M/S. HERMES TRAVEL & CARGO PVT. LTD., MUMBAI V. DCIT (OSD) 1(1), MUMBAI

ITA 1994/MUM/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8415 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 13-11-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 10-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILENDRA P YADAV
• Assessee Lawyers: HARESH PURUSHOTTAM SHAH
• Keywords: Business income

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL J , BENCH MUMBAI , BEFORE : SHRI R.C.SHARMA , A M & SHRI SANJAY GARG, J M ITA NO. 1994 / MUM/20 1 1 ( ASSESSMENT YEAR : 200 7 - 08 ) M/S HERMES TRAVEL & CARGO PVT. LTD., DHIRAJ CHAMBER, 9, HAZARIMAL SOMANI MARG, FORT, MUMBAI - 400 001 VS. DCIT(OSD) - 1(1), MUMBAI PAN/GIR NO. : A AGFK 0094 A ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : SHRI HARESH PURUSHOTTAM SHAH /REVENUE BY : SHRI AKHILENDRA P. YADAV DATE OF HEARING : 13 TH NOV , 201 4 D ATE OF PRONOUNCEMENT : 21 ST NOV. 201 4 O R D E R PER R.C.SHARMA ( A .M.) : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A ) , DATED 19 - 10 - 2010 FOR THE ASSESSMENT YEAR 200 7 - 08 , IN THE MATTER OF ORDER PASSED U/S. 14 3(3) OF TH E I.T. ACT . 2 . THE ONLY GROUND TAKEN BY THE ASSESSEE RELATES TO TREATMENT OF RENTAL INCOME AS INCOME FROM BUSINESS AND PROFESSION. 3 . WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND FROM THE RECORD THAT ASSESSEE HAS OFFERED RENTAL INCOME FROM HOUSE P ROPERTY UNDER THE HEAD INCOME FROM HOUSE PROPERTY. HOWEVER, THE AO TREATED THE SAME AS INCOME FROM BUSINESS ON THE PLEA THAT ASSESSEE IN EARLIER YEAR OFFERED SUCH INCOME UNDER THE HEAD BUSINESS INCOME. THE AO WAS OF THE VIEW ITA NO. 1994 /1 1 2 THAT ASSESSEE H AS NOT BROUGHT O N RECORD ANY EVIDENCE TO DEVIATE FROM THE EARLIER DISCLOSURE OF INCOME AS BUSINESS AND PROFESSION. ACCORDINGLY, SOURCE OF INCOME REMAIN ED THE SAME. BY THE IMPUGNED ORDER THE CIT(A) CONFIRMED THE HEAD OF INCOME AS ASSESSED BY THE AO. 4. WE HAVE CONSIDERED T HE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED BY THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF SHAMBHU INVESTMENT, 263 ITR 143 , WHEREIN IT WAS HELD THAT INC OME DERIVED FROM HOUSE PROPERTY IS REQUIRED TO BE ASSESSED AS INCOME FROM HOUSE PROPERTY. 5. IT IS ALSO A SETTLED PRINCIPLE IN TAXATION THAT THE INCOME NEEDS TO BE CLASSIFIED ACCORDING TO THE HEADS OF INCOME AS MENTIONED IN SECTION 14 OF THE INCOME TAX A CT, 1961. THE ASSESSEE HAD MADE AN ERRONEOUS CLASSIFICATION IN HIS HEAD OF INCOME IN THE PREVIOUS YEAR, BUT THIS DOES NOT CHANGE THE NATURE OF THE INCOME. ONCE IT IS INCOME FROM PROPERTY IT NEEDS TO BE CLASSIFIED UNDER THAT HEAD ONLY. 6. MERELY BECAUSE I N EARLIER YEARS, THE ASSESSEE COMPANY UNDER MISTAKEN BELIEF HAS OFFERED ITS RENTAL INCOME AS INCOME FROM BUSINESS, HOWEVER, WHEN IT CAME TO KNOW ABOUT THE JUDGMENT OF THE HON BLE SUPREME COURT, IT CORRECTED THE HEAD OF INCOME AND OFFERED THE SAME AS RENTAL INCOM E. THE JUDGMENT OF THE HON BLE SUPREME COURT IS BINDING UNDER ARTICLE 14 1 OF CONSTITUTION OF INDIA . ACCORDINGLY, WE DIRECT THE AO TO TREAT THE RENTAL INCOME AS INCOME FROM HOUSE PROPERTY IN PLACE OF INCOME FROM BUSINESS . 7 . IN THE RESULT, APPEAL OF TH E ASSESSEE IS ALLOWED ITA NO. 1994 /1 1 3 ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 /11/ 201 4 . /1 1 / 2014 SD/ - SD/ - ( ) ( SANJAY GARG ) ( ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 21 / 11 /2014 /PKM , PS COPY OF THE ORDER FORWARDED TO : / BY O RDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//