Appeal details
Counselvise Citation
[2017] 126 COUNSELVISE.COM (IT) 9223 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 year(s) 7 month(s) 9 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
04-10-2017
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
26-05-2015
Assessment Year
2008-2009
Appeal Filed On
24-02-2012
Judgement Text
LUVISH INFOTECH PROJECTS PRIVATE LIMITED IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ITA NOS. 1133,558 &724/HYD/2010 & ITA NOS.1010/HYD/2009 & ITA NO.308/HYD/2012 (ASSESSMENT YEARS: 2004-05, 2005-06, 2006-07 & 2008 -09) LUVISH INFOTECH PROJECTS PVT.LTD SILICON TOWERS, KONDAPUR VILLAGE, MADHAPUR HYDERABAD 500 032 / VS. (I) COMMISSIONE R OF INCOME TAX (A)-V (II)COMMISSIONER OF INCOME TAX (A)-IV HYDERABAD ( /APPELLANT ) : ( ! / RESPONDENT ) & ITA NO.897/HYD/2010 (ASSESSMENT YEAR: 2006-07) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 16(2) HYDERABAD / VS. LUVISH INF OTECH PROJECTS PVT.LTD SILICON TOWERS, KONDAPUR VILLAGE, MADHAPUR HYDERABAD 500 032 ( /APPELLANT ) : ( ! / RESPONDENT ) & ITA NO.2745/MUM/2013 & ITA NO.2748/MUM/2013 (ASSESSMENT YEARS: 2007-08 & 2009-10) LUVISH INFOTECH PROJECTS PRIVATE LIMITED 2 DEPUTY COMMISSIONER OF INCOME TAX 8(2) ROOM NO.216-A AAYKAR BHAVAN M.K.ROAD MUMBAI 400 020 / VS. LUVISH INFOTECH PROJECTS PVT.LTD SANI ARMA OPP. ISKCON TEMPLE RAUT LANE, JUHU MUMBAI- 400 049 ( /APPELLANT ) : ( ! / RESPONDENT ) & ./I.T.A. NO.1992/MUM/2013 ( / ASSESSMENT YEAR: 2009-10) LUVISH INFOTECH PROJECTS PVT.LTD SANI ARMA OPP. ISKCON TEMPLE RAUT LANE, JUHU MUMBAI- 400 049 / VS. DEPUTY COMMISSIONER OF INCOME TAX 8(2) ROOM NO.216-A AAYKAR BHAVAN M.K.ROAD MUMBAI 400 020 $ ./ ./PAN/GIR NO. AADCM-4966-H ( /APPELLANT ) : ( ! / RESPONDENT ) ASSESSEE BY : NARESH JAIN, LD. AR REVENUE BY : R.P.MEENA & SAURABH DESHPANDE, LD. DRS / DATE OF HEARING : 24/08/2017 / DATE OF PRONOUNCEMENT : 04 /10/2017 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THESE ARE NINE APPEALS BY ASSESSEE AS WELL AS RE VENUE FOR DIFFERENT ASSESSMENT YEARS. SINCE COMMON ISSUES ARE INVOLVED IN THE APPEALS, WE DISPOSE-OFF THE SAME BY WAY OF THIS COM MON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. FOR EASE OF REFERE NCE, THE APPEALS ARE TABULATED IN THE FOLLOWING MANNER:- LUVISH INFOTECH PROJECTS PRIVATE LIMITED 3 2.1 FIRST, WE TAKE UP ASSESSEES APPEAL ITA NOS. 55 8/HYD/2010 FOR AY 2005-06 AS THE LEAD YEAR WHICH CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-V, HYDERABAD [CIT(A)] APPEA L NO. 071/DC- 16(2)/CIT(A)-V/2008-09 DATED 02/03/2010. THE ASSESS MENT WAS FRAMED BY LD. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 16 (2), HYDERABAD [AO] ON 30/09/2008. THE FOLLOWING GROUNDS HAVE BEEN RAISED:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED COMMISSIONER OF INCOME TAX (A) ERRED IN CONFIRMING ALL THE ADDIT IONS MADE BY LD. ASSESSING OFFICER AND ACCORDINGLY DISMISSING THE APPEAL OF YO UR APPELLANT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN TREATING THE LEASE RENTALS I NCOME ON HOUSE PROPERTY & EQUIPMENT AS INCOME FROM HOUSE PROPERTY AS AGAINST BUSINESS INCOME AS DONE BY YOUR APPELLANT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) GROSSLY ERRED IN NOT CONSIDERING THE CLAIM OF DEPRECIATION ON EQUIPMENT AND AMENITIES PROVIDED BY YOUR APPELLANT TO THE TUNE OF RS. 8.70 CRORES. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) GROSSLY ERRED IN CONFIRMING ASSESSING OFFICERS ORDER WITH RESPECT TO DENIAL OF CLAIM OF DEPRECIATION ON BUILDING & DENIA L OF DEDUCTION OF OTHER EXPENDITURE WHICH ARE PERMISSIBLE UNDER BUSINESS HEAD. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN DISALLOWING PREPAYMENT CHARGES OF RS. 19,72,233/- BY STATING THAT FORECLOSURE PENALTY IS NOT COVERED IN THE DEFINITIO N OF INTEREST AND CANNOT BE ALLOWED UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX ERRED IN DISALLOWING INTEREST ON ADDITIONAL LOAN OF RS.5 CR. OBTAINED FROM HDFC BANK AMOUNTING TO RS.10,81,707/- BY STATING THAT LO AN GIVEN TO SISTER CONCERN DOES NOT QUALIFY FOR BUSINESS EXPEDIENCY. 7. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, TO DELETE FROM OR SUBSTANTIATE THE ABOVE GROUND OF APPEAL. 2.2 FACTS LEADING TO THE SAME THAT THE ASSESSE BEI NG RESIDENT CORPORATE ASSESSEE WAS SUBJECTED TO AN ASSESSMENT U/S 143(3) READ SL.NO. APPEAL NO. ASSESSMENT YEAR FILED BY 1 ITA.NO.1010/HYD/2009 A.Y.2004-05 ASSESSEE 2 ITA.NO.1133/HYD/2010 A.Y.2004-05 ASSESSEE 3 ITA.NO.558/HYD/2010 A.Y.2005-06 ASSESSEE 4 ITA.NO.724/HYD/2010 A.Y.2006-07 ASSESSEE 5 ITA.NO.897/HYD/2010 A.Y.2006-07 REVENUE 6 ITA.NO.2745/MUM/2013 A.Y.2007-08 REVENUE 7 ITA.NO.308/HYD/2012 A.Y.2008-09 ASSESSEE 8 ITA.NO.1992/MUM/2013 A.Y.2009-10 ASSESSEE 9 ITA.NO.2748/MUM/2013 A.Y.2009-10 REVENUE LUVISH INFOTECH PROJECTS PRIVATE LIMITED 4 WITH SECTION 147 OF THE INCOME TAX ACT,1961 FOR IMPUGNED ASSESSMENT YEAR [AY] ON 30/09/2008 AT RS.99,63,333/- AS AGAINS T LOSS RETURN OF RS.73,86,040/- FILED BY THE ASSESSEE ON 01/11/2005. THE ORIGINAL RETURN WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT. THE CASE WAS SUBSEQUENTLY REOPENED BY ISSUANCE OF NOTICE U/S 148 DATED 02/04/2008 WHICH WAS FOLLOWED BY STATUTORY NOTICE U/S 143(3). 2.3 DURING REASSESSMENT PROCEEDINGS, THE LD. AO OPI NED THAT THE RENTAL INCOME REFLECTED BY THE ASSESSEE IN THE PROF IT & LOSS ACCOUNT WERE ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY AS AGAINST BUSINESS INCOME AS SHOWN BY THE ASSESSEE AND ACCORDINGLY, THE ASSESSEE WAS ELIGIBLE TO CLAIM ONLY STATUTORY D EDUCTION OF 30% AGAINST THE SAME. THE ASSESSEE CONTENDED THAT THE L EASED PREMISE WAS BUILT AS PER EXACT SPACE