Noor Resorts Private Limited, Kullu V. Pr.CIT, Shimla

ITA 309/CHANDI/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3979 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-10-2021
• Assessment Year: 2015-2016
• Appeal Filed On: 04-08-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP DAHIYA
• Assessee Lawyers: MOHIT GUGLANI
• Keywords: Business income; Depreciation; Business expenditure; Rule of consistency
• Section: 263; 143(3); 142(1); 22

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH A, CHANDIGARH (VIRTUAL COURT) .., !' .. , # $% BEFORE: SHRI. N.K.SAINI, VP & SHRI , R.L. NEGI, JM ITA NO. 309/CHD/2020 ASSESSMENT YEAR : 2015-16 NOOR RESORTS PRIVATE LIMITED SHRI DHARAM SINGH MOHI, MOHI FARM NOOR RESORTS PRIVATE LIMITED, THE RIVER SIDE, PARGANOO, BHUNTER KULLU- 175125, HIMACHAL PRADESH THE PR. CIT INCOME TAX OFFICER 2 ND FLOOR, RAILWAY BOARD BUILDING, SHIMLA-171003 HIMACHAL PRADESH PAN NO: AAACN6151G APPELLANT RESPONDENT !' ASSESSEE BY : SHRI MOHIT GUGLANI, CA #!' REVENUE BY : SHRI SANDEEP DAHIYA, CIT $ %! & DATE OF HEARING : 06/10/2021 '()*! & DATE OF PRONOUNCEMENT : 06/10/2021 $&/ ORDER PER N.K. SAINI, VICE PRESIDENT THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DT. 19/03/2020 OF LD. PR. CIT, SHIMLA PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT). 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEA L: 1. THE LEARNED PR. COMMISSIONER OF INCOME TAX HAS E RRED BY TREATING THE INCOME OF APPELLANT COMPANY UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' & NOT UNDER THE HEAD 'INCOME FROM BUSINESS & PROFESSI ON'. THE LEARNED PR. COMMISSIONER OF INCOME TAX HAS FAILED TO APPRECIATE THAT THE COMPANY'S PROFESSED OBJECTIVE IS TO DERIVE TRADING/ MAJOR INC OME FROM LETTING OUT OF PROPERTIES IRRESPECTIVE OF THE NATURE OF THE PROPER TY. THE RELIANCE HAS BEEN PLACED ON THE JUDGMENTS IN CASE OF RAYALA CORPORATI ON PVT. LTD VS. ACIT (SUPREME COURT) AUGUST 2016 & CHENNAI PROPERTIES & INVESTMENTS LTD VS. CIT (SUPREME COURT) APRIL 2015. 2. THE LEARNED PR. COMMISSIONER OF INCOME TAX HAS E RRED BY TREATING THAT THE APPELLANT COMPANY HAS NOT CARRIED OUT ANY BUSINESS ACTIVITY DURING THE YEAR. THE RELIANCE HAS BEEN PLACED ON THE JUDGMENT OF CHINUBH AI M PATEL VS INCOME TAX OFFICER (ITAT AHMEDABAD) DECEMBER 2015; WHERE THE BU SINESS ACTIVITIES NOT BEING CARRIED OUT DURING THE YEAR PER SE; CANNOT EV EN LEAD TO THE CONCLUSION THAT 2 THE BUSINESS WAS DISCONTINUED OR NON-CONTINUATION O F BUSINESS IS NOT A CRITERIA TO DECIDE HEADS OF INCOME OR ANY DISALLOWANCE OF EXPEN SES. 3. THE APPELLANT CRAVES LEAVE TO AMEND, ALTER, MODI FY, SUBSTITUTE, ADD TO, ABRIDGE