ITO 19(3)(4), MUMBAI V. SHANAYA ENTERPRISES, MUMBAI

ITA 3647/MUM/2010

• Counselvise Citation: 364719914 RSA 2010
• Duration Of Justice: 1 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2005-2006
• Appeal Filed On: 07-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Keywords: Business income
• Section: 10; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI VIJAYAPAL RAO, JUDICIAL MEMBER ITA NO.3647/MUM/2010 ASSESSMENT YEAR: 2005-2006 INCOME TAX OFFICER, 19(3)(4), RN 304, 3 RD FLOOR, PIRAMAL CHAMBERS, LALBAUG, MUMBAI-400012. VS. M/S SHANAYA ENTERPRISES, , SARKAR PLAZA, 57, HILL ROAD, BANDRA (W), MUMBAI-50. PAN: SSBGD8175K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K. SINGH, (DR) RESPONDENT BY : NONE O R D E R PER PRAMOD KUMAR: BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS C ALLED INTO QUESTION CORRECTNESS OF LD. CIT (A)S ORDER DATED 12 TH MARCH, 2010, IN THE MATTER OF ASSESSMENT U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2005-06, ON THE FOLLOWING GROUND: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN DIRECT ING TO TREAT INCOME FROM LETTING OUT OF STUDIO UNDER THE H EAD PROFITS AND GAINS OF BUSINESS OR PROFESSION INSTE AD OF INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY BY NOT RELYING UPON THE DECISION IN THE CARE OF CIT VS. SU LTAN BROTHERS PVT. LTD. REPORTED IN 51 ITR 353. 2. VIDE OUR ORDER OF EVEN DATE, IN ASSESSEES OWN C ASE FOR THE ASSESSMENT YEAR 2006-2007, WE HAVE OBSERVED AS FOLLOWS:- ITA NO. 3647/MUM/2010 A.Y 2005-2006: 2 THE RELEVANT MATERIAL FACTS, SO FAR AS NECESSARY FO R ADJUDICATION ON ISSUE IN DISPUTE BEFORE US, ARE LIKE THIS. THE ASSESSEE IS STATED TO BE CARRYING OUT BUSINESS OF LETTING OUT OF STUDIO F OR PRODUCING TELEVISION SERIALS, ADVERTISEMENT FILMS, SHORT DOCU MENTARIES ETC., IN AS MUCH AS THE PREMISES IS LET OUT, FOR THE SAID PURPO SES, ON HOURLY BASIS FOR A UNIT OF EIGHT HOURS EACH TO PRODUCTION HOUSES. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSE SSING OFFICER NOTED THAT THE ASSESSEE HAS INCOME FROM SUCH HIRE C HARGES RECEIVED AGGREGATING TO RS.28,89,573, BUT, IN VIEW OF CLAIM OF SEVERAL EXPENSES TO EARN THESE RECEIPTS, NET LOSS IS DISCLOSED AT RS . 89,942/-. THE ASSESSING OFFICER FURTHER NOTED THAT ASSESSEE HAS C LAIMED CREDIT FOR TAXES DEDUCTED AT SOURCE, AGGREGATING TO RS. 2,46,6 15, AND, ON MOST OF THE TDS CERTIFICATES, NATURE OF RECEIPT IS SHOWN AS RENT. IT WAS IN THIS BACKDROP THAT THE ASSESSING OFFICER REQUIRED T HE ASSESSEE TO SHOW CAUSE AS TO WHY ALL THE RECEIPTS NOT BE TREATE D AS RENT AND, ACCORDINGLY, BE TAXED UNDER INCOME FROM HOUSE PROP ERTY. IT WAS SUBMITTED BY THE ASSESSEE THAT THE ASSESSEE LETS OUT THE PROPERTY ON HOURLY BASIS FOR USE AS SHOOTING LOCATI