REQUIREMENTS OF THE TENANT AND THE ASSESSEE PROVIDED MANY OTHER FACILITIES / AMENITIES ALONG WI TH THE PREMISES AND COMPLIED WITH POSSIBLE REQUIREMENTS OF CLAIMING DED UCTION U/S 80-IA. HOWEVER, LD. AO NOTED THAT THE LEASE PERIOD WAS TEN YEARS AND THE ASSESSEE COMPANY WAS NOT CARRYING OUT ANY OTHER ACT IVITY AND FURTHER, COULD NOT FULFILL CERTAIN CONDITIONS TO AVAIL DEDUC TION U/S 80-IA. MOREOVER, THE TENANT WAS DEDUCTING TDS AS APPLICABLE TO RENTA L PAYMENTS AND THE ASSESSEE WAS NOT EXPLOITING THE BUSINESS PREMISES A S COMMERCIAL ASSET AND SIMPLY LEASED OUT THE SAME TO TENANT AND THEREF ORE, THE INCOME WAS ASSESSABLE UNDER THE HEAD HOUSE PROPERTY . FINALLY, PLACING RELIANCE ON SEVERAL JUDICIAL PRONOUNCEMENTS, THE INCOME WAS RE-COMPUTED BY ASSESSING RENTAL INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 2.4 FURTHER, LD. AO NOTED THAT THE ASSESSEE PURCHAS ED THE SAID PREMISE FOR RS.24.42 CRORES DURING AY 2004-05 AND T HE SAME WAS LUVISH INFOTECH PROJECTS PRIVATE LIMITED 5 FINANCED FROM INDUSIND BANK LTD. TO THE EXTENT OF RS.15 CRORES. DURING THE IMPUGNED AY, IT OBTAINED FRESH LOAN OF RS.20.50 CRORES FROM HDFC BANK LIMITED AT LOWER RATE OF INTEREST AND REPAID THE LOAN TAKE N FROM INDUSIND BANK LIMITED . OUT OF FRESH LOAN OBTAINED DURING THE IMPUGNED AY, AN AMOUNT OF RS.5 CRORES WAS ADVANCED TO SISTER CONCERN AS INTEREST FREE ADVANCES AND ACCORDINGLY, LD. AO DISALLOWED PROPORTIONATE INTEREST AGAINST THE SAME WHICH CAME TO RS.10,81,70 7/-. 2.5 IT WAS FURTHER NOTED THAT THE ASSESSEE PAID FORECLOSURE AMOUNT OF RS.19,72,233/- TO INDUSIND BANK LIMITED, THE DEDUCTION OF WHICH COULD NOT BE GRANTED TO THE ASSESSEE UNDER INCOME FROM HOUSE PROPERTY IN VIEW OF THE STATUTORY PROVISIONS. 2.6 FINALLY, BY MAKING ABOVE ADJUSTMENTS, THE INCOM E OF THE ASSESSEE WAS RE-COMPUTED AS RS.99,63,333/-. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITHO UT ANY SUCCESS BEFORE LD.CIT(A) VIDE IMPUGNED ORDER DATED 02/03/20 10. DURING APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED WRITT EN SUBMISSIONS AGAINST WHICH A REMAND REPORT WAS CALLED FOR. THE ASSESSEE REITERATING THE CONTENTIONS SUBMITTED THE TRANSACTION WAS COMPO SITE LETTING OUT OF BUILDING AND PLANT & MACHINERY ALONG WITH VARIOUS O THER AMENITIES / FACILITIES LIKE CENTRALIZED AC, DG SET, CAR PARKING , ELEVATORS ETC. AND THEREFORE, THE SAME WAS ASSESSABLE AS BUSINESS INCOME. THE ATTENTION WAS DRAWN TO THE FACT THAT BORROWED FUNDS WERE USED TO FINANCE THE PROJECT. HOWEVER, NOT CONVINCED, LD.CIT(A) AFTER PL ACING RELIANCE ON VARIOUS JUDGMENTS OF HIGHER AUTHORITIES INCLUDING J UDGMENT OF MADRAS HIGH COURT RENDERED IN CIT VS, CHENNAI PROPERTIES & INVESTMENTS LIMITED [2004 266 ITR 685] CONCLUDED THAT IMPUGNED INCOME WAS LUVISH INFOTECH PROJECTS PRIVATE LIMITED 6 CHARGEABLE AS INCOME FROM