Assistant Commissioner of Income Tax, Bangalore V. M/s.Prestige Garden Constructions Pvt. Ltd., Bangalore

ITA 1849/BANG/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5681 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 13-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 28-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B K PANDA
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, B E NGAL U R U BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI LALIT KUMAR, JUDICIAL MEMBER ITA NO. 1849 / BANG/ 201 6 (ASSESSMENT YEAR : 201 1 - 12 ) ASST. COMMISSIONER OF INCOME - TAX, CIRCLE 5(1)( 2), BENGALURU. VS. APPELLANT M/S.PRESTIGE GARDEN CONSTRUCTIONS PVT. LTD. NO.1, THE FALCON HOUSE, MAIN GUARD CROSS ROAD, OFF INFANTRY ROAD, BENGALURU - 560 001. PAN: AABCP 2091E RESPONDENT APPELLANT BY : SHRI B.K.PANDA, CIT(DR). RE SPONDENT BY : SHRI SUDHEENDRA, CA. DATE OF HEARING : 07/11/2017 DATE OF PRONOUNCEMENT : 17 /01/2018 O R D E R PER I NTURI RAMA RAO, AM : THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) - 12, [ CIT(A)], BANGALORE, DATED 29/08/2016 FOR THE ASSESSMENT YEAR 2011 - 12. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS OF APPEAL: ITA NO . 1849 /BANG/201 6 PAGE 2 OF 4 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY DULY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT 1956. IT IS ENGAGED IN THE BUSINESS OF OPERATION AND MAINTENANCE OF FORUM VALUE MALL SITUATED IN WHITEFIELD , BANGALORE. THE RETURN OF INCOME FOR ASSESSMENT YEAR 2011 - 12 WAS FILED ON 29/09 / 2011 DECLARING LOSS OF RS14,16,55,766/ - . AGAINST THE RETURN OF INCOME, ASSESSMENT WAS COMPLETED BY THE DY.CIT, CIRCLE 12(2), BANGALORE VIDE ORDER DATED 28/03/2014 AT LOSS OF RS.54,37,097/ - . WHILE DOING SO, THE ASSESSING OFFICER ASSESSED RENTAL INCOME FROM THE MALL UNDER THE HEAD INCOME FROM HOUSE PROP ERTY AFTER PLACING RELIANCE ON THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF 263 ITR143 AND THE JURISDICTIONAL OF HIGH COURT DECISION IN THE CASE OF CIT VS. BHOOPALAN COMMERCIAL COMPLEX ( 262 ITR 517 ) . 4. BEING AGGRIEVED, AN APPEAL WAS PREF ERRED BEFORE THE LD.CIT(A), WHO VIDE IMPUGNED ORDER , HELD THAT HAVING REGARD TO THE OBJECTS OF THE COMPANY, RENTAL INCOME SHOULD BE ASSESSED UNDER THE HEAD INCOME FROM BUSINESS . ITA NO . 1849 /BANG/201 6 PAGE 3 OF 4 5. BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US 6. THE LEA RNED DR CONTENDED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN TREATING RENTAL INCOME DERIVED FROM THE MALL AS BUSINESS INCOME IN THE LIGHT OF THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF SHAMBHU INVESTMENTS (263 ITR 143) AND JURISDICTIONAL HIGH CO URT IN THE CASE OF BHOOPALAM COMMERCIAL COMPLEX (SUPRA). ON THE OTHER HAND, THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE COMPANY BY THE ORDER OF THIS TRIBUNAL IN THE ASSESSEE S OWN CASE FOR EARLIER YEARS IN ITA NO. 806/BANG/2015 FOR THE ASSESSMENT YEAR 2010 - 11 AND ALSO THE DECISION OF THE JURISDICTION HIGH COURT IN THE CASE OF CIT VS PRESTIGE ESTATE PRIVATE LIMITED (ITA NO.119/ 2014 DATED 03/06/3014 AND CIT VS. M/S.TOYOTA TECHNO PARK INDIA (P) LTD., IN I TA NO.73/2014 . 7. WE HEARD RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD . THE ONLY ISSUE IN THE PRESENT APPEAL IS WHETHER RENTAL INCOME DERIVED FROM THE MALL OWNED AND OPERATED BY THE ASSESSEE CAN BE ASSESSED UNDER THE HEAD INCOME FROM BUSINESS OR INCOME FROM HOUSE PROPERTY . THIS ISSUE REQUIRES ADJUDICATION HAVING REGARD TO THE OBJECTS OF THE COMPANY FOR WHICH COMPANY WAS INCORPORATED . THE LD.CIT(A), AFTER EXTRACTING THE OBJECTS OF THE COMPANY HAD COME TO THE CONCLUSION THAT THE INTENTION OF THE ASSESSEE - COMPANY IS TO EXPLOIT COMMERCIAL PROPERTY FOR PROFITS AND THEREFORE HAD COME TO THE CONCLUSION THAT THE RENTAL INCOME SHOULD BE ASSESSED UNDER THE HEAD INCOME FROM BUSINESS . THE APPROACH AND THE RATIONALE OF THE DECISION OF LD.CIT(A) HA D B EEN APPROVED BY THE HON BLE APEX COURT IN THE CASE OF CHENNAI PROPERTIES & INVESTMENTS LTD. VS. CIT (373 ITR 673) AND ALSO THE ITA NO . 1849 /BANG/201 6 PAGE 4 OF 4 DECISION OF THE JURISDICTION HIGH COURT IN THE CASE OF CIT VS. VELANKANI INFORMATION SYSTEMS (P) LTD. (218 TAXMAN 88)(KAR). THE REFORE, WE DO NOT FIND FALLACY IN THE REASONING ADOPTED BY THE LD.CIT(A). HENCE, GROUNDS OF APPEAL FILED BY THE REVENUE ARE DISMISSED. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JANUARY, 2018. SD/ - SD/ - ( LALI T KUMAR ) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE : B EN GAL URU D A T E : 17 /0 1/2018 SRINIVASULU, SPS COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME - TAX APPELLATE TRIBUNAL BANGALORE