ITO, Ward - 13(1), Kolkata , Kolkata V. M/s. Ashamangal Portfolio Pvt. Ltd., Howrah

ITA 2371/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0496 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 23-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M GHOSH LD
• Assessee Lawyers: R AKESH JAIN FCA LD
• Keywords: Business income; Assessment record

Judgement Text

1 I.T.A NO. 2371/KOL/2017 M/S. ASHAMANGAL PORTFOLIO P.LTD IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOLKATA BEFORE: SHRI J. SUDHAKAR REDDY , ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A NO. 2 37 1 /KOL/201 7 A.Y: 20 1 3 - 14 INCOME TAX OFFICER VS. M/S. ASHAMANGAL WARD 13(1), KOLKATA PORTFOLIO PVT. LTD . PAN:AABCA 3340B [APPELLANT] [RESPONDENT] FOR THE APPELLANT : SMT. M. GHOSH, LD.SR.DR FOR THE RESPONDENT : SHRI R AKESH JAIN, FCA , LD.AR DATE OF HEARING : 03 - 09 - 2018 DATE OF PRONOUNCEMENT : 14 - 0 9 - 201 8 ORDER SHRI S.S. VISWANETHRA RAVI , JM: TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), 5 , KOLKATA DT. 15 - 09 - 2017 FOR THE A.Y 20 1 3 - 14 . 2. THE ONLY ISSUE IS TO BE DECIDED AS TO WHETHER THE CIT - A IS JUSTIFIED IN TREAT ING THE INCOME FROM WAREHOUSING STRUCTURE AS INCOME FROM BUSINESS AS AGAINST INCOME FROM HOUSE PROPERTY AS HELD BY THE AO IN THE FACT S AND CIRCUMSTANCES OF THE CASE. 3. A FTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD , WE FIND THAT THE CIT - A PLACED HIS RELIANCE ON THE ORDER OF CO - ORDINATE BENCH, ITAT, KOLKATA, IN ASSESSEES OWN CASE FOR THE A.YS 2000 - 01 TO 2005 - 06 AND 2008 - 09 AND HELD THAT INCOME DERIVE D FROM WAREHOUSING CHARGES ARE INCOME FROM BUSINESS VIDE PARA 3.2 & 3.3, PAGES - 5 & 6 OF HIS ORDER. THE LD. DR DID NOT CONTROVERT THE ABOVE SUBMISSIONS AND PLACED NO ORDER CONTRARY TO THE SAID ORDER OF ITAT, KOLKATA . WE FIND THAT TH E CIT - A DISCUSSED THE ISSUE IN DETAIL AND HELD THAT INCOME FROM WAREHOUSING STRUCTURE IS TO BE CONSIDERED AS INCOME FROM BUSINESS BY OBSERVING AS UNDER: - 2 I.T.A NO. 2371/KOL/2017 M/S. ASHAMANGAL PORTFOLIO P.LTD 3.2 I HAVE GONE THROUGH THE SUBMISSION OF THE APPELLANT, AND PERUSED THE RELEVANT ASSESSMENT RECO RDS. THE CIT (APPEAL) - 5, KOLKATA, ON THE SAME ISSUE IN HIS ORDER FOR ASSESSMENT YEAR 2010 - 11, FOLLOWING THE DECISION OF THE HONBLEITAT, KOLKATA IN THE APPELLANTS OWN CASE HAD ALLOWED THE APPELLANTS PLEA, THAT INCOME FROM WAREHOUSING IS AN INCOME FROM BUSINESS. ON PERUSAL OF THE RECORDS, IT APPEARS THAT THE HONBLE ITAT KOLKATA IN THE APPELLANTS OWN CASE FOR THE ASSESSMENT YEARS 2000 - 01, 2001 - 02, 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 AND 2008 - 09 HAS DISMISSED THE APPEAL OF REVENUE AND UPHELD THE APPELLANT S CONTENTION THAT INCOME FROM WAREHOUSING CHARGES AND UPHELD THE HEAD INCOME FROM BUSINESS AND NOT INCOME FROM HOUSE PROPERTY. THE SALIENT OBSERVATIONS OF THE ITAT, KOLKATA IN THEIR RESPECTIVE ORDERS ARE REPRODUCED IN BREVITY AS FOLLOWS: - ON CAREFU L ANALYSIS OF THE UNDISPUTED FACTS NARRATED SUPRA IN THE LIGHT OF THE VARIOUS JUDICIAL PRONOUNCEMENTS THAT WERE RELIED ON BY THE ASSESSEE IN SUPPORT OF ITS CLAIMS. IT IS FOUND THAT THE ASSESSEE IS NEITHER THE OWNER NOR THE LESSOR OF THE PROPERTY THAT WAS E XPLOITED BY THE ASSESSE BY CARRYING ON BUSINESS AFTER REPAIRS AND MAINTENANCE, GIVING ON LEASE TO OTHERS AND BY PROVIDING ELECTRICITY CONNECTIONS, SECURITY ETC. AND DERIVES INCOME THEREFROM. THE PROVISIONS CONTAINED IN SECTION 22 OF THE I.T ACT CLEARLY ME NTIONS THAT THE ANNUAL VALUE OF PROPERTY CONSISTING OF ANY BUILDINGS OR LANDS APPURTENANT