HOUSE PROPERTY ONLY SINCE THE TENANT TOOK FULL CHARGE OF THE BUILDING AND WAS ALSO LIABLE TO PAY ALL ROUTINE EXPENDITURE AND THE ASSESSEE WAS NOT CARRYING OUT A NY ACTIVITY WITH RESPECT TO THE BUILDING. THE ADDITION AGAINST INTE REST EXPENDITURE WAS CONFIRMED SINCE THE SAME COULD NOT BE GRANTED TO TH E ASSESSEE UNDER THE HEAD INCOME FROM HOUSE PROPERTY IN VIEW OF EXPRESS STATUTORY PROVISIONS. AGGRIEVED, THE ASSESSEE IS IN FURTHER A PPEAL BEFORE US. 4.1 THE LD. COUNSEL FOR ASSESSEE [AR], AT THE OUTSE T, DREW OUR ATTENTION TO THE FACT THAT THE LOWER AUTHORITIES CO NCLUDED THAT THE RENTAL INCOME EARNED BY ASSESSEE WAS ASSESSABLE AS INCOME FROM HOUSE PROPERTY BY PLACING RELIANCE ON THE DECISION OF MADRAS HIGH COURT IN CIT VS. CHENNAI PROPERTIES & INVESTMENTS LIMITED [2004 266 ITR 685] WHICH HAS SUBSEQUENTLY BEEN REVERSED BY THE HONBLE SUPRE ME COURT [2015 373 ITR 673] WHERE THE ASSESSEES APPEAL HAS BEEN ALLOWED AND THEREFORE, THE ISSUE SQUARELY STOOD COVERED IN ASSE SSEES FAVOR BY THE CITED JUDGMENT OF HONBLE COURT. OUR ATTENTION IS A LSO DRAWN TO THE FACT THE RATIO OF THIS DECISION HAS SUBSEQUENTLY BEEN FO LLOWED BY THE SAME COURT IN THE CASE OF RAYALA CORPORATION VS. ACIT [2016) 72 TAXMANN.COM 149]. 4.2 THE LD. AR FURTHER CONTENDED THAT THE LD. CIT, IN SUBSEQUENT ORDER FOR AYS 2007-08 & 2009-10 DIRECTED THE LD.AO TO TRE AT THE IMPUGNED INCOME AS BUSINESS INCOME ONLY AND THE REVENUE HAS ACCEPTED THE STAND OF LD.CIT(A) AND DID NOT CONTEST THE ISSUE AN Y FURTHER. FURTHER, THE LD. AO IN QUANTUM ASSESSMENT FOR AY 2014-15 U/S 143 (3), HIMSELF, ACCEPTED THE SAME UNDER THE HEAD BUSINESS INCOME ONLY AN THEREFORE, FOLLOWING RULE OF CONSISTENCY, THE REVENUE WAS DEBA RRED FROM CHANGING LUVISH INFOTECH PROJECTS PRIVATE LIMITED 7 STANDS UNDER SIMILAR FACTUAL MATRIX. OUR ATTENTION IS FURTHER DRAWN TO THE ORDER OF THIS TRIBUNAL RENDERED IN THE CASE OF ASSE SSEES SISTER CONCERN NAMELY M.S.LUVISH PROJECTS (P) LTD. VS. DCIT [ITA NO. 919/ H/2012 & OTHERS ORDER DATED 23/09/2015] WHERE THE ISSUE HAS BEEN DECIDED IN APPELLANTS FAVOR UNDER IDENTICAL CIRCUMSTANCES. 4.3 LASTLY, LD. AR PLACED RELIANCE ON CBDT CIRCULAR NO.16/2017 DATED 25/04/2017 WHERE IT HAS BEEN CLARIFIED THAT THE RENTAL INCOME EARNED BY UNDERTAKINGS OPERATING INDUSTRIAL PARK / SEZ AS PER APPROVED SCHEME WOULD BE CHARGEABLE TO TAX AS BUSINESS INCOME. 4.4 PER CONTRA, LD. DR WHILE PLACING RELIANCE ON THE STAND OF LOWER AUTHORITIES, FAIRLY CONCEDED THE SETTLED LEGAL POSI TION. 5. WE HAVE CAREFULLY HEARD THE RIVAL CONTENTIONS AN D PERUSED RELEVANT MATERIAL ON RECORD INCLUDING CITED CASE LAWS. AT TH E OUTSET, WE ARE INCLINED TO REPRODUCE THE MAIN OBJECTS OF THE ASSES SEE COMPANY AS EVIDENT FROM COPY OF MEMORANDUM OF ASSOCIATION PLACED ON RECORD:- A. THE MAIN OBJECTS TO BE PURSUED BY THE COMPANY ON ITS