ON, BUT IT IS NOT A CASE OF RENTING OUT THE PROPERTY SIMPLICITOR. IT WAS EXPLAINED THAT COMPLEX COMMERCIAL ACTIVITIES ARE INVOLVED IN THIS PROCESS INASMUCH AS EXISTING FURNITURE AND FIXTURES IN THE PREMISES HAVE TO BE MODIFIED TO SUIT THE REQUIREMENTS OF THE CLIENTS, FROM TIME TO TIME, AND TO ACCOMMODATE VARIOUS PROPS, THAT A SEPARATE METER I S PROVIDED FOR RECORDING CONSUMPTION OF ELECTRICITY ON HOURLY BASI S, THAT SECURITY ARRANGEMENTS HAVE TO BE PUT IN PLACE FOR ENSURING S AFETY OF CINEMA PHOTOGRAPHIC EQUIPMENT, THAT TEMPORARY STRUCTURES A ND FRAMEWORKS HAVE TO BE SET UP SO AS TO ENABLE CLIENT TO ERECT T HE NECESSARY PROPS AND SHEDS, THAT THE FACILITIES OF PLUMBERS, ELECTRI CIANS, CARPENTERS AND PAINTERS ETC., HAVE TO BE PROVIDED AS PER CLIENT RE QUIREMENTS, AND THAT CONSIDERABLE MARKETING ACTIVITIES HAVE TO BE UNDERT AKEN TO SELL THE STUDIO TIME TO PROSPECTIVE CLIENTS. THE ASSESSEE A LSO SUBMITTED A LIST OF CLIENTS SO AS TO DEMONSTRATE THAT THE STUDIO FAC ILITIES HAVE BEEN USED BY FILM INDUSTRY, TV INDUSTRY AND GENERALLY ME DIA AND BROADCASTING INDUSTRY. NONE OF THESE SUBMISSIONS, HOWEVER, IMPRESSED THE ASSESSING OFFICER. HE WAS OF THE VIE W THAT, ON THE ABOVE FACTS, ISSUE IS COVERED AGAINST THE ASSESSEE BY HONBLE SUPREME COURTS JUDGMENT IN THE CASE OF CIT VS. SHAMBHU INVESTMENTS LTD . ( 263 ITR 143 ), BECAUSE IF IT IS FOUND THAT MAIN INTENTION IS FOR LETTING OUT THE PROPERTY OR ANY PORTION THEREOF, THE SAME M UST BE CONSIDERED AS RENTAL INCOME OR INCOME FROM PROPERTY . THE ASSESSING OFFICER ALSO NOTED THAT FROM THE FACTS OF THE CASE AND DETAILS SUBMITTED BY THE ASSESSEE, THE SERVICES RENDERED BY THE ASSESSEE, IF ANY, TO VARIOUS OCCUPANTS ACCORDING TO THE LIST OF OCCUPANTS, ARE N OT SEPARATELY CHARGED AND THE RENT PAYABLE IS INCLUSIVE OF ALL CH ARGES TO THE ASSESSEE. THE ASSESSING OFFICER THEN PROCEEDED TO REFER TO HONBLE SUPREME COURTS JUDGMENT IN THE CASE OF SULTAN BROTHERS PVT. LTD. VS. CIT ( 51 ITR 353 ) BY OBSERVING AS FOLLOWS:- ITA NO. 3647/MUM/2010 A.Y 2005-2006: 3 IN THE CASE OF M/S SULTAN BROTHERS PVT. LTD. VS. CI T [1964] 51 ITR 353 (SC), A FIVE JUDGES BENCH OF THE APEX C OURT HEREIN GAVE A GUIDELINE THAT TO COME TO A CONCLUSIO N OF NATURE OF ANY RECEIPTS ATTACHED TO A PROPERTY. THE TEST COMPRISES OF THREE QUESTIONS, NAMELY (A) WAS IT THE INTENTION IN MAKING THE LEASEAND IT MAT ERS NOT WHETHER THERE IS ONE LEASE OR TWO, I.E., SEPARA TE LEASES IN RESPECT OF THE FURNITURE AND BUILDINGTHAT THE T WO SHOULD BE ENJOYED TOGETHER? (B) WAS IT THE INTENTION TO MAKE THE LETTING OF THE TWO PRACTICALLY ONE LETTING? (C) WOULD ONE HAVE BEEN LET ALONE, AND A LEASE OF IT AC CEPTED, WITHOUT THE OTHER? IF THE ANSWERS TO THE FIRST TWO QUESTIONS ARE IN TH E AFFIRMATIVE AND