ACIT 6(3), MUMBAI V. MGEE MARKETING SERVICES P. LTD, MUMBAI

ITA 2471/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8364 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 09-02-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 30-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'I' BENCH, MUMBAI BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER ITA NOS. 2471 & 2472/MUM/2010 (ASSESSMENT YEARS: 2001-02 & 2003-04) ACIT, CIRCLE 6(3) VS. M/S. MGEE MARKETING SERVICES P. LTD. ROOM NO. 522, 5TH FLOOR B-17/18, WADALA UDYOG BHAVA N AAYAKAR BHAVAN, M.K. ROAD 8, NAIGAUM X ROAD MUMBAI 400020 WADALA, MUMBAI 400031 PAN - AAACM 9726 C APPELLANT RESPONDENT APPELLANT BY: SHRI S.K. SINGH RESPONDENT BY: NONE O R D E R PER D.K. AGARWAL, J.M. THESE TWO APPEALS PREFERRED BY THE REVENUE ARE DIRE CTED AGAINST THE COMMON ORDER DATED 07.12.2009 PASSED BY THE LEARNED CIT(A) FOR ASSESSMENT YEARS 2001-02 AND 2003-04. SINCE FACTS A RE IDENTICAL AND COMMON ISSUE IS INVOLVED, BOTH THESE APPEALS ARE DI SPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. BRIEFLY STATED FACTS OF THE ASSESSEE EXTRACTED FROM ITA NO. 2471/MUM/2010 FOR A.Y. 2001-02 ARE THAT THE ASSESSE E COMPANY LEASED OUT ITS PROPERTY CONSISTS OF BUILDING AND LAND APPU RTENANT THERETO TO M/S. HINDUSTAN LEVER LTD. AND CLAIMED THAT THE INCOME FR OM LEASE RENT AS INCOME FROM HOUSE PROPERTY. HOWEVER, THE A.O. WAS OF THE V IEW THAT THE ASSESSEES ACTIVITY CONSISTED OF LETTING OUT FACTORY ON RENT. LETTING OUT OF FACTORY SHOULD, THEREFORE, BE CALLED AS THE BUSINESS OF THE ASSESSE E AND HENCE THE A.O. TREATED THE RENTAL INCOME OF THE PROPERTY UNDER THE HEAD INCOME FROM BUSINESS AS AGAINST INCOME FROM HOUSE PROPERTY CLAI MED BY THE ASSESSEE. ON APPEAL THE LEARNED CIT(A), WHILE OBSERVING THAT THE FACTS OF THE CASE ARE SIMILAR TO THE FACTS FOR THE A.Y. 2005-06 AND COVER ED IN FAVOUR OF THE ASSESSEE BY THE APPELLATE ORDER FOR A.Y. 2005-06 WH EREIN THE CIT(A) RELYING ITA NOS. 2471 & 2472/MUM/2010 M/S. MGEE MARKETING SERVICES P. LTD. 2 ON THE JUDGEMENT IN THE CASE OF EAST INDIA HOUSING & LAND DEV. TRUST LTD. VS. CIT 42 ITR 49 (SC) HELD THAT THE APPELLANT HAS FULFILLED ALL THE CONDITIONS FOR TAXABILITY OF INCOME EARNED BY IT UNDER THE HEA D OF INCOME FROM HOUSE PROPERTY DECIDED THE ISSUE IN FAVOUR OF THE ASSESS EE BY HOLDING THAT THE INCOME EARNED BY THE APPELLANT FROM LETTING OUT OF PROPERTY WOULD BE ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPERT Y. 3. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 4. THE COMMON GROUNDS TAKEN BY THE REVENUE FOR BOTH TH E ASSESSMENT YEARS READ AS UNDER: - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN TREATING THE INCOME RE CEIVED FROM LETTING OUT OF FACTORIES AS HOUSE PROPERTY & INCOM E INSTEAD OF BUSINESS INCOME AND ALLOWING DEDUCTION THEREFROM U/S 24 (A) & 24 (B) IGNORING THE FACT THAT THE ASSESSEE COMPAN Y WAS NOT HAVING ANY ACTIVITY SINCE IT INCEPTION EXCEPT GIVIN G THE FACTORIES ON RENT. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CI T(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFI CER BE RESTORED. 5. AT THE TIME OF HEARING NONE ATTENDED ON BEHALF OF T HE ASSESSEE NOR FILED ANY APPLICATION FOR ADJOURNMENT OF THE CASE. IT WAS, THEREFORE, DECIDED TO DISPOSE OF THE APPEAL ON MERITS AFTER HEARING TH E LEARNED D.R. WHO HAS SUPPORTED THE ORDER OF THE A.O. 6. WE HAVE CAREFULLY HEARD THE LEARNED D.R. AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS THE ASSESSEE HAS SHOWN THE INCOME FROM LEASING OUT OF FACTORY BUILDING AND LAND APPURTENANT THERETO UNDER THE HEAD INCOME FRO M HOUSE PROPERTY WHICH WAS TREATED BY THE A.O. AS INCOME FROM BUSINE SS. HOWEVER, THE LEARNED CIT(A) FOR A.Y. 2005-06 HAS HELD THAT THE R ENTAL INCOME IS LIABLE TO BE TAXED AS INCOME FROM HOUSE PROPERTY AND THE DEDU CTION CLAIMED BY THE ASSESSEE UNDER SECTION 24(A) AND 24(B) SHALL BE ALL OWED. ON FURTHER APPEAL BY THE REVENUE BEFORE THE TRIBUNAL IN ACIT VS. M/S. MGEE MARKETING SERVICES P. LTD. IN ITA NO. 5206/M/09 FOR A.Y. 2005 -06 ORDER DATED 19 TH ITA NOS. 2471 & 2472/MUM/2010 M/S. MGEE MARKETING SERVICES P. LTD. 3 NOVEMBER 2010 THE TRIBUNAL WHILE FOLLOWING THE DECI SION OF THE HON'BLE SUPREME COURT IN THE CAES OF SHAMBHU INVESTMENT PVT . LTD. VS. CIT 263 ITR 143 UPHELD THE ORDER OF THE LEARNED CIT(A) THAT THE INCOME OF THE PROPERTY BE ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPE RTY. 7. IN THE ABSENCE OF ANY CONTARY MATERIAL PLACED ON RE CORD BY THE REVENUE, WE RESPECTFULLY FOLLOWNG THE ORDER OF THE TRIBUNAL HOLD THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE INCOME FROM LETTING OUT OF THE BUILDING AND LAND APPURTENANT THERETO SHOULD BE ASS ESSED UNDER THE HEAD INCOME FROM HOUSE PROEPRTY AND ACORDINGLY WE ARE INCLINED TO UPHOLD THE FIDNINGS OF THE LEARNED CIT(A) THAT THE INCOME FROM LETTING OUT OF THE PROPERTY WOULD BE ASESSABLE UNDER THE HEAD HOUSE P ROPERTY. THE COMMON GROUNDS TAKEN BY THE REVENUE FOR BOTH THE ASSESSMEN T YEARS 2001-02 AND 2003-04 ARE, THEREFORE, REJECTED. 8. IN THE RESULT, REVENUES APPEALS STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH FEBRUARY 2011. SD/- SD/- ( RAJENDRA SINGH ) (D.K. AGARW AL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED:18 TH FEBRUARY 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XII, MUMBAI 4. THE CIT VI, MUMBAI CITY 5. THE DR, I BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P. ITA NOS. 2471 & 2472/MUM/2010 M/S. MGEE MARKETING SERVICES P. LTD. 4 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 09.02.11 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 10.02.11 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER