MAHENDRA TEJSHI SHAH, MUMBAI V. ITO WD 22(2)(2), MUMBAI

ITA 2246/MUM/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1892 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 10-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJAYKUMAR OZJA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI AMARJIT SINGH , JM ITA NO. 2246 / MUM/20 1 8 & 2247/MUM/2018 & 2248/MUM/2018 ( ASSESSMENT YEAR : 2010 - 11, 2011 - 12 & 2012 - 13 ) SHRI MAHENDRA TEJSHI SHAH 201, VARUN AMIN VILLA, PLOT NO.16 - BM DATTATRAY ROAD TPS III, SANTACRUZ WEST MUMBAI 400 054 VS. THE INCOME TAX OFFICER, WARD 22(2)(2), PIRAMAL CHAMBERS, MUMBAI 400 012 PAN/GIR NO. AAFPS3364J ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY NONE REVENUE BY SHRI AJAYKUMAR OZJA DATE OF HEARING 12 / 11 /201 8 DATE OF PRONOUNCEMENT 16 / 11 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 34, MUMBAI DATED 20/02/2018 FOR A.Y.2011 - 11, 2 011 - 12 & 2012 - 13 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 OF THE IT ACT, 1961. 2. NOBODY APPEARED ON BEHALF OF THE ASSESSEE INSPITE OF GIVING OPPORTUNITY. THE BENCH THEREFORE, DECIDED TO DISPOSE THE APPEAL S AFTER GOING THROUGH THE OR DER OF THE AUTHORITIES BELOW AND CONSIDERING THE CONTENTION OF LEARNED DR. ITA NO. 2246/MUM/2018 & OTHER APPEALS SHRI MAHENDRA TEJSHI S HAH 2 3. IN ALL THE APPEALS, COMMON GRIEVANCE OF ASSESSEE RELATES TO CIT(A)S ACTION IN UPHOLDING ACTION OF AO FOR TREATING THE LOAN AND INTEREST INCOME AS INCOME FROM OTHER SOURCES INS TEAD OF INCOME FROM HOUSE PROPERTY . 4. WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME FROM BUSINESS, CAPITAL GAINS AND INCOME FROM OTHER SOURCES. 5. IN THE RETURN OF INCOME ASSESSE E HAS CLAIMED RENTAL INCOME AS BUSINESS AND PROFESSION AND CLAIMED EXPENSES. IN THE COURSE OF ASSESSMENT PROCEEDINGS, REVISED COMPUTATION WAS FILED WHERE INCOME FROM LETTING OFF PROPERTY WAS SHOWN UNDER THE HEAD INCOME FROM HOUSE PROPERTY. HOWEVER, THE LOW ER AUTHORITIES HAVE NOT ACCEPTED ASSESSEES CONTENTION AND REACHED TO THE CONCLUSION THAT THE INCOME FROM THE PROPERTY HELD UNDER THE TENANCY ACT BY VIRTUE OF WHICH THE ASSESSEE HAS TENANCY RIGHT OVER THE PROPERTY CANNOT PARTAKE THE CHARACTER OF BUSINESS I NCOME. MOREOVER, THE INCOME RECEIVED BY THE ASSESSEE VIDE LEAVE AND LICENCE AGREEMENT IS NOT IN THE NATURE OF RENT, BUT COMPENSATION. THEREFORE, THE SAME CANNOT ALSO BE ASSESSED UNDER THE HE AD 'INCOME FROM HOUSE PROPERTY. HOWEVER, THE AO TREATED THE SAME A S INCOME FROM OTHER SOURCES. 6. BEFORE THE LOWER AUTHORITIES IT WAS CONTENTION OF ASSESSEE THAT IT HAS GIVEN PREMISES TO UNION BANK OF INDIA ON RENTAL BASIS WHICH IN TURN HAS BEEN TAKEN ON RENTAL BASIS FROM. TRUSTEES OF SHREE MAHAVIR JAIN ITA NO. 2246/MUM/2018 & OTHER APPEALS SHRI MAHENDRA TEJSHI S HAH 3 VIDYALAYA VIDE TENAN CY AGREEMENT EXECUTED ON, 07/04/ 1993. THE ASSESSEE IS HOLDING THIS PREMISES FOR MORE THAN 12 YEARS AND HENCE ASSESSEE IS DEEMED OWNER OF PROPERTY AS SPECIFIED U/S. 22 READ WITH SECTION 27(IIIB) AND SECTION 269UA(B) & (F). WE ALSO OBSERVE THAT BEFORE THE LOWER AUTHORITIES ASSESSEE HAS RELIED ON THE DECISION OF THE HONBLE SUPREME COURT INCASE OF PODDAR CEMENT PVT. LTD., 226 ITR 626. 7 . BEFORE THE LOWER AUTHORITIES, THE ASSESSEE HAS HIGHLIGHTED THE FACT THAT THE TENANCY AGREEMENT WAS FOR A PERIOD OF NO T LESS THAN 12 YEARS, HENCE THE SAME WAS CONTINUED DURING THE F.Y.2009 - 10, ACCORDING TO WHICH IT WAS 16 YEARS OLD. 8 . IN VIEW OF THE ABOVE OBSERVATION, WE FOUND THAT LOWER AUTHORITIES HAVE NOT PROPERLY CONSIDERED THE PERIOD OF HOLDING OF THE ASSET BY THE ASSESSEE AND ALSO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF PODDAR CEMENT PVT. LTD., IN THE SUBSTANTIAL INTEREST OF JUSTICE, WE RESTORE THE MATTER BACK TO THE FILE OF THE AO FOR DECIDING AFRESH AFTER CONSIDERING THE JUDICIAL PRONOUNCEMENTS O F HONBLE BOMBAY HIGH COURT IN THE CASE OF PELICAN INVESTMENT PVT. LTD., 26 TAXMANN.COM 69 AND ALSO HONBLE SUPREME COURT DECISION REFERRED ABOVE AND THE FACT THAT ASSESSEE IS CONTINUOUSLY HOLDIN G THE PROPERTY FOR 16 YEARS. WE DIRECT ACCORDINGLY. 9 . WITH RESPECT TO THE INTEREST INCOME, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LOWER AUTHORITIES FOR TREATING THE SAME AS INCOME FROM OTHER SOURCES. ITA NO. 2246/MUM/2018 & OTHER APPEALS SHRI MAHENDRA TEJSHI S HAH 4 1 0 . IN THE RESULT, ALL THE APPEALS OF ASSESSEE ARE ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON THI S 16 / 11 /201 8 SD/ - ( AMARJIT SINGH ) SD/ - (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 16 / 11 /201 8 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRA R) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//