AND/ OR RESCIND ANY OR ALL OF THE ABOVE GRO UNDS. 3. DURING THE COURSE OF HEARING LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT AN IDENTICAL ISSUE HAVING SIMILA R FACTS HAS ALREADY BEEN ADJUDICATED BY THIS BENCH OF THE ITAT IN ASSESSEES OWN CASE IN ITA NO. 860/CHD/2019 FOR THE A.Y. 2014-15 VIDE ORDER DT. 11 /11/2020 AND THEREAFTER VIDE ORDER DT. 05/05/2021 IN M.A. NO. 04/CHD/2021. IT WA S FURTHER STATED THAT SINCE THE FACTS ARE IDENTICAL FOR BOTH THE YEARS, THEREFORE, THE SAME COURSE MAY BE ADOPTED FOR THIS YEAR ALSO. THE LD. COUNSEL FOR THE ASSESSEE FURNISHED THE COPIES OF THE AFORESAID REFERRED TO ORDER PASSED BY THE IT AT CHANDIGARH B BENCH IN ASSESSEES OWN CASE FOR THE A.Y. 2014-15. 4. IN HIS RIVAL SUBMISSIONS THE LD. CIT DR ALTHOUGH SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. PR. CIT BUT COULD NOT CONTR OVERT THE AFORESAID CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS NOTICED THAT AN IDENTICAL ISSUE HAVING SIMILAR FACTS WAS A SUBJECT MATTER OF ADJUDICATION BEFORE THIS BENCH OF ITAT IN ASSESSEES OWN CASE FOR THE A.Y. 2014-15 IN ITA NO. 860/CHD/2019 WHICH HAS BEEN ADJUDICATED VIDE ORDER DT. 11/11/2020 AND THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARA 8 TO 8.11 WHICH READ AS UNDER: 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CA SE THE A.O. FRAMED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT, QUESTIO NNAIRE ALONGWITH NOTICE UNDER SECTION 142(1) OF THE ACT WAS ISSUED TO THE ASSESSE E ON 09/08/2016, IN COMPLIANCE THERETO THE ASSESSEE FURNISHED THE REQUISITE REPLIE S AND DOCUMENTS. HOWEVER THE LD. PR. CIT EXERCISED HIS REVISIONARY POWERS UNDER SECTION 263 OF THE ACT AND CONSIDERED THE ASSESSMENT ORDER PASSED BY THE A.O. A S ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE FOR THE REASONS THAT THE ASSESSEE WAS HAVING ONLY RENTAL INCOME WHICH WAS TO BE CONSIDERED AS INCOME FROM HOUSE PROPERTY AND NOT AS BUSINESS INCOME. SECONDLY THERE WAS NO BUSIN ESS ACTIVITY THEREFORE EXPENSES AND THE DEPRECIATION WAS WRONGLY ALLOWED B Y THE A.O. NOW WE HAVE 3 TO CONSIDER AS TO WHETHER THE VIEW TAKEN BY THE A.O. WAS A POSSIBLE VIEW IN ACCORDANCE WITH LAW OR NOT. THE POWERS OF THE LD. P R. CIT UNDER SECTION 263 OF THE ACT AND CONDITIONS TO INVOKE THE SAME MAY BE SUMMAR IZED AS UNDER: (I) 'THE CIT MUST RECORD SATISFACTION THAT THE ORDER OF THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. BOTH T HE CONDITIONS MUST BE FULFILLED. (II) SEC. 263 CANNOT BE INVOKED TO CORRECT EACH AND EVER Y TYPE OF MISTAKE OR ERROR COMMITTED BY THE A.O. AND IT IS ONLY WHEN AN O RDER IS ERRONEOUS, THE SECTION WILL BE