Chennai Properties and Investments Limited, CHENNAI V. ACIT, CHENNAI

ITA 1937/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95971 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-07-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 14-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHAL
• Assessee Lawyers: R VIJAYARAGHAVAN
• Section: 234B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1937/MDS/2014 ( )( / ASSESSMENT YEAR : 2002-03 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 VI(3), CHENNAI - 600 034. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SH. R. VIJAYARAGHAVAN, ADVOCATE -.+, / 0 / RESPONDENT BY : DR. B. NISCHAL, JCIT 1 / 2% / DATE OF HEARING : 09.07.2015 3') / 2% / DATE OF PRONOUNCEMENT : 28.08.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)(C)-II, CHE NNAI, DATED 24.03.2014 AND PERTAINS TO ASSESSMENT YEAR 2002-03. 2 I.T.A. NO.1937/MDS/14 2. SH. R. VIJAYARAGHAVAN, THE LD.COUNSEL FOR THE AS SESSEE, SUBMITTED THAT THE FIRST ISSUE ARISES FOR CONSIDERA TION IS WITH REGARD TO ASSESSMENT OF RENTAL INCOME. ACCORDING TO THE L D. COUNSEL, THE ASSESSEE CLAIMED THE SAME AS INCOME FROM BUSINESS. HOWEVER, THE ASSESSING OFFICER TREATED THE RENTAL INCOME AS INCOME FROM HOUSE PROPERTY. ON APPEAL BY THE ASSESSEE, THE CIT (APPEALS) CONFIRMED THE CLASSIFICATION MADE BY THE ASSESSING OFFICER AS INCOME FROM HOUSE PROPERTY BY FOLLOWING THE JUDGMEN T OF MADRAS HIGH COURT IN ASSESSEE'S OWN CASE FOR THE ASSESSMEN T YEAR 1986- 87. THE APEX COURT IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEARS 1990-91 TO 1993-94 EXAMINED THE ISSUE IN RESP ECT OF THE VERY SAME PROPERTY AND REVERSED THE JUDGMENT OF THE HIGH COURT BY RULING THAT LETTING OUT THE PROPERTY BY THE ASSESSE E IS THE BUSINESS OF THE ASSESSEE. THEREFORE, THE ASSESSEE HAS RIGHTLY DISCLOSED THE INCOME UNDER THE HEAD INCOME FROM BUSINESS. THE SUBJECT MATTER OF THE APPEAL BEFORE THE APEX COURT IS IN RESPECT O F THE PROPERTIES KNOWN AS CHENNAI HOUSE AND FIRHAVIN ESTATE. TH E VERY SAME PROPERTIES WERE SUBJECT MATTER OF ASSESSMENT FOR TH E YEAR UNDER CONSIDERATION ALSO. THEREFORE, ACCORDING TO THE LD . COUNSEL, THE JUDGMENT OF THE APEX COURT IS SQUARELY APPLICABLE T O THE FACTS OF THE CASE, HENCE, INCOME ON LETTING OUT THE PROPERTY HAS TO BE ASSESSED ONLY AS INCOME FROM BUSINESS. 3 I.T.A. NO.1937/MDS/14 3. ON THE CONTRARY, DR. B. NISCHAL, THE LD. DEPARTM ENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE HAS LET OUT THE PROPERTY TO INDIAN OVERSEAS BANK, MMTC AND STATE TR ADING CORPORATION AS A NORMAL OWNER OF THE PROPERTY. ACC ORDING TO THE LD. D.R., WHEN THE ASSESSEE LET OUT THE PROPERTY AS A N ORMAL 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. ADMITTEDL Y, THE ASSESSEE LET OUT TWO PROPERTIES, NAMELY, CHENNAI HOUSE AND F IRHAVIN