INCORPORATION ARE: TO PURCHASE, ACQUIRE, TAKE ON LEASE OR IN EXCHANGE OR IN ANY OTHER LAWFUL MANNER ANY AREA, LAND, BUILDINGS, STRUCTURE AND TURN THE SAME INTO A CCOUNT, DEVELOP THE SAME AND DISPOSE OF OR MAINTAIN THE SAME AND TO BUILD HI-TECH PARKS, SO FTWARE DEVELOPMENT ZONES, SOFTWARE TECHNOLOGY PARKS, PORTS, BIO-TECH PARKS, INDUSTRIAL ESTATES, INDUSTRIAL PARKS, TOWNSHIPS, MARKETS OR OTHER BUILDINGS, RESIDENTIAL AND COMMERC IAL OR CONVENIENCES, DRAINAGE FACILITY ELECTRIC, TELEPHONIC, TELEVISION INSTALLATIONS AND TO DEAL WITH THE SAME IN AN MANNER WHATSOEVER AND BY ADVANCING MONEY TO AND ENTERING I NTO CONTRACTS AND ARRANGEMENTS OF ALL KINDS WITH BUILDERS, TENANTS AND OTHERS. TO CONSTRU CT, ERECT, BUILD, LET OUT, REPAIR, RE-MODEL, DEMOLISH, DEVELOP, IMPROVE, GRADES, CURVE, PAVE, MA CADAMIZE, CEMENT AND MAINTAIN BUILDINGS, STRUCTURE, HI-TECH PARKS, HOUSES, APARTM ENTS & HOSPITALS. FURTHER, THE RENTAL INCOME EARNED BY THE ASSESSEE I S THE ONLY SOURCE OF ITS INCOME AS EVIDENT FROM THE FINANCIAL STATEMENTS OF THE IMPUGNED AY PLACED ON RECORD. THE HONBLE SUPREME COURT IN THE CITED CASE OF CHENNAI PROPERTIES & INVESTMENTS LIMITED (SUPRA) HAVE HELD THAT IF THE MAIN OBJECTIVE OF THE ASSESSEE WAS TO MAKE EARNING BY LEASING OF LUVISH INFOTECH PROJECTS PRIVATE LIMITED 8 PROPERTY AND THE LEASING WAS THE MAIN SOURCE OF INC OME, THEN LEASE INCOME EARNED BY THE ASSESSEE SHALL BE TAXED UNDER THE HEAD BUSINESS AND PROFESSION . THE CONCLUDING PORTION FROM THE CITED JUDGMENT IS EXTRACTED BELOW:- WE ARE CONSCIOUS OF THE AFORESAID DICTA LAID DOWN I N THE CONSTITUTION BENCH JUDGMENT. IT IS FOR THIS REASON, WE HAVE, AT THE BE GINNING OF THIS JUDGMENT, STATED THE CIRCUMSTANCES OF THE PRESENT CASE FROM WHICH WE ARR IVE AT IRRESISTIBLE CONCLUSION THAT IN THIS CASE, LETTING OF THE PROPERTIES IS IN FACT IS THE BUSINESS OF THE ASSESSEE. THE ASSESSEE THEREFORE, RIGHTLY DISCLOSED THE INCOM E UNDER THE HEAD INCOME FROM BUSINESS. IT CANNOT BE TREATED AS 'INCOME FROM THE HOUSE PROPERTY'. WE, ACCORDINGLY, ALLOW THIS APPEAL AND SET ASIDE THE JU DGMENT OF THE HIGH COURT AND RESTORE THAT OF THE INCOME TAX APPELLATE TRIBUNAL. NO ORDERS AS TO COSTS. WE FIND THAT THE FACTS OF THE PRESENT CASE ARE IDEN TICAL IN NATURE SINCE THE MAIN OBJECTIVE OF THE ASSESSEE COMPANY WAS TO D EAL IN REAL ESTATE OF VARIED NATURE AND THE RENTAL INCOME WAS THE MAIN SO URCE OF INCOME FOR THE ASSESSEE. OUR VIEW IS FURTHER FORTIFIED BY THE CITED CBDT CIRCULAR NO. 16/2017 AND JUDGMENT OF THIS TRIBUNAL RENDERED IN T HE CASE OF ASSESSEES SISTER CONCERN UNDER IDENTICAL SITUATION . EVEN OTHERWISE, THE REVENUE HAS ACCEPTED THE STAND OF ASSESSEE IN SEVER AL OTHER YEARS AND RULE OF CONSISTENCY DEMANDS THAT SIMILAR STAND BE T AKEN UNDER IDENTICAL CIRCUMSTANCES. THEREFORE, WE CONCLUDE THAT RENTAL I NCOME