ATTRACTED. (III) AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT AP PLICATION OF LAW WILL SUFFICE FOR THE REQUIREMENT OF THE ORDER BEING ERRO NEOUS. (IV) IF THE ORDER IS PASSED WITHOUT APPLICATION OF MIND, SUCH ORDER WILL FALL UNDER THE CATEGORY OF ERRONEOUS ORDER. (V) EVERY LOSS OF REVENUE CANNOT BE TREATED AS PREJUDIC IAL TO THE INTEREST OF THE REVENUE AND IF THE AO HAS ADOPTED ONE OF THE CO URSES PERMISSIBLE UNDER LAW OR WHERE TWO VIEWS ARE POSSIBLE AND THE A O HAS TAKEN ONE VIEW-WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER, UNLESS THE VIEW TAKEN BY THE AO IS UNSUSTAINABLE UNDER THE LAW. (VI) IF WHILE MAKING THE ASSESSMENT, THE A.O. EXAMINES TH E ACCOUNTS, MAKES ENQUIRIES, APPLIES HIS MIND TO THE FACTS AND CIRCUM STANCES OF THE CASE AND DETERMINES THE INCOME, THE CIT, WHILE EXERCISING HI S POWER UNDER S. 263, IS NOT PERMITTED TO SUBSTITUTE HIS ESTIMATE OF INCOME IN P LACE OF THE INCOME ESTIMATED BY THE A.O. (VII) THE AO EXERCISES QUASI-JUDICIAL POWER VESTED IN HIM AND IF HE EXERCISES SUCH POWER IN ACCORDANCE WITH LAW AND ARRIVES AT A CONCLUSION, SUCH CONCLUSION CANNOT BE TERMED TO BE ERRONEOUS SIMPLY BECAUSE THE CIT DOES NOT FEEL SATISFIED WITH THE SAID CONCLUSION. (VII) THE CIT, BEFORE EXERCISING HIS JURISDICTION UNDER S . 263, MUST HAVE MATERIAL ON RECORD TO ARRIVE AT A SATISFACTION. (IX) IF THE AO HAS MADE ENQUIRIES DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON THE RELEVANT ISSUES AND THE ASSESSEE HAS GIVEN DETAILED EXPLANATION BY A LETTER IN WRITING AND THE AO ALLOWE D THE CLAIM ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE, THE DECISION OF THE AO CANNOT BE HELD TO BE ERRONEOUS SIMPLY BECAUSE IN HIS ORDER HE DOES NO T MAKE AN ELABORATE DISCUSSION IN THAT REGARD.' 8.1 IN THE PRESENT CASE, THE A.O. DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS, ISSUED THE QUESTIONNAIRE TO THE ASSESS EE, IN RESPONSE TO WHICH THE ASSESSEE FURNISHED THE REPLY AND THE DOCUMENTS WHIC H WERE CONSIDERED BY THE A.O. SO IT CANNOT BE SAID THAT THE ENQUIRIES WERE NO T MADE BY THE A.O. THE RENTAL INCOME SHOWN BY THE ASSESSEE WAS CONSIDERED TO BE BUSINESS INCOME AS WAS DONE IN THE PRECEDING YEARS SINCE INCEPTION OF THE BUSINESS BY THE ASSESSEE. 4 HOWEVER, THE LD. PR. CIT WAS OF THE VIEW THAT THE S AID VIEW WAS NOT CORRECT AS THE LETTING OUT OF THE SHOP FROM WHICH THE RENT WAS REC EIVED WAS NOT THE MAIN OBJECT OF THE ASSESSEE. 8.2 TO RESOLVE THIS CONTROVERSY WE HAVE TO CONSIDER ED THE OBJECT AND ANCILLARY OBJECT AS MENTIONED IN THE MEMORANDUM OF ASSOCIATIO N AND ARTICLE OF ASSOCIATION OF THE ASSESSEE COMPANY COPY OF WHICH I S PLACED AT PAGE NO. 22 TO 41 OF THE ASSESSEES COMPILATION. THE CLAUSE 3 OF T HE SAID MOA READ AS UNDER: 3. TO CARRY ON THE BUSINESS OF REAL ESTATE DEALER S AND DEVELOPERS INCLUDING PURCHASE AND SALE OF LAND, LAND DEVELOPMENT, COLONI ZATION, PURCHASE, SALE, CONSTRUCTION AND LETTING OUT OF HOUSES, FLATS, FARM HOUSES. THE LD. PR. CIT CONSIDERED THE ABOVE SAID CLAUSE ON LY. HOWEVER HE IGNORED THE ANCILLARY CLAUSE NO. 19 WHICH READ AS UNDER: 19. TO SELL, IMPROVE, ALTER, MANAGE, DEVELOP EXCH ANGE, LEASE, MORTGAGE, DISPOSE OF, TURN TO ACCOUNT OR OTHERWISE DEAL WITH ALL OR ANY PARTS OF THIS BUSINESS, LANDS, PROPERTY, ASSETS, RIGHTS AND THE RESOURCES A ND UNDERTAKINGS OF THE COMPANY IN WHOLE OR IN PART IN SUCH MANNER AND ON S UCH TERMS AS THE DIRECTORS MAY THINK FIT. FROM THE AFORESAID CLAUSE IT IS CLEAR THAT THE ASSE SSEE COMPANY WAS AUTHORIZED TO LEASE OUT THE PROPERTY WHICH IN THE PRESENT CASE HA S BEEN DONE IN RESPECT OF FIRST FLOOR & SECOND FLOOR SCO NO. 126 & 127, SECTOR - 8C CHANDIGARH. THE SAID ACTIVITY OF LEASING OUT WAS UNDERTAKEN BY THE ASSES SEE COMPANY FROM THE VERY BEGINNING WHEN THOSE ASSETS WERE PURCHASED, SO IT C ANNOT BE SAID THAT THIS ACTIVITY WAS ONLY FOR THE YEAR UNDER CONSIDERATION. IT IS NOT IN DISPUTE THAT IN ALL THE EARLIER YEARS THE INCOME RECEIVED FROM THOSE LEASE OUT PROPERTIES WAS CONSIDERED AS BUSINESS INCOME, AS THE CLAUSE NO. 19 OF THE M OA AUTHORIZED ASSESSEE TO LEASE OUT ITS PROPERTY WHICH WAS ITS ANCIALLARY ACT IVITY. 8.3 ON A SIMILAR ISSUE THE HON'BLE SUPREME COURT IN THE CASE OF CHENNAI PROPERTIES AND INVESTMENTS LTD. VS. CIT (SUPRA) HEL D AS UNDER: THAT LETTING OF THE PROPERTIES WAS IN FACT THE BU SINESS OF THE ASSESSEE. THE ASSESSEE, THEREFORE, RIGHTLY DISCLOSED THE INCOME U NDER THE HEAD INCOME FROM BUSINESS. IT COULD NOT BE TREATED AS INCOME FROM HOUSE PROPERTY. IN THE PRESENT CASE ALSO THE MAIN OBJECT OF THE ASS ESSEE IN ITS MOA WAS TO CARRY ON THE BUSINESS OF REAL ESTATE DEALERS & DEVELOPERS INCLUDING PURCHASE & SALE OF LAND, LAND DEVELOPMENT, COLONIZATION, OPURCHASE, SA LE CONSTRUCTION & LETTING OUT OF HOUSES, FLATS, FARM HOUSES. HOWEVER AS PER CLAUS E 19 OF THE AFORESAID MOA THE ASSESSEE WAS AUTHORIZED TO SELL, IMPROVE, ALTER, MA NAGE, DEVELOP EXCHANGE, LEASE, MORTGAGE, DISPOSE OF ETC OF THE BUSINESS LAN DS, PROPERTY, ASSETS ETC IN WHOLE OR IN PART IN SUCH MANNER AND ON SUCH TERMS A S THE DIRECTORS MAY THINK FIT. THEREFORE THE INCOME OF THE ASSESSEE RECEIVED ON LE ASE OUT PROPERTY WAS ITS BUSINESS INCOME. 