ITO 8(2)(3), MUMBAI V. NISTHA MALL MANAGEMENT CO. P . LTD, MUMBAI

ITA 2743/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3516 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 23-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 08-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RANDHIR GUPTA
• Keywords: Business income; Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI JOGINDER SINGH , JM AND SHRI SANJAY ARORA , AM ./ I. T.A. NO. 2743/MUM/2013 ( / ASSESSMENT YEAR: 2009 - 10 ) ITO - 8(2)(3), ROOM NO. 213, 2 ND FLOOR, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI - 400 020 / VS. NISHTA MALL MANAGEMENT CO. PVT. LTD. KNOWLEDGE HOUSE, SHYAM NAGAR, OFF. JOGESHWARI, VIKHROLI LINK ROAD, JOGESHWARI (E), MUMBAI - 400 060 ./ ./ PAN/GIR NO. AAECM 0705 H ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI RANDHIR GUPTA / RESPONDENT BY : SHRI NISHIT GANDHI / DATE OF HEARING : 24.2.2016 / DATE OF PRONOUNCEMENT : 29 .2.2016 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN A PPEAL BY THE REVENUE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX ( APPEALS) - 17 , MUMBAI (CIT(A) FOR SHORT) DATED 14.1.2013 , ALLOWING THE A SSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2009 - 10 VIDE ORDER DATED 30.11.2011. 2. THE PR INCIPAL ISSUE ARISING IN THIS APPEAL, AGITATE D PER I T S FIRST FOUR GROUNDS , IS IN RESPECT OF THE HEAD OF INCOME U N DER WHICH THE RENTAL INCOME FOR ALLOWING THE USER 2 ITA NO. 2743/MUM/2013 (A.Y. 2009 - 10) ITO VS. NISHTA MALL MANAGEMENT CO. PVT. LTD. OF HOUSE PROPERTY IS TO BE BROUGHT TO TAX. WHILE THE ASSESSEE, A COMPANY IN THE BUSINESS OF OWNING AND MAINTAINING M ALLS, I.E., COMPOSITE SHOPPING AND BUSINESS COMPLEXES, CLAIMS IT TO BE BUSINESS INCOME, THE REVENUES STAND IS OF THE SAME BEING FROM THE EXPLOITATION OF HOUSE PROPERTY , FOR WHICH THE ACT PRESCRIBES A SEPARATE H EAD OF INCOME, I.E., INCOME FROM HOUSE PROPERTY (CHAPTER IV - C ) , AND IS ACCORDINGLY TO BE TAXED UNDER THE SAID HEAD. AT THE VERY OUTSET, IT WAS SUBMITTED BY THE LD. AUTHORIZED REPRESENTATIVE (AR), THE ASSESSEES COUNSEL , THAT THE ASSESSEES CASE IS SQUARELY COVERED BY THE DEC ISION BY THE T RIBUNAL IN ITS OWN CASE FOR A.Y . 2006 - 07 (IN ITA NO . 5882/MUM/2010 DATED 30/10/2015), A DDUCING A COPY THEREOF. THE TRIBUNAL, FOLLOWING THE DECISION BY THE HONBLE APEX COURT IN CHENNAI PROPERTIES AND INVESTMENT LTD . V. CIT [2015] 373 ITR 673 (SC) , HAS ALLOWED THE ASSESSEES CLAIM. THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE, SO THAT THE SAID DECISION WOULD HAVE CLEAR APPLICATION FOR THE CURRENT YEAR AS WELL. 3. WE HAVE PERUSED THE SAID ORDER BY THE TRIBUNAL, WHEREIN , IT , E XAMINING THE NATURE OF THE INCOME AS WELL AS THE JUDICIAL AUTHORITY ON THE SUBJECT , H AS DECIDED BY ISSUING DEFINITE FINDINGS OF FACT, HOLDING THE NATURE OF THE SAID INCOME TO BE IN THE NATURE OF BUSINESS INCOME, SO THAT THE ASSESSEE WOULD STAND TO BE ALLOW ED ALL THE EXPENSES INCURRED IN RELATION TO THE PROMOTION OF THE UPKEEP OF THE M ALL. REFERENCE FOR THE PURPOSE MAY BE MADE TO PARAS 2 TO 5 O F THE SAID ORDER (COPY ON RECORD), WHICH WE HAVE PERUSED. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) COULD NOT BRING T O OUR NOTICE ANY CHANGE IN THE FACTS AND CIRCUMSTANCES WITH REFERENCE TO THE PRECEDING YEAR. UNDER THE CIRCUMSTANCES, WE THEREFORE HAVE NO HESITATION IN ALLOWING THE ASSESSEES CLAIM. WE DECIDE ACCORDINGLY. 4. THE ONLY OTHER ISSUE ARISING IN THIS APPEAL IS PER ITS G ROUND 5, WHICH , AGAIN , RELATES TO THE HEAD OF INCOME UNDER WHICH THE INCOME BY WAY OF INTEREST ON INCOME - TAX RE FUND IS TO BE ASSESSED , THE ASSESSEE CLAIMING IT TO BE A BUSINESS RECEIPT. THE LD. 3 ITA NO. 2743/MUM/2013 (A.Y. 2009 - 10) ITO VS. NISHTA MALL MANAGEMENT CO. PVT. LTD. CIT(A) HAS ALLOWED THE ASSESSEES CLAIM HOLDING TH AT THE SAID INTEREST HAD A DIRECT AND A PROXIMATE NEXUS WITH THE APPELLA N T S BUSINESS. WE FIND NO BASIS FOR THE SAID FINDING. INCOME - TAX IS A LEV Y ON INCOME , FROM WHATEVER SOURCE DERIVED. BUSINESS , AS SUCH, IS ONLY A SOURCE OF INCOME FROM WHICH INCOME COUL D BE EARNED. THE ASSESSEE DOES NOT HAVE ANY BUSINESS RELATIONSHIP WITH THE REVENUE NOR COULD IT THEREFORE BE SAID THAT THE EXCESS TAX DEPOSIT, ON WHICH THE REFUND ARISES, STANDS MADE IN THE COURSE OF THE BUSINESS. G OING BY THE ASSESSEES STAND, THE INTERES T PAID TO THE REVENUE, FOR THE DELAY IN DEPOSIT OF TAX OR OTHER LEV Y UNDER THE ACT WOULD QUALIFY AS A BUSINESS EXPENDITURE , A WHOLLY UNMAINTA INA BLE PROPOSITION, REJECTED BY THE APEX C OURT, AS IN THE CASE S OF BHARAT COMMERCE & INDUSTRIES LTD. V. UNION OF IN DIA [ 1998 ] 230 ITR 733 (SC) AND EAST INDIA PHARMACEUTICAL WORKS VS. CIT [1997] 224 ITR 627 (SC ) . WHY, INCOME - TAX ITSELF WOULD STAND TO QUALIFY AS A DEDUCTIBLE BUSINESS EXPENSE. THE ASSESSEES CASE IS WHOLLY WITHOUT MERIT, SO THAT THE SAID INCOME WOULD ONLY BE ASSESSABLE U/S. 56. WE DECIDE ACCORDINGLY. 5. IN THE RESULT, THE R EVENUE S APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON FEBRUAR Y 29 , 201 6 SD/ - SD/ - ( JOGINDER SIN GH ) (S ANJAY ARORA) / J UDICIAL MEMBER / A CCOUNTANT MEMBER MUMBAI ; DATED : 29 . 02 .201 6 . . ./ ROSH ANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4 ITA NO. 2743/MUM/2013 (A.Y. 2009 - 10) ITO VS. NISHTA MALL MANAGEMENT CO. PVT. LTD. 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGIST RAR) , / ITAT, MUMBAI