ACIT, Circle-17(1), New Delhi V. Modi Industries Ltd, New Delhi

ITA 1879/DEL/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3436 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2014-2015
• Appeal Filed On: 16-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ATIQ AHMED SENIOR
• Assessee Lawyers: ROBIFYAIN ADV SH ARP IT GOYAL
• Keywords: Business income; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI O.P.KANT, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.1879/DEL./2018 ASSESSMENT YEAR : 2014-15 ACIT, VS. M/ S. MODI INDUSTRIES LTD. CIRCLE-17(1) MOD I NAGAR, U.P NEW DELHI NEW DELHI (PAN : AAACM2063Q) (APPLICANT) (RESPONDENT) REVENUE BY : SHRI ATIQ AHMED, SENIOR DR ASSESSEE BY : SHRI ROBIFYAIN ADV. SH. ARP IT GOYAL, CA DATE OF HEARING : 15.04.2021 DATE OF ORDER : 11.06.2021 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, ASSTT. COMMISSIONER OF INCOME TAX, NEW DELHI (HEREINAFTER REFERRED TO AS THE REVENUE) BY FILI NG THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 22.12.2017 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)- 22, NEW DELHI QUA THE ASSESSMENT YEARS 2014-15 ON THE GROUN DS INTER ALIA THAT : 1. WHETHER IN FACTS AND ON CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) IS LEGALLY JUSTIFIED IN HOLDING THAT THE INCOME FROM LETTING OUT OF SOME OF BUSINESS ASSETS OF THE ASSESSEE ITA NO.1879/DEL./2018 2 COMPANY WAS IN NATURE OF INCOME FROM HOUSE PROPERT Y BY IGNORING THE RATIO DECIDENDI OF HONBLE SUPREME COU RT IN CASE OF UNIVERSAL PLAST LIMITED VS. CIT(1999) 237 I TR 454? 2. WHETHER IN FACTS AND ON CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) IS LEGALLY JUSTIFIED IN ALLOWING RELIEF TO T HE ASSESSEE ON THE BASIS OF ITS EARLIER ORDERS IN THE ASSESSEES O WN CASE BY IGNORING DECISION OF HONBLE APEX COURT IN CASE OF UNIVERSAL PLAST LIMITED VS. CIT (SUPRA) AND DESPITE THE FACT THAT PRINCIPLE OF RES-JUDICATA IS NOT APPLICABLE TO INCO ME TAX PROCEEDINGS AS EACH ASSESSMENT YEAR IS A SEPARATE Y EAR? 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, A LTER OR FORGO ANY GROUND (S) OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDI CATION OF THE CONTROVERSY AT HAND ARE : ASSESSEE IS A MULTI UNIT MANUFACTURING COMPANY. AO NOTICED THAT THE ASSESSEE HAS GROSS INC OME UNDER THE HEAD INCOME FROM HOUSE PROPERTY AT RS. 1,72,39,5 09/- BEING THE RENT RECEIVED FROM LAND GIVEN ON RENT TO VARIOU S PERSONS, OUTSIDERS AND SISTER CONCERNS. DECLINING THE CONT ENTION RAISED BY THE ASSESSEE THAT THIS INCOME IS INCOME FROM HOUSE PROPERTY, AO PROCEEDED TO TREAT THE SAME AS BUSINESS INCOME AS THE SAID PREMISES RENTED OUT BY THE ASSESSEE FROM PART OF F IXED ASSETS IN THE ASESSEES BALANCE SHEET ON WHICH INCIDENTAL EXPENSE S HAS BEEN CLAIMED AND ALLOWED BY THE REVENUE, AND AS SUCH TAX ED THE SAME AS BUSINESS INCOME. ITA NO.1879/DEL./2018 3 3. ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) BY WA Y OF FILING THE APPEAL WHO HAS DELETED THE ADDITION BY P ARTLY ACCEPTING APPEAL. FEELING AGGRIEVED THE REVENUE HAS COME UP B EFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. UNDISPUTEDLY ASSESSEE HAS EARNED TOTAL RENTAL IN COME AT RS. 1,95,47,009/-, OUT OF WHICH ASSESSEE ITSELF HAS TR EATED AN AMOUNT OF RS. 23,07,500/- AS BUSINESS INCOME AGAINST WHICH EXPENSES HAVE ALREADY BEEN CLAIMED BY THE ASSESSEE. IT IS AL SO NOT IN DISPUTE THAT IN THE EARLIER ASSESSMENT YEAR FOR A.Y. 2011-1 2 ASSESSEES CLAIM TO TREAT THE RENTAL INCOME FROM ITS STEEL UNI T INCLUDING THAT FROM BUILDINGS AND QUARTERS HAVE BEEN ACCEPTED BY T HE CO-ORDINATE BENCH OF TRIBUNAL IN ITA NO. 1702/DEL./2015, ITA N O. 2640/DEL/ 2015 , VIDE ORDER DATED 20.11.2015 IN ASSESSEES OW N CASE. 6. WE HAVE PERUSED THE ORDER PASSED BY CO-ORDINATE BENCH OF TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2011-12 WH EREIN PROPOSITION MOOTED OUT BY THE ASSESSEE THAT THE REN TAL INCOME FROM LETTING OUT STEEL UNITS AND QUARTER SITUATED IN THE STEEL UNITS IS TO BE ITA NO.1879/DEL./2018 4 TREATED AS INCOME FROM HOUSE PROPERTY HAS BEEN AC CEPTED BY RETURNING THE FOLLOWING FINDINGS :- IT IS SUBMITTED THAT THERE IS NO ERROR IN THE ORD ER OF THE CIT(A) HOLDING THAT RENTAL INCOME OF THE STEEL UNIT IS ASSESSABLE AS INCOME FROM HOUSE PROPERTY, AS DECL ARED BY THE ASSESSEE. WHILE DOING SO, HE HAS FOLLOWED THE F IRST APPELLATE ORDER IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2010-11. HE REPRODUCED THE RELEVANT PORTION OF THE SAID FIRST APPELLATE ORDER WHEREIN IT HAS BEEN MENTIONED THAT IN THE EARLIER ASSESSMENT YEARS 2007-08, 2009-10 AND 2 010-11 UNDER SIMILAR FACTS, IT HAS BEEN HELD THAT INCOME D ERIVED FROM LETTING OUT OF BUILDING AND QUARTERS IN RESPECT OF STEEL UNIT IS ASSESSABLE TO TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THUS, IN VIEW OF THE PRINCIPLES OF CONSI STENCY, THE LEARNED CIT(APPEALS) WAS JUSTIFIED IN ALLOWING THE CLAIMED INCOME FROM HOUSE PROPERTY. THE SAME IS UPHELD. THE GROUND IS ACCORDINGLY REJECTED. 7. LD. DR FOR THE REVENUE HAS FAILED TO BRING ON RE CORD ANY CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE T O TREAT THE INCOME BY WAY OF RENTAL INCOME EARNED BY THE ASSESS EE FROM LETTING OUT OF STEEL UNITS AND QUARTERS SITUATED TH EREIN TO BE TREATED AS BUSINESS INCOME. WHEN THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE, AND THIS RENTAL INCOME H AS BEEN ACCEPTED AS INCOME FROM THE HOUSE PROPERTY IN EARLI ER ASSESSMENT YEARS FOR 2007-08, 2009-10, 2010-11 AND 2011-12, TH ERE IS NO GROUND TO DEPART FROM THE PRINCIPLES OF CONSISTENC Y. SO FINDING ITA NO.1879/DEL./2018 5 NO ILLEGALITY OR PERVERSITY IN THE IMPUGNED ORDER P ASSED BY LD. CIT(A), THE APPEAL FILED BY THE REVENUE IS HEREBY D ISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 11 TH DAY OF JUNE, 2021. SD/- SD/- (O.P.KANT) (KULDIP SINGH ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 11 TH DAY OF JUNE, 2021 BINITA COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.