Chennai Properties & Investments Ltd., CHENNAI V. ACIT, CHENNAI

ITA 1781/CHNY/2015

• Counselvise Citation: 178121714 RSA 2015
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 04-08-2015
• Court: TRIBUNAL
• Department Lawyers: A B KOLIJCITD R
• Assessee Lawyers: R DHIRAJ

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ ITA NO.1781/MDS/2015 / ASSESSMENT YEAR : 2011-12 M/S. CHENNAI PROPERTIES AND INVESTMENTS LTD., MENA KAMPALA ARCADE, 3 RD FLOOR, A BLOCK, B-WING, 114, SIR THEYAGARAYA ROAD, T.NAGAR, CHENNAI - 600 017. PAN : AAACC 3726 G V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE I(3), CHENNAI - 600 034. (/ APPELLANT) ( !/ RESPONDENT) ' # / APPELLANT BY : SH. R.DHIRAJ, ADVOCATE !'# / RESPONDENT BY : SH. A.B.KOLI, JCIT D.R $ '%& / DATE OF HEARING : 29.09.2015 '( '%& / DATE OF PRONOUNCEMENT : 09.10.2015 ' / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED B Y THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-I, CHENNAI DA TED 23.02.2015 IN ITA NO.549/13-14/A-I (NEW NO.ITA117/CIT(A)-1/2013-1 4 PASSED UNDER SEC.143(3) READ WITH SECTION SEC. 250 OF THE ACT. 2 I.T.A. NO.1781/MDS/15 2. THE ASSESSEE HAS RAISED THREE ELABORATE GROUNDS IN ITS APPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE LD. CIT (A), WHO HAD UPHELD THE ORDER OF THE LD. ASSESSING OFFICER IN ASSESSING THE RENTAL INCOME UNDER THE HE AD INCOME FROM HOUSE PROPERTY INSTEAD UNDER THE HEAD INCOME FROM BUSIN ESS OR PROFESSION AS CLAIMED BY THE ASSESSEE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A COMPANY, ENGAGED IN THE BUSINESS OF PROPERTY DEVELOPMENT & L ETTING OUT FOR BUSINESS PREMISES, FILED ITS RETURN OF INCOME FOR T HE ASSESSMENT YEAR 2011-12 ON 29.09.2011 ADMITTING NIL INCOME. SUBSE QUENTLY THE CASE WAS TAKEN UP FOR SCRUTINY UNDER CASS AND ORDER WAS PASS ED U/S.143(3) OF THE ACT ON 27.09.2013 WHEREIN THE LD. ASSESSING OFFICER HAD ASSESSED THE RENTAL INCOME UNDER THE HEAD INCOME FROM HOUSE PRO PERTY, THEREBY DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT ` 1,07,16,484/- FOLLOWING THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT O F MADRAS IN THE ASSESSEES OWN CASE REPORTED IN 136 TAXMAN 202(MAD. )(2004). ON APPEAL, THE LD. CIT (A) ENDORSED THE VIEW OF THE LD . ASSESSING OFFICER WITH THE FOLLOWING OBSERVATIONS:- 4.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AND SUBMISSION OF THE LD.A.R IT IS OBSERVED THAT ON SIMILAR ISSUE, THE HONOURABLE H IGH COURT OF MADRAS, IN THE APPELLANTS OWN CASE REPORTED IN 136 TAXMAN 202(MAD .)(2004) FOR THE A.YS 1979-80, 3 I.T.A. NO.1781/MDS/15 1983-84 AND 1984-85 HAS DECIDED THE ISSUE AGAINST T HE APPELLANT BY CONCLUDING AS UNDER 22. ON THE FACTS OF THE CASE, IT IS CLEAR THAT THE ASSESSEE, AS OWNER OF THE BUILDING, WAS ONLY EXPLOITING THE PROPERTY AS OWNER BY THE LEASING OUT THE SAME AND REALIZING INCOME BYWAY OF RENT. SUCH INCOME WAS ASS ESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE JU RISDICTIONAL HIGH COURT, THE GROUND IS DISMISSED. 4. AT THE OUTSET, LD. A.R. RELIED ON THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEE'S OWN CASE IN IT A NO.1937/MDS./2014 VIDE ORDER DATED 28.08.2015 AND PRAYED THAT THE ORD ER OF THE LD. CIT(A) MAY BE SET ASIDE. LD. D.R COULD NOT CONTROVERT THE SUBMISSIONS OF THE LD. A.R. 5. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PE RUSED THE MATERIALS AVAILABLE ON RECORD AND THE DECISION OF THE TRIBUNA L IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2002-03. THE RELEVANT PORTION OF THE TRIBUNALS ORDER CITED BY THE LD.A.R IS REPRODUCED HEREIN BELOW FOR REFERENCE:- 2. .. ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS) CONF IRMED THE CLASSIFICATION MADE BY THE ASSESSING OFFICER AS INCOME FROM HOUSE PROPERTY BY FOLLOWING THE JUDGMENT OF MADRAS HIGH COURT IN ASSESSEE'S OWN CAS E FOR THE ASSESSMENT YEAR 1986-87. THE APEX COURT IN ASSESSEE'S OWN CASE FOR THE ASSES SMENT YEARS 1990-91 TO 1993-94 EXAMINED THE ISSUE IN RESPECT OF THE VERY SAME PROPERTY AND REVERSED THE JUDGMENT OF THE HIGH COURT BY RULI NG THAT LETTING OUT THE PROPERTY BY THE ASSESSEE IS THE BUSINESS OF THE ASS ESSEE. THEREFORE, THE ASSESSEE HAS RIGHTLY DISCLOSED THE INCOME UNDER THE HEAD INCOME FROM BUSINESS . THE SUBJECT MATTER OF THE APPEAL BEFORE THE APE X COURT IS IN RESPECT 4 I.T.A. NO.1781/MDS/15 OF THE PROPERTIES KNOWN AS CHENNAI HOUSE AND FIR HAVIN ESTATE. THE VERY SAME PROPERTIES WERE SUBJECT MATTER OF ASSESSMENT F OR THE YEAR UNDER CONSIDERATION ALSO. THEREFORE, ACCORDING TO THE LD . COUNSEL, THE JUDGMENT OF THE APEX COURT IS SQUARELY APPLICABLE TO THE FACTS OF T HE CASE, HENCE, INCOME ON LETTING OUT THE PROPERTY HAS TO BE ASSESSED ONLY AS INCOME FROM BUSINESS. 3. ON THE CONTRARY, DR. B. NISCHAL, THE LD. DEPARTM ENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE HAS LET OUT THE PROPERT Y TO INDIAN OVERSEAS BANK, MMTC AND STATE TRADING CORPORATION AS A NORMAL OWNE R OF THE PROPERTY. ACCORDING TO THE LD. D.R., WHEN THE ASSESSEE LET OU T THE PROPERTY AS A NORMAL OWNER, THE INCOME THEREFROM HAS TO BE ASSESSED ONLY AS INCOME FROM HOUSE PROPERTY. THEREFORE, ACCORDING TO THE LD. D.R., TH E CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ADDITION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. ADMITTEDLY, THE ASSES SEE LET OUT TWO PROPERTIES, NAMELY, CHENNAI HOUSE AND FIRHAVIN ESTATE. THE APE X COURT IN CIVIL APPEAL NO.4494 OF 2004 EXAMINED THE LETTING OUT OF THE VER Y SAME PROPERTY IN ASSESSEE'S OWN CASE AND FOUND THAT LETTING OUT OF THE PROPERTY IS IN FACT THE BUSINESS OF THE ASSESSEE. THEREFORE, THE ASSESSEE HAS RIGHTLY DISC LOSED THE INCOME AS INCOME FROM BUSINESS. THE APEX COURT FURTHER FOUND THAT THE INCOME CANNOT BE TREATED AS INCOME FROM HOUSE PROPERTY. ACCORDINGLY, THE AP EX COURT SET ASIDE THE JUDGMENT OF THE MADRAS HIGH COURT AND RESTORED THAT OF THE INCOME TAX APPELLATE TRIBUNAL. BY RESPECTFULLY FOLLOWING THE JUDGMENT O F THE APEX COURT IN ASSESSEE'S OWN CASE, THIS TRIBUNAL IS OF THE CONSIDERED OPINIO N THAT THE INCOME FROM LETTING OUT OF THE PROPERTY HAS TO BE ASSESSED ONLY AS INCO ME FROM BUSINESS AND NOT AS INCOME FROM HOUSE PROPERTY. ACCORDINGLY, THE ORDER S OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO ASSESS THE RENTAL INCOME UNDER THE HEAD INCOME FROM BUSINESS. IT IS APPARENT FROM THE ABOVE THAT THE CHENNAI BENC H OF THE TRIBUNAL ON THE EARLIER OCCASION FOR THE ASSESSMENT YEAR 2002-0 3 HAS HELD THE ISSUE IN 5 I.T.A. NO.1781/MDS/15 FAVOUR OF THE ASSESSEE BY TREATING THE RENTAL INCOM E OF THE ASSESSEE UNDER THE HEAD INCOME FROM BUSINESS FOLLOWING THE DECIS ION OF THE HONBLE APEX COURT IN THE ASSESSEES OWN CASE FOR THE ASSES SMENT YEARS 1990-91 TO 1993-94. THEREFORE ON THE IDENTICAL ISSUE IN TH E ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2002-03 ALSO WE HEREBY HOLD THAT THE RENTAL INCOME OF THE ASSESSEE DERIVED BY EXPLOITING THE PR OPERTIES OF THE ASSESSEE HAS TO BE ASSESSED UNDER THE HEAD INCOME FROM BUSINESS. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON 9 TH OCTOBER, 2015 AT CHENNAI. SD/- SD/- ( . ) ( DUVVURU RL REDDY ) ( . ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 9 TH OCTOBER, 2015 . K S SUNDARAM. )* ' %+, -,% /COPY TO: 1. /APPELLANT 2. ! /RESPONDENT 3. $ .% () /CIT(A) 4. $ .% /CIT 5. ,01 % /DR 6. 12 3 /GF