8.4 ON A SIMILAR ISSUE THE HON'BLE SUPREME COURT IN THE CASE OF RAYALA CORPORATION PVT. LTD. VS. ACIT(SUPRA) HELD AS UNDE R: THAT ADMITTEDLY, THE ASSESSEE HAD ONLY ONE BUSINE SS AND THAT WAS OF LEASING ITS PROPERTY AND EARNING RENT THEREFROM. THE BUSINESS O F THE COMPANY WAS TO LEASE ITS PROPERTY AND TO EARN RENT AND THEREFORE, THE IN COME SO EARNED SHOULD BE 5 TREATED AS ITS BUSINESS INCOME. THE INCOME OF THE A SSESSEE WAS TO BE SUBJECT TO TAX UNDER THE HEAD PROFITS AND GAINS OF BUSINESS O R PROFESSION. 8.5 SIMILARLY THE ITAT, MUMBAI J BENCH IN THE CA SE OF SHIBANI S. BHOJWANI VS. DCIT(SUPRA) HELD AS UNDER: INCOME FROM COMPOSITE LETTING OF FURNISHED FLATS B Y THE ASSESSEE, AFTER THOROUGH VETTING AND SCRUTINY, HAVING BEEN ACCEPTED AND ASSE SSED AS BUSINESS INCOME BY THE DEPARTMENT IN THE EARLIER YEARS WHILE FRAMIN G REGULAR ASSESSMENTS, IN THE ABSENCE OF ANY NEW FACTS EMERGING DURING THE YEAR U NDER CONSIDERATION, SUCH INCOME CANNOT BE ASSESSED UNDER THE HEAD INCOME FR OM HOUSE PROPERTY; COMPOSITE RENTAL RECEIPTS ARE ASSESSABLE AS BUSINES S INCOME IN THE RELEVANT ASSESSMENT YEAR ALSO IN VIEW OF RULE OF CONSISTENCY . 8.6 THEREFORE BY KEEPING IN VIEW THE RATIO LAID DOW N IN THE AFORESAID REFERRED TO CASES WE ARE OF THE OPINION THAT THE VIEW TAKEN BY THE A.O. WAS IN CONSONANCE WITH THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT AND VIEW TAKEN BY THE ITAT IN THE AFORESAID REFERRED TO CASE . IN THAT VIEW OF THE MATTER, IT CANNOT BE SAID THAT THE VIEW TAKEN BY THE A.O. WAS W RONG AND IF THE VIEW TAKEN BY THE A.O. WAS ONE OF THE POSSIBLE VIEW THE ASSESSM ENT ORDER DATED 16/09/2016 PASSED BY HIM CANNOT BE CONSIDERED TO BE ERRONEOUS. FOR THE AFORESAID VIEW, WE ARE FORTIFIED BY THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. MAX INDIA LTD. [2007] 295 ITR 282 WHEREIN I T HAS BEEN HELD THAT AS UNDER: THE PHRASE PREJUDICIAL TO THE INTEREST OF THE RE VENUE IN SECTION 263 OF THE INCOME-TAX ACT, 1961, HAS TO BE READ IN CONJUNCTION WITH THE EXPRESSION ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER. E VERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CAN NOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FOR EX AMPLE, WHEN THE ASSESSING OFFICER ADOPTS ONE OF TWO COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE AS SESSING OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE REVENUE, UNLESS THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LAW. 8.7 IN THE INSTANT CASE, THE ASSESSEE FURNISHED A C HART BEFORE THE AUTHORITIES BELOW EXPLAINING THAT IF THE INCOME RECEIVED BY IT WAS TO BE TREATED AS INCOME FROM HOUSE PROPERTY INSTEAD OF BUSINESS INCOME T HERE WOULD BE AN INCREASE IN THE LOSS. THE SAID CHART HAD BEEN REPRODUCED IN THE FORMER PART OF THIS ORDER. HOWEVER THE LD. PR. CIT BY CONSIDERING THE WRONG CA LCULATIONS, WAS OF THE VIEW THAT THERE WAS A PROFIT INSTEAD OF LOSS CLAIMED BY THE ASSESSEE, IF THE RENTAL INCOME TO BE CONSIDERED AS INCOME FROM HOUSE PROPE RTY AND NOT AS BUSINESS INCOME WHILE ADOPTING THE SAID CALCULATION, THE PR . CIT DID NOT ALLOW THE DEPRECIATION AND THE OTHER EXPENSES ON THIS BASIS T HAT THE ASSESSEE WAS NOT INVOLVED IN ANY BUSINESS ACTIVITY DURING THE YEAR U NDER CONSIDERATION HE IGNORED THIS EXPLANATION OF THE ASSESSEE THAT THERE WAS LUL L IN BUSINESS, BUT THE BUSINESS ACTIVITY WAS NOT CLOSED AND THE ASSESSEE WAS HAVING STOCK IN TRADE. IT IS WELL SETTLED THAT THERE IS A DIFFERENCE BETWEEN DISCONTI NUATION OF BUSINESS AND THE CLOSURE OF BUSINESS. IN THE PRESENT CASE, IF THERE WAS NO CLOSURE OF THE BUSINESS, THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE WAS NOT ALLOWED TO CLAIM EXPENSES IF THOSE WERE INCURRED FOR THE BUSINESS PURPOSES. 8.8 ON A SIMILAR ISSUE THE HON'BLE KARNATAKA HIGH CO URT IN THE CASE OF K SREEDHARAN & CO. VS. CIT(SUPRA) HELD AS UNDER: 6 I FIND MERIT IN THE CONTENTION RAISED ON BEHALF OF THE PETITIONER AND THE RELIANCE PLACED ON THE ABOVE-MENTIONED DECISIONS. IN THE PRE SENT CASE ALSO, THE ASSESSMENT IS NOT UNIT-WISE BUT ASSESSEE-WISE. ADMI TTEDLY, THE PETITIONER HAD TO PARTICIPATE IN THE AUCTION WHICH WAS CONDUCTED DURI NG THE RELEVANT ASSESSMENT YEAR FOR THE PURPOSE OF CARRYING ON THE BUSINESS FO R THE FOLLOWING YEAR. THE ASSESSEE HAD TO INCUR EXPENSES FOR THE ABOVE PURPOS E. IT IS ADMITTED THAT THE ASSESSEE HAD TAKEN THE LOAN AND HAD TO PAY INTEREST FOR THE PURPOSE OF RAISING MONEY TO PARTICIPATE IN THE AUCTION AND TO ACQUIRE THE LICENCE FOR THE PURPOSE OF CONDUCTING THE BUSINESS OF BUYING AND SELLING ARRAC K DURING THE FOLLOWING YEAR. IT IS ALSO AN ADMITTED FACT THAT, FOR MANY YEARS PREVI OUS TO THE ASSESSMENT YEAR, THE ASSESSEE HAD BEEN CARRYING ON THE SAME BUSINESS. UN DER THESE CIRCUMSTANCES, THE PETITIONER IS PERFECTLY JUSTIFIED IN CONTENDING THAT IT IS ENTITLED TO CLAIM DEDUCTION IN RESPECT OF THE AMOUNT PAID AS INTEREST FOR RAISING THE LOAN DURING THE RELEVANT ASSESSMENT YEAR 8.9 IN THE PRESENT CASE ALSO THE ASSESSEE WAS NOT F INDING THE BUYER TO SELL THE PROPERTY WHICH WERE KEPT AS STOCK IN TRADE, SO IT C ANNOT BE SAID THAT THE ASSESSEE CLOSED THE BUSINESS, THEREFORE THE EXPENSES INCURRE D FOR THE PURPOSES OF BUSINESS AS WELL AS THE DEPRECIATION CLAIMED WERE ALLOWABLE TO THE ASSESSEE AS BUSINESS EXPENSES, AS SUCH THE LD. PR. CIT WAS NOT JUSTIFIED IN NOT CONSIDERING THE DEPRECIATION AS WELL AS THE EXPENSES TO WORK OUT TH E INCOME / LOSS OF THE ASSESSEE. 