THE LAST IN THE NEGATIVE, THEN IT HAS TO BE HEL D THAT THE LETTINGS WOULD BE INSEPARABLE. IN THE INSTANT CASE, THE ANSWERS OF THE FIRST TWO Q UESTIONS ARE IN AFFIRMATIVE AND THE LAST IN THE NEGATIVE. THE ASSE SSEE WAS CLAIMED THAT THERE WAS SOME INFRASTRUCTURE GIVEN TO THE PARTIES AND THEREFORE THE SAME IS BUSINESS. HOWEVER, IT IS VERY CLEAR FROM THE FACTS OF THE CASE THAT WITHOUT THE SAID FA CILITIES, THE PREMISES WOULD NOT HAVE BEEN LET IN THE FIRST PLACE . THE RATIO LAID DOWN BY THE HONBLE APEX COURT IS TOTALLY APPL ICABLE TO THE FACTS OF THE CASE. AS REGARDS ASSESSEE IN CONTENTION THAT STUDIO BUSIN ESS ACTIVITIES ARE ACTIVITIES IN AN ORGANIZED MANNER, ASSESSING OF FICER SIMPLY BRUSHED THEM ASIDE BY STATING THAT THE CONTENTION IS GENERAL IN NATURE. ON THE CONTENTION THAT ASSESSEE IS RENDERING COMP LEX SERVICES, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE IS COVERED BY THE CALCUTTA HIGH COURT IN THE CASE OF SHAMBHU I NVESTMENTS LTD. VS. CIT (SUPRA) . THE ASSESSING OFFICER THUS PROCEEDED TO TAX REC EIPTS UNDER THE HEAD INCOME FROM HOUSE PROPERTY, AND REST RICTED THE DEDUCTIONS TO 30% OF CHARGES RECEIVED AS FOR REPAI RS. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD . CIT (A) WHO REVERSED THE ACTION OF THE ASSESSING OFFICER BY OBS ERVING AS FOLLOWS:- I HAVE CAREFULLY GONE THROUGH THE RIVAL SUBMISSIONS AND I AM INCLINED TO AGREE WITH THE CONTENTION OF THE ASSESS EE THAT THE INCOME RECEIVED FROM LETTING OUT OF THE BUNGALOW/ST UDIO ISNT INCOME FROM HOUSE PROPERTY AS HELD BY THE AO. IN THE CASE OF SHABVHU INVT. PVT. LTD. VS. CIT, THE PREMISES WHERE LET OUT ON ITA NO. 3647/MUM/2010 A.Y 2005-2006: 4 MONTHLY RENT BASIS FOR PROVIDING TABLE SPACE TO THE OCCUPANTS. IN THAT CASE, ASSESSEE HAS RECEIVED INTEREST-FREE D EPOSIT TO THE EXTENT OF ENTIRE COST OF THE PROPERTY, WHEREAS IN T HE CASE OF THE ASSESSEE IT IS CLAIMED THAT NO DEPOSIT IS RECEIVED BY IT. IN THE CASE OF SHAMBHU INVT. LTD, THEIR LORDSHIPS HELD THA T PROPERTY WAS NOT COMMERCIALLY EXPLOITED AS THE ASSESSEE HAD ALREADY RECEIVED INTEREST FREE DEPOSIT TO THE EXTENT OF COS T OF THE PROPERTY. IN THE CASE OF THE ASSESSEE, THIS IS NOT SO. THE GIVING ON HIRE THE BUNGALOW INTERMITTENTLY FOR A BRIEF PER IOD BASED ON NUMBER OF HOURS WITH FULL FACILITIES FOR THE PURPOS E OF CREATING PANORAMA CONCEPT IS A COMMERCIAL ACTIVITY. THUS TO MY MIND, THE APPELLANT IS EXPLOITING THE IMMOVABLE PROPERTY BY WAS OF COMMERCIAL ACTIVITY AND IN THAT EVENT IT MUST BE HE LD AS BUSINE3SS INCOME AS HELD IN THE CASE OF M/S. SHAMBH U INVESTMENTS P. LTD. VS. CIT. SINCE THE ASSESSEE HA S NOT RECEIVED ANY DEPOSIT FROM ITS CLIENTS, THE MAIN OBJECTIVE OF THE ASSESSEE IS TO COMMERCIALLY EXPLOIT THE SAID PROPERTY FOR EARNI NG THE INCOME. THE FACTS DISCUSSED ABOVE COUPLED WITH THE FACT THAT THE ASSESSEE HAS OBTAINED SERVICE TAX REGISTRATION FOR THE INCOME EARNED FROM HIRING OUT OF BUNGALOW/STUDIO, IT BECOM ES QUITE CLEAR THAT THE ASSESSEE IS ENGAGED IN THE COMMERCIA L ACTIVITIES OF EARNING OF SUCH INCOME. THE AO, IS THEREFORE, D IRECTED TO TREAT THE RECEIPTS OF THE ASSESSEE OF RS. 28,89,573 /- AS BUSINESS RECEIPTS AND NOT TO TREAT THE SAME AS INCOME FROM H OUSE PROPERTY. THE GROUND OF APPEAL IS ALLOWED. THE ASSESSING OFFICER IS NOT SATISFIED BY THE STAND SO TAKEN BY THE LD. CIT (A), AND IS IN APPEAL BEFORE US. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATI VE, BUT NONE APPEARED FOR THE ASSESSEE. WE HAVE ALSO CAREF ULLY PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATR IX OF THE CASE AS ALSO THE APPLICABLE LEGAL POSITION. WE FIND THAT IN CIT VS. SHAMBHU INVESTMENT PVT. LTDS CASE (249 ITR 7) , WHICH WAS APPROVED BY HONBLE SUPREME COURT IN JUDGMENT REPORTED AT 263 ITR AT PAGE 143, THEIR LOR DSHIPS HAD AN OCCASION TO ELABORATELY DEAL WITH JUDICIAL PRECEDEN TS ON WHETHER RENTAL INCOME COULD BE TAXED UNDER THE HEAD BUSINESS PROFI TS, AND THEIR LORDSHIPS CONCLUDED AS FOLLOWS: TAKING A SUM TOTAL OF AFORESAID DISCUSSIONS, IT CLE ARLY APPEARS THAT MERELY BECAUSE INCOME IS ATTACHED TO A NY IMMOVABLE PROPERTY CANNOT BE THE SOLE FACTOR FOR AS SESSMENT OF SUCH INCOME AS INCOME FROM PROPERTY; WHAT HAS TO BE SEEN IS WHAT WAS THE PRIMARY OBJECT OF THE ASSESSEE WHIL E EXPLOITING THE PROPERTY. IF IT IS FOUND, APPLYING SUCH TEST, THAT MAIN INTENTION IS FOR LETTING OUT THE PROPERTY , OR ANY PART THEREOF, THE SAME MUST BE CONSIDERED AS RENTAL INCOME ITA NO. 3647/MUM/2010 A.Y 2005-2006: 5 OR INCOME FROM PROPERTY. IN CASE, IT IS FOUND THAT THE MAIN INTENTION IS TO EXPLOIT THE IMMOVABLE PROPERTY BY W AY OF COMPLEX COMMERCIAL ACTIVITIES, IN THAT EVENT, IT MU ST BE HELD AS BUSINESS INCOME. IT IS THUS CLEAR THAT WHEN A PROPERTY IS EXPLOITED BY WAY OF COMPLEX COMMERCIAL ACTIVITIES, INCOME SO EARNED B Y EXPLOITING THE PROPERTY IS TO BE TAXED AS BUSINESS INCOME. VIEWED IN THIS PERSPECTIVE, AND HAVING REGARD TO THE FACT THAT IT IS NOT A CASE OF SIMPLICITOR RENTING OF PREMISES BUT SIGNIFICANT VALUE ADDITION TO PREMISES BY PROVIDING ALL INCIDENTAL AND SUPPORT SE RVICES TO FACILITATE CINE SHOOTING AND RELATED ACTIVITIES, THE INCOME IS EARNED BY COMPLEX COMMERCIAL ACTIVITIES WHICH CAN ONLY BE TAXED UNDER THE HEAD BUSINESS INCOME. THE FACT THAT IT IS CLEARLY A COM MERCIAL ADVENTURE, INVOLVING MARKETING AND PROMOTIONS AS ALSO APPROPRI ATE IMPROVISATIONS ON A CASE TO CASES BASIS, TAKES THES E RECEIPTS OUT OF THE AMBIT OF INCOME UNDER THE HEAD PROPERTY INCOME. SIMILARLY, AS REGARDS CLASSIFICATION OF THE NATURE OF PAYMENTS IN THE TDS CERTIFICATES, NOTHING ON TURNS ON THE SAME BECAUSE THE NATURE OF PAYMENT, AS THE LAW IS WELL SETTLED, NEED NOT BE TH E SAME IN THE HANDS OF THE RECIPIENT AS IN THE CASE OF THE PAYER. THAT APART, IT IS ONLY ELEMENTARY THAT DEFINITION OF RENT IN SECTION 194 I IS NOT CONCLUSIVE OF TAXABILITY OF THE RELATED INCOME UNDER THE HEAD IN COME FROM HOUSE PROPERTY. THE CONCLUSIONS ARRIVED AT BY THE LD. CI T (A) THUS DO NO CALL FOR ANY INTERFERENCE. A LOT OF EMPHASIS HAS BEEN LAID, BY THE ASSESSING O FFICER, ON HONBLE SUPREME COURTS JUDGMENT IN THE CASE OF SUL TAN BROTHERS ( SUPRA), BUT WE ARE UNABLE TO SEE AS HOW DOES IT ADVANCE HI S CAUSE. THE ASSESSING OFFICER, AS WE HAVE NOTED EARLIER WHI LE SETTING OUT THE FACTS, HAS REFERRED TO THIS JUDGEMENT AND CLAIMED T O HAVE APPLIED THE RATIO OF THE SAME. AS A MATTER OF FACTS, THE PRECIS E GRIEVANCE RAISED BY THE ASSESSING OFFICER IN THIS APPEAL IS THAT CONTRA RY TO THE LAW LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF SULTAN BROTHERS (SUPRA), THE CIT(A) HAS GIVEN THE IMPUGNED RELIEF. THE STAN D OF THE ASSESSING OFFICER, AS ALSO GRIEVANCE RAISED BY THE ASSESSING OFFICER, IS DEVOID OF ANY LEGALLY SUSTAINABLE MERITS, FOR MORE REASONS THAN ONE. FIRSTLY, HONBLE CALCUTTA HIGH COURTS JUDGMENT IN THE CASE OF SHAMBHU INVESTMENTS LTD. ( SUPRA ), WHICH HAS BEEN APPROVED BY HONBLE SUPREME COURT AND WHICH CLEARLY SETTLES THE ISSUE IN FAVOUR OF THE ASSESSEE, HAS DULY TAKEN INTO ACCOUNT HONBL E SUPREME COURTS JUDGMENT IN THE CASE OF SULTAN BROTHERS (SUPRA) AND YET REACHED THE CONCLUSION THAT WHERE COMPLEX COMMERCIAL ACTIVITIES ARE INVOLVED IN EXPLOITING A PROPERTY, INCOME CAN ONLY BE TAXED AS BUSINESS INCOME. THERE IS THUS NO CONFLICT BETWEEN THESE TWO JUDGMEN TS; QUITE TO THE CONTRARY, SHAMBHU INVESTMENTS (SUPRA) JUDGMENT MERELY FOLLOWS LAW LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF S ULTAN BROTHERS. SECONDLY, IN THE CASE OF SULTAN BROTHERS (SUPRA), T HEIR LORDSHIPS WERE ITA NO. 3647/MUM/2010 A.Y 2005-2006: 6 IN SEISIN OF A CASE IN WHICH NO SERVICES WERE BEING RENDERE D BY THE ASSESSEE, THERE WAS NO BUSINESS AT ALL, AND THE TRU E QUESTION WAS UNDER WHICH HEAD INCOME FROM RENTAL WAS TO BE TAXED WHEN BUILDING IS LET OUT WITH FURNITURE AND FILLINGS. THE ASSESS EES PLEA THAT IT SHOULD BE TAXABLE AS BUSINESS INCOME, WHICH WAS NOT ANYWAY DECIDED IN FAVOUR OF THE ASSESSEE BY HONBLE HIGH COURT EIT HER, WAS REJECTED AT THE THRESHOLD ITSELF, AND THEN THEIR LORDSHIPS DEAL T WITH THE ISSUE AS TO WHETHER IT SHOULD BE TAXED AS INCOME FROM OTHER SOURCES OR AS INCOME FROM HOUSE PROPERTY. AS A MATTER OF FACT, HO NBLE SUPREME COURT HAD, IN THIS CASE, CATEGORICALLY OBSERVED THA T THESE (LEASE COVENANTS) DO NOT AT ALL SHOW THAT LESSER WAS RENDERING ANY SE RVICE IN THE HOTEL BUSINESS CARRIED ON BY THE LESSEE, OR IN FACT DOING ANY BUSINESS AT ALL. ON THE FACTS OF THIS, WE ARE UNABLE TO AGREE THAT THE LETTING OUT OF THE BUILDING AMOUNTED TO TH E DOING OF BUSINESS. THE INCOME UNDER THE LEASE CANNOT, THEREF ORE, BE ASSESSED UNDER SECTION 10 OF THE IT ACT AS THE INCO ME OF A BUSINESS . THESE OBSERVATIONS OF HONBLE SUPREME COURT ARE IN SHARP CONTRAST WITH OUR FINDINGS IN THE PRESENT CASE IN W HICH ASSESSEE IS ACTIVELY, AND ON DAY TO DAY BASIS, ENGAGED IN ORGAN IZED BUSINESS ACTIVITIES AND IS RENDERING SIGNIFICANT SERVICES. T HE OBSERVATIONS MADE BY HONBLE SUPREME COURT WERE IN THE CONTEXT OF WHE THER IT SHOULD BE TAXABLE AS BUSINESS INCOME OR AS INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER WAS THUS CLEARLY IN ERROR IN APPL YING THESE OBSERVATIONS IN THE CONTEXT OF AN UNRELATED QUESTIO N. FINALLY, THE DISPUTE IN SULTAN BROTHERS CASE (SUPRA), WHICH WAS FINALLY ADJUDICATED BY HONBLE SUPREME COURT, WAS NOT WHETH ER AN INCOME IS TO BE TAXED UNDER THE HEAD BUSINESS INCOME OR UNDER THE HEAD INCOME FROM HOUSE PROPERTY, BUT THE ISSUE REALLY WA S WHETHER THE INCOME FROM GIVING A HOTEL, ALONG WITH FURNITURE AN D FIXTURES, WAS TO BE TAXED UNDER THE HEAD INCOME FROM OTHER SOURCES O R UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE OBSERVATIONS MADE B Y HONBLE SUPREME COURT HAVE NO RELEVANCE IN THE PRESENT CONT EXT OF THE QUESTION WHETHER INCOME COULD BE TAXED UNDER THE HE AD BUSINESS INCOME OR UNDER THE HEAD INCOME FROM OTHER SOURCES. REVENUE THUS DOES NOT GAIN ANYTHING FROM REFERENCE TO HONBLE SU PREME COURTS JUDGMENT IN THE CASE OF SULTAN BROTHERS JUDGMENT (SUPRA) EITHER. IN VIEW OF THE ABOVE DISCUSSIONS AND BEARING IN MIN D ENTIRELY OF THE CASE, WE APPROVE CONCLUSION ARRIVED AT BY THE L D. CIT (A) AND DECLINE TO INTERFERE IN THE MATTER. 3. THE MATERIAL FACTS, IN MERITS, OF THE CASE BEFO RE US ARE THE SAME AS FOR THE ASSESSMENT YEAR 2006-2007. LEARNED DEPARTMENTA L REPRESENTATIVE, THEREFORE, AGREES THAT WHATEVER WE DECIDE FOR A.Y. 2006-2007 WILL APPLY MUTATIS MUTANDIS FOR THIS APPEAL AS WELL. ITA NO. 3647/MUM/2010 A.Y 2005-2006: 7 4. RESPECTFULLY FOLLOWING OUR ORDER FOR A.Y. 2006-2 007 IN ASSESSEES OWN CASE, WE UPHOLD THE ORDER OF THE LD. CIT (A) AND DE CLINE TO INTERFERE IN THE MATTER. 5. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS 30 TH DAY OF JUNE, 2011. SD/- SD/- VIJAY PAL RAO PRAMOD KUMAR JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 30 TH JUNE, 2011. OKK* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- XXX, MUMB AI 4. COMMISSIONER OF INCOME TAX, CONCERNED 5. DEPARTMENTAL REPRESENTATIVE, BENCH J, MUMBAI TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI