FESSION. FURTHER, WITH THE INTENTION OF EARNING CONTINUOUS STREAM OF INCOME, THE FIRM DECIDED TO RETAIN AND LET OUT THE COMMERCIAL BUILDI NG FOR THE PURPOSE OF EARNING RENTAL INCOME. THE INCOME EARNED IN THE FORM OF LEASE RENTALS FROM THE COMMERCIAL BUILDING WAS OFFERED TO TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE ASSESSING OF FICER HOWEVER TOOK A VIEW THAT THE RENTAL INCOME FROM COMMERCIAL BUILDING WAS TO BE TREATED AS INCOME FROM BUSINESS. IN COMING TO TH IS CONCLUSION, THE ASSESSING OFFICER REFERRED TO THE STAND OF HIS PREDECESSOR IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2003-04 . THE CIT(A) HAS SINCE UPHELD THE STAND OF THE ASSESSEE BY NOTIC ING THAT SIMILAR STAND OF THE ASSESSING OFFICER IN THE ASSESSEES OW N CASE FOR THE ASSESSMENT YEAR 2005-06 WAS A SUBJECT MATTER OF CON SIDERATION BY THE TRIBUNAL VIDE ITA NO. 1073/PN/2009 DATED 31.01. 2011. THE TRIBUNAL IN ITS ORDER DATED 31.01.2011 (SUPRA) FOLL OWING ITS EARLIER DECISION DATED 03.10.2008 IN THE ASSESSEES OWN CAS E FOR THE ASSESSMENT YEAR 2003-04 UPHELD THE PLEA OF THE ASSE SSEE OF TREATING THE RENTAL INCOME AS ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. AGAINST THE AFORESAID DECISIO N OF THE CIT(A), REVENUE IS IN APPEAL BEFORE US. 4. BEFORE US, IT WAS A COMMON POINT BETWEEN THE PAR TIES THAT THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE RE LIED UPON BY THE CIT(A) CONTINUES TO HOLD THE FIELD AND HAVE NOT BEE N ALTERED BY ANY HIGHER AUTHORITY. AS A RESULT, NO FAULT CAN BE FOUN D WITH THE ACTION OF THE CIT(A) IN FOLLOWING THE PRECEDENT IN THE ASSESS EES OWN CASE, IN ORDER TO HOLD THAT THE RENTAL INCOME IS LIABLE TO B E ASSESSED UNDER ITA NO.165/PN/2012 M/S B. B. ASSOCIATES A.Y. 2004-05 THE HEAD INCOME FROM HOUSE PROPERTY AND NOT AS BU SINESS INCOME AS CONTENDED BY THE ASSESSING OFFICER. THE AFORESAI D ACTION OF THE CIT(A) IS HEREBY AFFIRMED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH MAY, 2013. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 16-05-2013 SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, PUNE; 4) THE CIT-II, PUNE; 5) THE DR, B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// PRIVATE SECRETARY I.T.A.T., PUNE