SOHAM DATA PROCESSING AND FINANCE P. LTD, MUMBAI V. DCIT 7(2), MUMBAI

ITA 2314/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0424 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 07-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR A K NAYAK
• Assessee Lawyers: S C TIWARI; RUTUJA PAWAR
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'E' BENCH, MUMBAI BEFORE SHRI P K BANSAL, VICE PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NOS.2313 & 2314/MUM/2014 (ASSESSMENT YEARS: 2007-08 & 2009-10) M/S. SOHAM DATA PROCESSING VS. D C I T - 7(2) AND FINANCE PVT. LT D. LAHALAXMI INDL. ESTATE L.J. CROSS ROAD, MAHIM MUMBAI 400016 AAYAKAR BHAVAN M.K. ROAD MUMBAI 400020 PAN AAECS7700A APPELLANT RESPONDENT APPELLANT BY: SHRI S.C. TIWARI & MS. RUTUJA PAWAR RESPONDENT BY: DR. A.K. NAYAK DATE OF HEARING: 12.06.2017 DATE OF PRONOUNCEMENT: 12.06.2017 O R D E R PER P.K. BANSAL, VICE PRESIDENT SINCE COMMON ISSUES ARE INVOLVED IN BOTH THESE APPE ALS, THEY ARE DISPOSED OFF BY THIS COMMON ORDER. 2. IN BOTH THE YEARS THE ASSESSEE HAD TAKEN THE FOLLOW ING GROUNDS OF APPEAL: - 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED COMMISSIONER (APPEALS) [LD. CIT (A)] HAS ER RED IN CONCLUDING THAT INCASE THE PREMISES HAVE BEEN TAKEN ON RENT AND HAVE BEEN LICENSED OUT, THEN THE INCOME HAS TO BE A SSESSED AS INCOME FROM OTHER SOURCES. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT (A) HAS ERRED IN UPHOLDING THE VIEW OF THE LD. ASSESSING OFFICER THAT THE 'LEAVE & LICENSE' FEES RECEIVED HA S TO BE ASSESSED AS 'INCOME FROM OTHER SOURCES' AND NOT AS 'INCOME FROM BUSINESS OR PROFESSION'. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT (A) HAS ERRED IN CONCLUDING THAT THE ORDER OF THE HONORABLE ITAT, E BENCH MUMBAI IN ITA NUMBER 774/ M U MS/ ITA NOS. 2313&2314/MUM/2014 SOHAM DATA PROCESSING & FINANCE PVT. LTD. 2 2009 DATED 26.02.2010 DIRECTS THE ALLOWANCE OF 60% OF EXPENSES WHICH THE LD. ASSESSING OFFICER HAS ALLOWE D IN THE ASSESSMENT ORDER AND HENCE NOT CALLED FOR ANY INTER FERENCE, WHERE, INFACT, THE SAID ITAT ORDER GIVES NO SUCH DI RECTIONS. 4. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT (A) HAS ERRED IN ENHANCING THE ASSESSED INC OME U/S 250 OF THE ACT, WITHOUT APPRECIATING THE FACT THAT THE APPELLANT WAS UNDER CONTRACTUAL OBLIGATION TO PAY THE MAINTENANCE CHARGES AND WITHOUT APPRECIATING THE FACT THAT THE MAINTENANCE CONTRACT HAS BEEN OUTSOURCED TO M/S. MAHALAXMI ENGINEERING COMPA NY PVT. LTD. 5. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT (A) HAS ERRED IN APPRECIATING THAT FOR THE PURPOSES OF PROVIDING AMENITIES TO THE LICENSEES THERE WAS NO D IRECT EMPLOYMENT DONE BY THE APPELLANT, BEING THE CONTRAC T OUTSOURCED TO M/S. MAHALAXMI ENGINEERING COMPANY PVT. LTD. 3. THE LEARNED A.R., AT THE OUTSET, VEHEMENTLY CONTEND ED THAT THE ONLY ISSUE INVOLVED IN BOTH THE APPEALS RELATES TO UPHOL DING THE DECISION OF THE AO BY THE CIT(A) WITH RESPECT TO LEAVE AND LICENSE FEES RECEIVED AND ASSESSED UNDER THE HEAD INCOME FROM BUSINESS OR PR OFESSION. THE LEARNED A.R. CONTENDED THAT THE SAID INCOME HAD TO BE ASSESSED AS INCOME FROM OTHER SOURCES AND THE ISSUE INVOLVED IS SQUARELY COVERED BY THE DECISION OF THIS TRIBUNAL IN ITA NO. 3393 TO 33 95/MUM/2015 IN THE CASE OF THE ASSESSEE VIDE ORDER DATED 07.09.2016. I N THIS REGARD OUR ATTENTIONS WAS DRAWN TOWARDS THE ORDER OF THIS TRIB UNAL IN PARAS 2 AND 2.1 AND THEREFORE IT WAS REQUESTED THAT BOTH THE APPEAL S OF THE ASSESSEE SHOULD BE ALLOWED FOR STATISTICAL PURPOSES. 4. THE LEARNED D.R., ON THE OTHER HAND, RELIED ON THE ORDERS OF THE TAX AUTHORITIES BELOW. 5. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE HAVE GONE THROUGH THE ORD ERS OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEARS 2005- 06, 2006-07 AND 2008- 09 IN WHICH WE NOTED THAT THIS TRIBUNAL VIDE ORDER DATED 07.09.2016, AFTER RECORDING THE SUBMISSIONS OF THE ASSESSEE UNDER PAR AS 2 AND 2.1 ALLOWED ALL THE THREE APPEALS FOR STATISTICAL PURPOSES BY O BSERVING AS UNDER: - ITA NOS. 2313&2314/MUM/2014 SOHAM DATA PROCESSING & FINANCE PVT. LTD. 3 2. DURING HEARING, SHRI S.C. TIWARY ALONG WITH RUTU JA PAWAR, ID. COUNSEL FOR THE ASSESSEE, CONTENDED THAT IT HAS TO BE ASSES SEE AS INCOME FROM OTHER SOURCES. IT WAS ALSO POINTED OUT THAT THE DEC ISION OF THE TRIBUNAL IN ITA NO.774/MUM/2009 DATED 26/02/2010 HAS BEEN WRONG LY QUOTED. IT WAS ALSO CONTENDED THAT THE ISSUE HAS BEEN SETTLED BY HON,BLE APEX COURT IN CHENNAI PROPERTIES AND INVESTMENT LTD. (CI VIL APPEAL NO.4494 OF 2004), SHREENATHJI BALAJI COMPUTECH PVT. LTD. (1TA NOS.6251 & 6253/MUM/2012), ORDER DATED 17/06/2015, INCOME TAX OFFICER VS RASIK LAL & COMPANY (2009) 119 LTD 61 (BORN.) AND T HE DECISION FROM HON'BLE JURISDICTIONAL HIGH COURT IN SOHAM DATA PRO CESSING AND FINANCE PVT. LTD. (JTA NO.4643 OF 2010)(BOM.). ON THE OTHER HAND, THE ID. DR, THOUGH DEFENDED THE ADDITION BUT HAD NO OBJECTION I F THE MATTER MAY BE SENT TO THE FILE OF THE ASSESSING OFFICER TO EXAMIN E THE CLAIM OF THE ASSESSEE AND THE CASES RELIED UPON BY THE ASSESSEE. 2.1. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. WITHOUT GOING INTO MUCH DELIBE RATION AND THE FACTS AVAILABLE ON RECORD, I AM OF THE VIEW THAT FA CTS HAS NOT BEEN PROPERLY APPRECIATED, THEREFORE, THESE THREE APPEAL S ARE REMANDED BACK TO THE FILE OF THE ID. ASSESSING OFFICER TO EX AMINE THE FACTS, CASES RELIED UPON BY THE ASSESSEE AND THEN DECIDE IN ACCO RDANCE WITH LAW, AS AGREED/SUGGESTED FROM BOTH SIDES, THEREFORE, THE SE APPEALS (ALL GROUNDS) ARE ALLOWED FOR STATISTICAL PURPOSES ONLY. NEEDLESS TO MENTION HERE THAT DUE OPPORTUNITY OF BEING HEARD, W ITH FURTHER LIBERTY TO FURNISH THE FACTUAL MATRIX/CASE LAWS, BE PROVIDE D TO THE ASSESSEE. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THIS TRIBUNAL, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH JUNE, 2017. SD/ - SD/ - (PAWAN SINGH) (P.K. BANSAL) JUDICIAL MEMBER VICE PRESIDENT MUMBAI, DATED: 12 TH JUNE, 2017 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -13, MUMBAI 4. THE CIT - 7, MUMBAI 5. THE DR, E BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.