ESTATE. THE APEX COURT IN CIVIL APPEAL NO.4494 OF 2004 EXAM INED THE LETTING OUT OF THE VERY SAME PROPERTY IN ASSESSEE'S OWN CASE AND FOUND THAT LETTING OUT OF THE PROPERTY IS IN FACT T HE BUSINESS OF THE ASSESSEE. THEREFORE, THE ASSESSEE HAS RIGHTLY DISC LOSED THE INCOME AS INCOME FROM BUSINESS. THE APEX COURT F URTHER FOUND THAT THE INCOME CANNOT BE TREATED AS INCOME FROM HO USE PROPERTY. ACCORDINGLY, THE APEX COURT SET ASIDE THE JUDGMENT OF THE MADRAS HIGH COURT AND RESTORED THAT OF THE INCOME TAX APPE LLATE TRIBUNAL. BY RESPECTFULLY FOLLOWING THE JUDGMENT OF THE APEX COURT IN ASSESSEE'S OWN CASE, THIS TRIBUNAL IS OF THE CONSID ERED OPINION THAT 4 I.T.A. NO.1937/MDS/14 THE INCOME FROM LETTING OUT OF THE PROPERTY HAS TO BE ASSESSED ONLY AS INCOME FROM BUSINESS AND NOT AS INCOME FROM HOUS E PROPERTY. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES AR E SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO ASSESS THE RENTAL INCOME UNDER THE HEAD INCOME FROM BUSINESS. 5. THE NEXT GROUND OF APPEAL IS WITH REGARD TO GIVI NG CREDIT FOR THE TAX DEDUCTED AT SOURCE TO THE EXTENT ` 7,11,914/-. 6. SH. R. VIJAYARAGHAVAN, THE LD.COUNSEL FOR THE AS SESSEE, SUBMITTED THAT THE TAX WAS DEDUCTED AT SOURCE TO TH E EXTENT OF ` 7,11,914/-. HOWEVER, THE ASSESSING OFFICER REFUSED TO GIVE CREDIT OF THE TAX DEDUCTED AT SOURCE AND LEVIED INTEREST U NDER SECTIONS 234A AND 234B OF THE ACT. ACCORDING TO THE LD. COU NSEL, ONCE TAX WAS DEDUCTED, THE SAME HAS TO BE GIVEN CREDIT. 7. ON THE CONTRARY, DR. B. NISCHAL, THE LD. DEPARTM ENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE HAS NOT PRODUCED ANY DETAILS WITH REGARD TO DEDUCTION OF TAX AT SOURCE. IN THE ABSENCE OF THE REQUIRED DETAILS, THE CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. IN THE AB SENCE OF THE 5 I.T.A. NO.1937/MDS/14 DETAILS, THE CIT(APPEALS) CONFIRMED THE ORDER OF TH E ASSESSING OFFICER. HOWEVER, THE CIT(APPEALS) OBSERVED THAT T HE ASSESSEE IS AT LIBERTY TO PRODUCE BEFORE THE A.O. ANY MATERIAL EVIDENCE WITH REGARD TO DEDUCTION OF TAX AND SEEK REMEDIAL ACTION . THEREFORE, THE ASSESSEE IS AT LIBERTY TO FURNISH THE COPIES OF THE TDS CERTIFICATE ISSUED BY THE DEDUCTOR BEFORE THE ASSESSING OFFICER . IF THE ASSESSEE FILES COPY OF THE TDS CERTIFICATE, THEN TH E A.O. SHALL CONSIDER THE SAME AND GIVE CREDIT IN ACCORDANCE WIT H LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. W ITH THE ABOVE OBSERVATION, THE MATTER IS REMITTED BACK TO T HE FILE OF THE ASSESSING OFFICER. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON 28 TH AUGUST, 2015 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 28 TH AUGUST, 2015. KRI. 6 I.T.A. NO.1937/MDS/14 / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)(C)-II, CHENNAI 4. 1 92 /CIT, CHENNAI-1, CHENNAI 5. 7: -2 /DR 6. ;( < /GF.