ITO, New Delhi V. M/s Neminath Industries Pvt. Ltd., New Delhi

ITA 3340/DEL/2011

• Counselvise Citation: 334020114 RSA 2011
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 01-05-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 24-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Business income
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI K.D. RANJAN ITA NO. 3340/DEL/11 A.YR. 2008-09 INCOME-TAX OFFICER, VS. M/S NEMINATH INDUSTRIES ( P) LTD., WARD-13(2), NEW DELHI. 1-G, IST FLOOR, BHARAT NAGA R, NEW FRIENDS COLONY, DELHI-110065. PAN: AAACR 3132K ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SH. R.S. NEGI SR. DR RESPONDENT BY : SHRI RAKESH GUPTA FCA O R D E R PER R.P. TOLANI, J.M: : THIS IS REVENUES APPEAL AGAINST CIT(A)S ORDER DA TED 24-2-2011, , RELATING TO A.YR. 2008-09. 2. THE ASSESSEE HAS RAISED AS MANY AS 5 GROUNDS OF APPEAL. HOWEVER, SOLE EFFECTIVE GROUND, IS AS UNDER: THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW THE LD. CIT(A) HA ERRED IN DELETING THE ADDITION OF RS . 15.80 LAKH WHICH WAS CLAIMED BY THE ASSESSEE AS DEDUCTION U/S 24(A) OF THE ACT. LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE IS ONLY A SUB LICENSEE TO THE PREMISE AND NOT THE OWNER OF IT AND HENCE THEREBY DISQUALIFIED IN THE FIRST I NSTANCE OF 2 PROVISIONS OF SECTION 22 FOR CLAIMING THE DEDUCTION U/S 24(A) OF THE INCOME TAX ACT. 3. LEARNED COUNSEL FOR THE ASSESSEE AT THE OUT SET CONTENDS THAT THE ISSUE IN QUESTION IS SQUARELY COVERED IN FAVOUR OF THE AS SESSEE BY ITAT JUDGMENT IN ASSESSEES OWN CASE FOR A.Y. 2007-08 ( ITA NO. 2 957/DEL/2011 DATED 10- 1-2012), DISMISSING REVENUES APPEAL BY UPHOLDING T HE ORDER OF CIT(A), AS UNDER: 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS A ND GONE THROUGH THE RECORD CAREFULLY. THERE IS NO DISPARITY ON FACTS. THE OBSERVATIONS OF THE ITAT IN ASSESSMENT YEAR 2006-0 7 READ AS UNDER: 6. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. BOTH THE COUNSELS FAIRLY AGREED THAT THE I SSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 2795 FOR PRECEDING ASSESSMENT YEAR. VIDE ORDER DATED 4.9.200 9 THE TRIBUNAL HAD ADJUDICATED THE ISSUE AS UNDER:- 6. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. WE FIND THAT IT IS AN ADMITTED FACT OF THE CASE THAT THE ASSESSEE HAS OBTAINED OFFICE PREMISES ON LEASE AND SUB-LET THE SAME AND DERIVED INCOME THEREFROM. IN THEE VIEW OF THE AUTHORITIES BELOW, IN ORDER TO DERIVE INCOME FROM HOUSE PROPERTY, THE ASSESSEE HAS TO BE REGISTERED OWNER THEREOF. IN OUR OPINION THIS VIEW IS NOT SUSTAINABLE ON THE ANVIL OF APEX COURT DECISION DELIVERED IN THE CASE OF CIT VS. PODDAR CEMENT PVT. LTD. IN 226 ITR 625. FURTHER THE CONTENTION THAT LETTING OUT OF OFFICE SPACED WHEN NOT REQUIRED CAN BE THE BUSINESS INCOME IS NOT SUSTAINABLE ON THE ANVIL OF DECISION OF THE HONBLE 3 JURISDICTIONAL HIGH COURT IN THE CASE OF SMARTS (P) LTD. VS. CIT (2008) 166 TAXMAN 53 (DELHI). IN THIS CASE IT WAS HELD THAT WHERE THE ASSESSEE IN OCCUPATION OF RENTED PREMISES SUB-LET A PORTION THEREOF AND CLAIMED THAT INCOME FROM SUCH SUB-LETTING WAS ASSESSABLE AS BUSINESS INCOME, THE DEPARTMENT WAS JUSTIFIED IN ASSESSING THE SAID INCOME UNDER INCOME FROM HOUSE PROPERTY, IN VIEW OF THE FACT THAT THE ASSESSEE WAS IN FULL CONTROL IN HIS CAPACITY AS A TENANT, AND HAD EARNED INCOME BY SUB- LETTING OF THE PROPERTY. IN SITUATIONS OF THIS TYPE, THERE IS NOTHING TO SUGGEST THAT OWNERSHIP OF THE PREMISES IS ESSENTIAL FOR LEVYING TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 6.1. ADHERING TO THE DOCTRINE OF THE STARE DECISES, WE UPHOLD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IN THIS REGARD. 6. LEARNED CIT(APPEALS) HAS FOLLOWED THE ORDER O F THE ITAT IN ASSESSMENT YEAR 20-05-06. LEARNED DR WAS UN ABLE TO POINT OUT ANY DISTINGUISHING FEATURE IN THIS ASSESS MENT YEAR WHICH CAN PURSUED US TO TAKE A DIFFERENT OPINION, T HEREFORE, RESPECTFULLY FOLLOWING THE ORDERS OF THE ITAT IN EA RLIER YEARS, WE DO NOT FIND ANY MERIT IN THIS APPEAL. IT IS DISM ISSED. 4. LD. DR IS HEARD. 5. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE RELEVANT MATERIAL AVAILABLE ON RECORD. IN A.Y. 2007-08 (SUPR A) THE ITAT HAS UPHELD ASSESSEES CLAIM BY FOLLOWING EARLIER ORDERS OF THE ITAT IN ASSESSEES OWN CASE FOR A.Y. 2005-06 & 2006-07. NO DISTINCTION IN FACTS AND CIRCUMSTANCE 4 OF CASE FOR THE ASSESSMENT YEAR IN QUESTION HAS BE EN POINTED OUT BY THE PARTIES. THE ORDER OF CIT(A) ON THE ISSUE IN QUEST ION BEING IN CONSONANCE WITH EARLIER ORDERS OF THE ITAT WE SEE NO REASON TO DEVIATE FROM THE SAME. ACCORDINGLY, ORDER OF CIT(A) ON THE ISSUE IN QUEST ION IS UPHELD. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 13-07-2012. SD/- SD/- ( K.D. RANJAN ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13-07-2012. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR