DCIT, New Delhi V. M/s. Anjala Exhibitors Pvt. Ltd., New Delhi

ITA 1676/DEL/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5409 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 24-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH A: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A. NO.1676/DEL/2015 (AY 2011-12) ACIT CIRCLE-2(2) VS. ANJALA EXHIBITORS PVT. LT D. ROOM NO. 392, G-80, C.R.BUILDING, LAJPAT NAGAR-I, I.P. ESTATE, NEW DELHI NEW DELHI (PAN AAACA0219J) (APPELLANT) (RESPONDENT) O R D E R PER H.S. SIDHU, JM THE REVENUE HAS FILED THIS APPEAL AGAINST THE IMPUG NED ORDER DATED 14.01.2015 PASSED BY THE LD. CIT(A)-I, NEW DELHI ON THE FOLLOWING GROUNDS:- 1. WHETHER THE LD. CIT(A) HAS ERRED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE IN TREATING THE RENT RECE IVED BY THE ASSESSEE AMOUNTING TO RS. 1,27,75,350/-, AS INCOME FROM HOUSE PROPERTY INSTEAD OF INCOME FROM OTHER SOURC ES. 2. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIG HT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEA L AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A OWNER OF A LEASEHOLD PROPERTY SITUATED AT NARIANA INDUSTRIAL AREA, NEW D ELHI WHICH WAS BEING RUN BY APPELLANT BY SH. RAVI KANT GUPTA, SR. DR RESPONDENT BY SH. RANJAN CHOPRA, FCA 2 THE ASSESSEE COMPANY BY THE NAME OF PAYAL CINEMA TI LL THE YEAR 2000. SUBSEQUENTLY, ON 18.5.2000, THE ASSESSEE COMPANY EN TERED INTO ORATION AND MANAGEMENT WITH MS PRIYA VILLAGE ROADSHOW LTD. (PVR ) FOR REFURBISHMENT, DEVELOPMENT, MANAGEMENT AND OPERATION OF THE CINEMA . THE ASSESSEE COMPANY HAD SHOWN RENTAL INCOME OF RS. 1,27,75,350- AS ITS SHARE FROM THE ABOVE CINEMA AND RS. 44,93,880/- FROM THE STATE BANK OF BIKANER AND JAIPUR. THE AO WAS OF THE VIEW THAT THE INCOME FROM PAYAL CINEMA IS INCO ME FROM OTHER SOURCES AND NOT THE INCOME FROM HOUSE PROPERTY. ACCORDINGLY, TH E AO DISALLOWED THE 30% OF STATUTORY DEDUCTION AMOUNTING TO RS. 38,32,605/-. 3. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT( A) BY WAY OF FILING THE APPEAL WHO HAS DELETED THE ADDITION BY ALLOWING THE APPEAL OF THE ASSESSEE. FEELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIB UNAL BY WAY OF FILING PRESENT APPEAL. 4. LD. A.R. OF THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT LD. CIT(A) HAS FOLLOWED THE ORDER OF TH E TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2007-08 IN ITA NO. 16 2/DEL/2012 VIDE ORDER DATED 31.5.2013. HE FURTHER STATED THAT ITAT VIDE I TS ORDER DATED 28.2.2018 PASSED IN ITA NO. 4229DEL/2016 (AY 2012-13) AND ITA NO. 1492/DEL/2012 (AY 2008-09) VIDE ORDER DATED 23.3.2017 IN ASSESSEES O WN CASE HAS DISMISSED THE APPEAL OF THE REVENUE ON SIMILAR AND IDENTICAL ISSU ES. IN THIS BEHALF, HE FILED THE COPIES THEREOF. 5. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER OF THE AO. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE ORDE RS OF THE REVENUE AUTHORITIES AS WELL AS ORDERS OF THE TRIBUNAL AND D OCUMENT BROUGHT ON RECORD. WE FIND THAT LD. CIT(A) HAS ALLOWED THE APPEAL IN T HE ASSESSMENT YEAR UNDER CONSIDERATION BY HOLDING AS UNDER:- 5.3 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. AR AND PERUSED THE ORDER PASSED BY THE AO. I FIND T HAT HONBLE ITAT, DELHI A BENCH VIDE THEIR ORDER DAT ED 31.5.2013 IN ITA NO. 162/DELHI/2012 FOR AY 2007-08 HAVE HELD THAT THE RECEIPT FROM PVR LTD. SHOULD BE TREATED AS INCOME FROM HOUSE PROPERTY AND ALL 3 CONSEQUENTIAL BENEFITS AND DEDUCTIONS SHOULD BE ALLOWED TO THE ASSESSEE. I FIND THAT THE APPEAL OF THE ASSESSEE FOR THE AY 2008-09 WAS ALLOWED VIDE MY APPELLATE ORDER DATED 31.12.2012, FOR AY 2009-10 VIDE MY APPELLATE ORDER DATED 01.01.2013 AND FOR AY 2010-11 VIDE MY APPELLATE ORDER DATED 14.08.2014 HOLDING THAT INCOME RECEIVED FROM M/S PVR LTD. WAS IN THE NATURE OF RENTAL INCOME AND SAME REQUIRES TO BE TAXED AS INCOME FROM HOUSE PROPERTY. 5.3.1 I FIND THAT THERE IS NO CHANGE IN THE FACTS A ND CIRCUMSTANCES OF THE CASE DURING THIS YEAR AS COMPARED TO AY 2007-08, 2008-09, 2009-10 & 2010- 11 AS PROPERTY IN QUESTION IS THE SAME I.E. PAYAL CINEMA. IN VIEW OF THE ABOVE FACTS OF THE CASE, THE AO IS DIRECTED TO TREAT THE RECEIPT FROM PVR LTD. AND STATE BANK OF BIKANER & JAIPUR AS INCOME FROM HOUSE PROPERTY. THE ADDITION OF RS. 38,32,605/- IS DIRE CTED TO BE DELETED. THIS GROUND OF APPEAL IS ALLOWED. 6.1 WE FURTHER FIND THAT CO-ORDINATE BENCH OF TRIBU NAL IN ASSESSEES OWN CASE FOR AY 2012-13 HAS HELD AS UNDER:- 7. COORDINATE BENCH OF TRIBUNAL IN ASSESSEES WON C ASE FOR AY 2007-08 DELETING THE ADDITION BY THE LD. CIT (A) MADE BY AO BY TREATING THE RECEIPT FROM PVR AS INCOME FROM OTHER SOURCES RATHER ORDERED TO TREAT T HE RECEIPT AS RECEIPT AS INCOME FROM HOUSE PROPERTY BY MAKING FOLLOWING OBSERVATION:- 15. RESPECTFULLY FOLLOWING THE JUDGMENT OF HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF PAREKH TRADERS VS. CIT (POONA), (SUPRA) WE HOLD THAT INCOME DERIVED AS RENT FROM PROPERTY MUST BE COMPUTED UNDER THAT SPECIFIC HEAD REGARDLESS OF THE FACT THAT PROPERTY HAD AT ONE POINT OF TIME 4 BEEN UTILIZED BY THE ASSESSEE FOR BUSINESS PURPOSES. SUCH PROPERTY CANNOT BE TREATED AS A BUSINESS ASSET AND RENT THEREOF AS INCOME FROM BUSINESS. IN VIEW OF ABOVE, WE FURTHER OBSERVE THAT A DISTINCTION MUST BE DRAWN BETWEEN THE LETTING OUT OF LAND OR HOUSE PROPERTY ON THE ONE HAND AND OF PLANT AND MACHINERY ON THE OTHER HAND. THE HON'BLE BOMBAY HIGH COURT HAS CLEARLY HELD THAT PLANT AND MACHINERY ARE COMMERCIAL ASSETS AND THEIR EXPLOITATION EVEN BY MEANS OF LETTING OUT, YIELDS OR BRING INCOME FROM BUSINESS AND PER CONTRA, INCOME EARNED FROM LETTING OUT THE BUILDING IS INCOME FROM PROPERTY. IN THE CASE IN HAND THE PVR LTD. TAKEN OVER ONLY CINEMA BUILDINGS ON RENT AND REMAINS FURNITURE, FIXTURES AND OTHER EQUIPMENTS HAVE BEEN RETURNED BY THE PVR LTD. TO THE ASSESSEE, ACCORDINGLY FIXED RENTAL EARNED THEREFROM DESERVES TO BE TREATED AS RENTAL INCOME FROM HOUSE PROPERTY. RESULTANTLY, GROUND NO.2 OF THE ASSESSEE IS ALLOWED WITH A DIRECTION TO THE AO THAT THE RECEIPTS FROM PVR LTD. BY THE ASSESSEE BE TREATED AS INCOME FROM HOUSE PROPERTY AND ALL CONSEQUENTIAL BENEFITS AND DEDUCTIONS BE ALLOWED TO THE ASSESSEE IN THIS REGARD. 8. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE AND THE FACT THAT THERE IS NO CHANGE IN THE FACTS OF TH IS CASE AND FOLLOWING DECISION RENDERED BY THE COORDIN ATE BENCH OF TRIBUNAL IN ASSESSEES OWN CASE BY TAKING CONSISTENT VIEW THAT THE INCOME DERIVED BY THE 5 ASSESSEE FROM PVR LTD. HAS BEEN RIGHTLY ORDERED TO BE TREATED AS INCOME FROM HOUSE PROPERTY. HENCE, FINDI NG ILLEGALITY OR PERVERSITY IN THE IMPUGNED ORDER PASS ED BY LD. CIT(A) THE PRESENT APPEAL FILED BY THE REVEN UE IS DISMISSED. 6.2 KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AS EXPLAINED ABOVE AND RESPECTFULLY FOLLOWING THE DECISION OF TH E COORDINATE BENCH, AS AFORESAID, IN ASSESSES OWN CASE, WE ARE OF THE CON SIDERED VIEW THAT INCOME DERIVED BY THE ASSESSEE FROM PVR LTD. HAS BEEN RIG HTLY ORDERED TO BE TREATED AS INCOME FROM HOUSE PROPERTY. HENCE, WE FIND NO ILLEG ALITY OR PERVERSITY IN THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) AND THEREFO RE, WE UPHOLD THE SAME BY DISMISSING THE APPEAL FILED BY THE REVENUE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED ON 26-04-2018. SD/- SD/- [L.P. SAHU] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 26/04/2018 SR BHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. D R, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES 6