SHIMNIT FINANCE & INVESTMENT P. LTD, MUMBAI V. ACIT (OSD) 3(3), MUMBAI

ITA 2720/MUM/2010

• Counselvise Citation: 272019914 RSA 2010
• Duration Of Justice: 1 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 29-08-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 08-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G P TREVEDI
• Keywords: Business income; Depreciation

Judgement Text

1 ITA 2720/ M/2010 M/S SHIMNI T FINANCE & INVESTMENT P. LTD. IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E BEFORE SHRI N.V. VASUDEVAN, J.M. AND SHRI R.K. PAND A, A.M. ITA NO. 2720/MUM/2010 ASSESSMENT YEAR 2005-06 M/S SHIMNIT FINANCE & INVESTMENT PVT. LTD., 8 TH FLOOR, REGENT CHAMBERS, NARIMAN POINT, MUMBAI - 21. PAN AAKCS 4785K VS. A.C.I.T. (OSD) 3(3), MUMBAI. APPELLANT RESPONDENT APPELLANT BY NONE RESPONDENT BY SHRI G.P. TREVEDI DATE OF HEARING 29.8.2011 DATE OF PRONOUNCEMENT 07.09.2011 ORDER PER R.K. PANDA A.M. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DT. 19.01.2010 OF CIT(A)- 7, MUMBAI RELATING TO A.Y. 2005-06. 3. AN ADJOURNMENT PETITION SEEKING ADJOURNMENT OF T HE CASE WAS FILED. HOWEVER, WHILE GOING THROUGH THE ORDER OF THE LD. C IT(A) IT WAS SEEN THAT THE LD. CIT(A) WHILE DECIDING THE ISSUE HAS FOLLOWED TH E ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2002-03. THEREFORE, T HIS BEING A COVERED MATTER BY THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE , THE ADJOURNMENT PETITION WAS REJECTED. 2 ITA 2720/ M/2010 M/S SHIMNI T FINANCE & INVESTMENT P. LTD. 4. THE ASSESSEE IN ITS VARIOUS GROUNDS OF APPEAL HA S CHALLENGED THE ORDER OF CIT(A) IN CONFIRMING THE BUSINESS CENTER CONDUCT ING FEE OF ` 1,08,000/- AND SERVICE CHARGE INCOME OF ` 6,00,000/- AS INCOME FROM HOUSE PROPERTY AS AGAINST BUSINESS INCOME DECLARED BY THE ASSESSEE AN D FURTHER DISALLOWING THE VARIOUS EXPENSES AS WELL AS DEPRECIATION THEREON. 5. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE HAS SHOWN BUSINESS CENTER CONDUCTING FEES OF ` 108000/- AND SERVICE CHARGES INCOME OF ` 6,00,000/- UNDER THE HEAD PROFITS AND GAINS OF BUSI NESS AND HAD CLAIMED EXPENSES AND DEPRECIATION ON THIS ACCOUNT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THIS INCOME SHOULD NOT BE TAXED UNDER THE HEAD INCOME FROM HOU SE PROPERTY. REJECTING THE EXPLANATION GIVEN BY THE ASSESSEE AND FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SHAMBHU INVEST MENTS P. LTD. 263 ITR 143 AS WELL AS THE ORDER OF HIS PREDECESSOR IN ASSE SSEES OWN CASE FOR A.Y. 2002-03, THE A.O. TREATED THE INCOME ON ACCOUNT OF BUSINESS CENTER CONDUCTING CHARGES AND SERVICE CHARGE INCOME AS IN COME FROM HOUSE PROPERTY. AFTER ALLOWING STATUTORY DEDUCTION U/S 2 4(1), THE A.O. DETERMINED THE INCOME FROM HOUSE PROPERTY AT ` 4,95,600/-. IN APPEAL, THE LD. CIT(A) FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR A.Y. 2002-03 UPHELD THE ACTION OF THE A.O. IN TREATING THE INCOM E AS INCOME FROM HOUSE PROPERTY. AGGRIEVED WITH SUCH ORDER OF THE LD. CI T(A), THE ASSESSEE IS IN APPEAL BEFORE US. 5. AFTER HEARING THE LD. D.R. AND ON PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THE LD. CIT(A) WHILE PASSING THE OR DER HAS FOLLOWED THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE VIDE ITA NO. 3260/MUM/2005 DT. 23.4.2009. THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL AS EXTRACTED BY THE LD. CIT(A) READS AS UNDER:- 3 ITA 2720/ M/2010 M/S SHIMNI T FINANCE & INVESTMENT P. LTD. WE ARE IN AGREEMENT WITH THE FINDINGS OF THE A UTHORITIES BELOW THAT THE INCOME RECEIVED BY THE ASSESSEE WAS FOR THE EXPLOITATION OF THE PROPERTY OWNED BY THE ASSESSEE AND THE SAID INCOME WAS ASSESSABLE AS INCOME FROM PROPERTY IN TH E HANDS OF THE ASSESSEE. THERE IS NO MERIT IN THE CLAIM OF TH E ASSESSEE THAT IN CASE THE INCOME IS NOT ASSESSED AS BUSINESS INCO ME THE SAME SHOULD BE ASSESSED AS INCOME FROM OTHER SOURCES. TH E ASSESSEE BEFORE US IS THE OWNER OF THE PREMISES WHICH IT IS EXPLOITING FOR EARNING RENTAL INCOME AND THE INCOME SO RECEIVED BY THE ASSESSEE IS ASSESSABLE AS INCOME FROM HOUSE PROPERT Y. 6. SINCE THE LD. CIT(A) HAS FOLLOWED THE DECISION O F THE TRIBUNAL IN ASSESSEES OWN CASE, THEREFORE, WE FIND NO INFIRMIT Y IN THE ORDER OF THE LD. CIT(A). ACCORDINGLY THE ORDER OF THE LD. CIT(A) IS UPHELD . THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 7 TH SEPTEMBER, 2011. SD/- SD/- (N.V. VASUDEVAN) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 07.09.2011. RK COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 7, MUMBAI 4. THE CIT 3, MUMBAI 5. THE DR BENCH, E 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI 4 ITA 2720/ M/2010 M/S SHIMNI T FINANCE & INVESTMENT P. LTD. DATE INITIALS 1 DRAFT DICTATED ON 30.8.11 SR. PS 2 DRAFT PLACED BEFORE THE AUTHOR 30.8.11 SR. PS 3 DRAFT PLACED BEFORE THE SECOND MEMBER 4 APPROVED DRAFT COMES TO THE SR. PS SR. PS 5 KEPT FOR PRONOUNCEMENT ON SR. PS 6 FILE SENT TO THE BENCH CLERK SR. PS 7 DATE ON WHICH FILE GOES TO THE HEAD CLERK 8 DATE ON WHICH FILE GOES TO THE AR 9 DATE OF DISPATCH OF ORDER