THERETO OF WHICH THE ASSESSE IS THE OWNER, OTHER HAN SUCH PORTIONS OF SUCH PROPERTY AS HE MANY OCCUPY FOR THE PURPOSES OF ANY BUSINESS OR PROFESSION CARRIED ON BY H IM THE PROFITS OF WHICH ARE CHARGEABLE TO INCOME - TAX, SHALL BE CHARGEABLE TO INCOME TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY. IN CLEAR TERMS THE PROVISION SAYS THAT THE PROPERTY MUST BE OWNED BY THE ASSESSE IN ORDER TO CHARGE THE INCOME DERIVED FRO M IT OR ITS PORTION OTHER HAN THAT PORTION USED FOR CARRYING ON BUSINESS ACTIVITIES AS INCOME FROM HOUSE PROPERTY. IN THE PRESENT CASE ON HAND BY GOING THROUGH ALL THE DOCUMENTS AND MATERIAL MADE AVAILABLE BY THE ASSESSE BEFORE THE DEPARTMENTAL AUTHORITIES AND MENTIONED IN THE ORDERS PASSED BY THEM NOWHERE IT WAS POINTED OUT THAT HOW THE ASSESSE BECAME THE PROPERTY OWNER OR LESSEE THEREOF. THE ITAT, KOLKATA HAS REFERRED TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF RB JODHAMAL KUTHALIA VS. CIT 82 ITR 570 WHEREIN IT WAS HELD THAT THE OWNER MUST BE THE PERSON, WHO CAN EXERCISE, THE RIGHTS OF OWNER NOT ON BEHALF OF THE OWNERSHIP BUT IN HIS OWN RIGHT. THIS TRIBUNALS BOMBAY BENCH AS WELL AS HYDERABAD BENCH REPORTED IN 110 ITD 331 AND 337 AND 99 ITD 18 IS OF THE SAME VIEW TO THE EFFECT THAT IF THE ASSESSE IS NOT THE OWNER OF THE BUILDING, INCOME FROM LETTING OUT THE SAME WITH AMENITIES WOULD HAVE TO BE ASSESSED EITHER UNDER HEAD BUSINESS OR INCOME FROM OTHER SOURCES DEPENDING ON THE FACT AS TO WHETHER RENTING OUT OF THE BUILDING OR LAND WAS APPURTENANT THERETO WAS DONE IN THE COURSE OF BUSINESS OR NOT.IN THE LIGHT OF HE RATIO LAID DOWN BY THE JUDICIAL FORUMS, WE ARE OF THE CONSIDERED VIEW, THAT THE APPELLANT IS NOT THE OWNER OF THE PROPERTY , IN QUESTION AND N OT HAVING ANY RIGHT OVER IT AND IS NOTHING, BUT THE BUSINESS INCOME BUT NEVER BE THE INCOME FROM HOUSE PROPERTY. THIS ISSUE RAISED BY THE APPELLANT IS ACCEPTED BY DIRECTING THE DEPARTMENTAL AUTHORITIES TO TREAT THE SAME ACCORDINGLY. 3.3 AFTER A CAREFUL CONSIDERATION OF THE DECISIONS AS FOREGOING INCLUDING THE BINDING DECISIONS OF THE JURISDICTIONAL ITAT, KOLKATA, THE ASSESSMENT RECORDS, AND THE SUBMISSIONS OF THE APPELLANT, INCOME FROM WAREHOUSING STRUCTURE IS TO BE CONSIDERED AS INC OME FROM BUSINESS. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. THIS GROUND OF APPEAL IS SUCCEEDS AND, THEREFORE, ALLOWED. 4. ON PERUSAL OF ABOVE, THE CO - ORDINATE BENCH IN ASSESSEES OWN CASE SUPRA REFERRED TO THE DECISION OF THE HONBLE SUPREME COU RT IN THE CASE OF RB JODHAMAL KUTHALIA REPORTED IN 82 ITR 570 AND THE CIT - A OBSERVED THAT BENCHES OF BOMBAY AND HYDERABAD FOLLOWED THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SUPRA. THEREFORE, WE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE CIT - A AND IT IS JUSTIFIED. GROUND NO. 1 RAISED BY REVENUE IS DISMISSED. 5. GROUND NO. 2 IS GENERAL IN NATURE AND NEEDS NO ADJUDICATION. HENCE, IT IS DISMISSED. 3 I.T.A NO. 2371/KOL/2017 M/S. ASHAMANGAL PORTFOLIO P.LTD 6. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 - 0 9 - 2018 SD/ - SD/ - J. SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 14 - 0 9 - 2018 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT / DEPART MENT: INCOME TAX OFFICER, WARD 13(1), KOLKATA 9 TH FLOOR, 110 SHANTI PALLY, AAYKAR BHAWN (POORVA), KOLKATA - 107. 2 RESPONDENT / ASSESSEE: M/S. ASHAMANGAL PORTFOLIO PVT. LTD. 103/24/1 FORESHORE ROAD, SHIBPUR,HOWRAH - 711102. 3. THE CIT(A), 5 KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, S ENIOR PRIVATE SECRETARY HEAD OF OFFICE, ITAT KOLKATA