8.10 IN VIEW OF THE AFORESAID DISCUSSION, IN THE PR ESENT CASE, IT CAN BE SAID THAT BY CONSIDERING THE RENTAL INCOME RECEIVED BY THE AS SESSEE AS BUSINESS INCOME WHICH WAS CONSISTENTLY CLAIMED BY THE ASSESSEE IN T HE PRECEDING YEARS ALSO AND THE DEPARTMENT HAD ACCEPTED THE SAME, THE ASSESSMEN T ORDER PASSED BY THE A.O. WAS NOT PREJUDICIAL TO THE INTEREST OF THE REVE NUE, PARTICULARLY WHEN THE LOSS WOULD HAVE BEEN MORE AT RS. 7,70,160.40 INSTEAD OF RS. 3,89,226/- IF THE RENTAL INCOME WAS TO BE CONSIDERED AS INCOME FROM HOUSE P ROPERTY, INSTEAD OF BUSINESS INCOME, AS DECLARED BY THE ASSESSEE. 8.11 WE THEREFORE BY CONSIDERING THE TOTALITY OF TH E FACTS AS DISCUSSED HEREIN ABOVE ARE OF THE VIEW THAT THE ASSESSMENT ORDER PAS SED BY THE A.O. WAS NOT PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN THAT VIEW OF THE MATTER, THE IMPUGNED ORDER PASSED BY THE LD. PR. CIT UNDER SECT ION 263 OF THE ACT IS QUASHED. 5.1 IN THE SAID CASE ONE MISCELLANEOUS APPLICATION WAS ALSO FILED TO RECTIFY THE MISTAKE APPARENT FROM RECORD WHICH WAS DECIDED BY T HIS BENCH OF ITAT VIDE ORDER DT. 05/05/2021 IN M.A. NO. 04/CHD/2021, THE M ISTAKE APPARENT FROM THE RECORD WAS RECTIFIED, THE RELEVANT FINDINGS HAVE BE EN GIVEN IN PARA 5 OF THE SAID ORDER WHICH READ AS UNDER: 5. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTI ES, IT IS NOTICED THAT IN PARA 8.2 AT PAGE 15 IN LINE 2 & 3 OF THE ORDE R DATED 11/11/2020, THE LEASED OUT PROPERTY HAS BEEN MENTIONED AS FIRST FLOO R & SECOND FLOOR SCO NO. 126 & 127, SECTOR-8C CHANDIGARH INSTEAD OF GR OUND FLOOR AND BASEMENT SCO NO. 126 & 127, SECTOR-8C CHANDIGARH, INA DVERTENTLY, DUE 7 TO OVERSIGHT AND TYPOGRAPHICAL MISTAKE. THEREFORE, THE MISTAKE IS RECTIFIED, NOW IN THE ORDER DATED 11/11/2020 IN ITA NO. 860/CHD/201 9 AT PAGE NO. 15 IN LINE 2&3, IT IS TO BE READ AS GROUND FLOOR AND BASEMENT INSTEAD OF FIRST FLOOR & SECOND FLOOR. EXCEPT THIS, THERE IS NO CHANGE IN THE AFORESAID ORDER DATED 11/11/2020 OF THE TRIBUNAL. SINCE THE FACTS FOR THE YEAR UNDER CONSIDERATION AR E IDENTICAL TO THE FACTS INVOLVED IN THE EARLIER A.Y. 2014-15, SO RESPECTFUL LY FOLLOWING THE AFORESAID REFERRED TO ORDERS PASSED IN ITA NO. 860/CHD/2019 A ND MA NO. 04/CHD/2021 DATED 11/11/2020 & 05/05/2021 RESPECTIVELY IN ASSES SEES OWN CASE, THE IMPUGNED ORDER PASSED BY THE LD. PR. CIT IS QUASHED . 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . (ORDER PRONOUNCED IN THE OPEN COURT ON 06/10/2021 ) SD/- SD/- .. .., (R.L. NEGI ) ( N.K. SAIN I) # $%/ JUDICIAL MEMBER / VICE PRESIDENT AG DATE: 06/10/2021 (+! ,-.- COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. $ / CIT 4. $ / 01 THE CIT(A) 5. -2 45&456789 DR, ITAT, CHANDIGARH 6. 8:% GUARD FILE (+ $ BY ORDER, ; # ASSISTANT REGISTRAR