EARNED BY THE ASSESSEE WAS CHARGEABLE UNDER THE HEAD BUSINESS INCOME ONLY AS AGAINST INCOME FROM HOUSE PROPERTY TAKEN BY LOWER AUTHORITIES. RESULTANTLY, THIS GROUND OF ASSESSEES APPEAL SUCCE EDS. 6. THE ASSESSEE, IN OTHER GROUNDS, IS AGGRIEVED BY DISALLOWANCE OF VARIOUS EXPENDITURE VIZ. DEPRECIATION, BUSINESS EXP ENSES, INTEREST EXPENSES ETC. THESE WERE DISALLOWED BY THE LOWER AU THORITIES SINCE THE RENTAL INCOME EARNED BY THE ASSESSEE, AS PER THEIR OPINION, WAS CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY AGAINST WHICH LUVISH INFOTECH PROJECTS PRIVATE LIMITED 9 THE ASSESSEE WAS ELIGIBLE FOR FIXED STATUTORY DEDUC TION OF 30%. SINCE, WE HAVE ALREADY ALLOWED ASSESSEES APPEAL QUA HEAD UNDER WHICH RENTAL INCOME WOULD BE ASSESSABLE, WE DEEM IT FIT TO RESTO RE THE MATTER OF ALLOWANCE OF VARIOUS EXPENDITURE TO THE FILE OF JUR ISDICTIONAL ASSESSING OFFICER WITH A DIRECTION TO RE-APPRECIATE THE SAME AND VERIFY THEIR ALLOWABILITY AS PER LAW. THE ASSESSEE, IN TURN, IS DIRECTED TO SUBSTANTIATE THE SAME FORTHWITH FAILING WHICH LD. AO SHALL BE AT LIBERTY TO DISPOSE-OFF THE SAME ON THE BASIS OF MATERIAL AVAILABLE ON RECO RD. RESULTANTLY, ALL OTHER GROUNDS STANDS ALLOWED FOR STATISTICAL PURPOS ES. FINALLY, THE ASSESSEES APPEAL STANDS PARTLY ALLOWED. 7. NOW, WE TAKE UP ASSESSEES APPEALS ITA NOS.724/H YD/2010 FOR AY 2006-07 & ITA NO. 308/HYD/2012 FOR AY 2008-09. THE ASSESSEE, IN BOTH THESE APPEALS IS SIMILARLY AGGRIEVED AND HAVE RAISED IDENTICAL WORDED GROUNDS OF APPEAL. WE FIND THAT THE ISSUES INVOLVE D ARE IDENTICAL EXCEPT FOR FIGURES AND MINOR VARIATIONS ETC. THEREF ORE, THERE BEING NO CHANGE IN FACTS OR CIRCUMSTANCES, OUR OBSERVATION, DECISION AND CONCLUSION MUTATIS MUTANDIS APPLY TO THE SAME. ACCORDINGLY, WE HOLD THAT THE RENTAL INCOME EARNED BY ASSESSEE IN BOTH T HESE YEARS SHALL BE CHARGEABLE UNDER THE HEAD BUSINESS INCOME WHEREAS THE ISSUE OF ALLOWANCE OF VARIOUS EXPENSES IS RESTORED BACK TO T HE FILE OF JURISDICTIONAL AO FOR RE-ADJUDICATION WITH SIMILAR DIRECTION. RESU LTANTLY, BOTH THESE APPEALS STANDS PARTLY ALLOWED. 8. THE SOLITARY ISSUE INVOLVED IN ASSESSEES APPEAL ITA NO. 1992/MUM/2013 FOR AY 2009-10 IS DISALLOWANCE OF INT EREST EXPENDITURE ON LOANS ADVANCED TO SISTER CONCERNS SINCE LD. CIT( A), IN THIS YEAR, HAS GRANTED PARTIAL RELIEF TO THE ASSESSEE BY HOLDING T HAT RENTAL INCOME WAS LUVISH INFOTECH PROJECTS PRIVATE LIMITED 10 ASSESSABLE UNDER THE HEAD BUSINESS INCOME . SINCE, WE HAVE ALREADY RESTORED THE IDENTICAL ISSUE IN EARLIER YEARS TO TH E FILE OF LD. AO, TAKING THE SAME STAND, THIS ISSUE IS ALSO REMITTED BACK TO THE FILE OF LD. AO WITH SIMILAR DIRECTIONS. RESULTANTLY, THE ASSESSEES APP EAL STANDS ALLOWED FOR STATISTICAL PURPOSES. 9. NOW, WE TAKE UP ASSESSEES APPEAL ITA NOS. 1133/ HYD/2010 & ITA NO. 1010/HYD/2009 FOR AY 2004-05. IN THIS YEAR, THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) ON 30/11/2006 A T LOSS OF RS.25,81,745/- BY ASSESSING RENTAL INCOME UNDER THE HEAD BUSINESS INCOME. SUBSEQUENTLY, LD. CIT BY INVOKING REVISIONAL JURISD ICTION U/S 263 ON 25/04/2008 DIRECTED LD. AO TREAT THE SAME AS INCOME FROM HOUSE PROPERTY WITH FURTHER DIRECTIONS TO VERIFY THE LOANS TAKEN B Y THE ASSESSEE & ALSO VERIFY ALLOWABILITY OF EXPENDITURE CLAIMED B Y THE ASSESSEE. THE LD. AO, IN THE CONSEQUENTIAL ASSESSMENT, RE-COMPUTED THE INCOME OF THE ASSESSEE AT RS.49,46,570/-. THE ASSESSEE, IN IT A NO. 1010/HYD/2009 HAS CONTESTED THE INVOCATION OF REVIS IONAL JURISDICTION U/S 263 AND IN ITA NO. 1133/HYD/2010 HAS CONTESTED THE CONSEQUENTIAL ASSESSMENT ORDER. THEREFORE, THE ISSUES BEING IDENT ICAL, WE ALLOW ASSESSEES GROUND OF APPEAL QUA TREATING RENTAL INCOME AS BUSINESS INCOME AND RESTORE THE ISSUE OF ADMISSIBILITY OF EXPENSES TO THE FILE OF LD. AO WITH SIMILAR DIRECTIONS. RESULTANTLY, THE AS SESSEES APPEAL ITA NO. 1133/HYD/2010 STANDS PARTLY ALLOWED WHEREAS ITA NO. 1010/HYD/2009 STANDS DISMISSED, BEING INFRUCTUOUS. 10. NOW, WE TAKE UP REVENUES APPEAL ITA NO. 897/HY D/2010 FOR AY 2006-07 WHERE THE REVENUE IS AGGRIEVED BY CERTAIN R ELIEF PROVIDED TO THE ASSESSEE BY LD. CIT(A) QUA INTEREST EXPENDITURE. SINCE IN ASSESSEES LUVISH INFOTECH PROJECTS PRIVATE LIMITED 11 APPEAL, WE HAVE ALREADY RESTORED THE ISSUE OF ALLOW ANCE OF EXPENDITURE TO THE FILE OF LD. AO FOR RE-ADJUDICATION, THE REVE NUES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES. 11. IN REVENUES APPEAL ITA NOS. 2745/MUM/2013 & 27 48/MUM/2013 FOR AYS. 2007-08 & 2009-10, IDENTICAL WORDED GROUND S HAS BEEN RAISED. THE REVENUE IS AGGRIEVED BY THE STAND OF LD. CIT(A) THAT CERTAIN INTEREST INCOME EARNED BY THE ASSESSEE ON ADVANCES AND FDRS WAS ASSESSABLE UNDER THE HEAD BUSINESS INCOME AS AGAINST INCOME FROM OTHER SOURCES TAKEN BY LD. AO. SINCE, WE HAVE RESTORED THE ISSUE OF INTEREST IN ALL OTHER APPEALS TO THE FILE OF LD. AO, THE SAME IS AL SO RESTORED BACK TO THE FILE OF LD. AO TO RE-ADJUDICATE THE SAME IN THE LIG HT OF OUR DECISION IN THIS APPEAL . RESULTANTLY BOTH THESE APPEALS STANDS ALLOWED FOR S TATISTICAL PURPOSES. 12. AS A LOGICAL CONSEQUENCE, LD. AO IS DIRECTED TO RE-COMPUTE THE BOOK PROFITS U/S 115JB AND CARRY FORWARD OF LOSSES ETC., IF REQUIRED. 13. ALL THE APPEALS STANDS DISPOSED-OFF IN TERMS OF ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH OCTOBER, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 04.10.2017 SR.PS:- THIRUMALESH LUVISH INFOTECH PROJECTS PRIVATE LIMITED 12 ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. ! / THE RESPONDENT 3. , ( ) / THE CIT(A) 4. , / CIT CONCERNED 5. '. , . , / DR, ITAT, MUMBAI 6. / / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI
