BOMBAY GAS COMPANY LTD, MUMBAI V. DCIT 1(1), MUMBAI

ITA 3907/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2835 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 08-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Opportunity of being heard; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR , ACCOUNTANT MEMBER ITA NO. 39 0 7 / MUM . /2016 ( ASSESSMENT YEAR : 20 10 11 ) M/S. BOMBAY GAS COMPANY LTD. EMPIRE HOUSE, A.K. NAYAK MARG FORT, MUMBAI 400 001 PAN AAACB5863D . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CIRCLE 1(1), MUMBAI . RESPONDENT REVENUE BY : SHRI MANOJ KUMAR SINGH ASSESSEE BY : SHRI MANISH V. SHAH A/W MS. F ORAM BHANUSHALI DATE OF HEARING 2 1 .0 8 .201 8 DATE OF ORDER 29.08.2018 O R D E R PER SAKTIJIT DEY, J.M. AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 20 TH APRIL 2016, PASSED BY THE LEARNED COMMISSIONER (APPEALS) 2 , MUMBAI, FOR THE ASSESSMENT YEAR 20 1 0 11 . 2 . THE ONLY ISSUE IN DISPUTE ARISING IN THE PRESENT APPEAL IS WITH REGARD TO THE DECISION OF THE DEPARTMENTAL AUTHORITIES IN ASSESSING THE INCOME RECEIVED FROM RENT, COMPENSATION AND SERVICE CHARGES AS 2 M/S. BOMBAY GAS COMPANY LTD. INCOME FROM HOUSE PROPERTY INSTEAD OF INCOME FROM BUSINESS AND PROFESSION. 3 . B RIEF FACTS ARE, THE ASSESSEE , A COMPANY , IS ENGAGED IN THE BUSINESS OF GAS DISTRIBUTION IN CERTAIN AREAS OF GREATER BOMBAY THROUGH ITS NETWORK OF UNDERG ROUND PIPE LINE. IT ALSO DERIVES INCOME FROM SUB LETTING RENTED PREMISES AS W ELL AS FINANCE AND INVESTMENT ACTIVITY. FOR THE ASSESSMENT YEAR UNDER DISPUTE, ASSESSEE FILED ITS RETURN OF INCOME ON 13 TH OCTOBER 2010, DECLARING TOTAL INCOME OF ` 1,67,38,874. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE INCO ME RECEIVED BY THE ASSESSEE FROM RENT, COMPENSATION AND SERVICE CHARGES OF PREMISES LET OUT WAS SHOWN UNDER THE HEAD INCOME FROM BUSINESS AND PROFESSION. THE ASSESSING OFFICER NOTICED THAT IN THE PRECEDING ASSESSMENT YEAR SUCH INCOME RECEIVED BY THE ASSESS EE WAS TREATED AS INCOME FROM HOUSE PROPERTY BY THE ASSESSING OFFICER. HE ALSO NOTED THAT IN THE ASSESSMENT YEAR 2003 04, THE TRIBUNAL HAS APPROVED THE AFORESAID VIEW OF THE ASSESSING OFFICER. THUS, FOLLOWING THE DECISION ON THE ISSUE IN THE EARLIER ASSESS MENT YEARS, THE ASSESSING OFFICER TREATED THE INCOME RECEIVED FROM RENT, COMPENSATION AND SERVICE CHARGES AMOUNTING TO ` 2,22,00,61 2 AS INCOME FROM HOUSE PROPERTY . AFTER ALLOWING STATUTORY DEDUCTION HE ADDED BACK AN AMOUNT OF ` 1,55,40,429 . THOUGH, THE ASS ESSEE CHALLENGED THE AFORESAID ADDITION BEFORE THE LEARNED 3 M/S. BOMBAY GAS COMPANY LTD. COMMISSIONER (APPEALS), HOWEVER, LEARNED COMMISSIONER (APPEALS) FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSMENT YEAR 2003 04 UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER. 4 . THE LEARNED AUTHORISED REPRESENTATIVE ADMITTING THE FACT THAT IN ASSESSMENT YEARS 2003 04, 2004 05 AND 2007 08 , THE ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE BY THE TRIBUNAL AND ASSESSEES APPEALS ARE PENDING BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT , SUBMITTED T HAT ASSESSEE IS NOT THE OWNER OF THE PREMISES WHICH WERE SUB TENANTED OR LET OUT. HE SUBMITTED , THE CITY CIVIL COURT VIDE ITS ORDER DATED 12 TH OCTOBER 2012, HAS HELD THAT THE ASSESSEE IS A MONTHLY TENANT OF THE PREMISES LET OUT BY IT TO OTHERS. HE SUBMITTE D , IN VIEW OF SUCH FINDING OF THE CITY CIVIL COURT IT CANNOT BE SAID THAT THE PROVISIONS OF SECTION 27(IIIB) R/W 269UA(F) OF THE ACT ARE APPLICABLE TO THE ASSESSEE. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THOUGH , THE ORDER OF THE CITY CIVIL COURT AND CERTAIN OTHER EVIDENCES WERE PRODUCED BEFORE THE LEARNED COMMISSIONER (APPEALS) TO IMPRESS UPON THE FACT THAT IN VIEW OF SUCH EVIDENCES THE DECISION OF THE TRIBUNAL IN ASSESSMENT YEAR 2003 04 MAY NOT BE APPLICABLE, HOWEVER, THE LEARNED COMMISSIONER (AP PEALS) COMPLETELY IGNORED THE EVIDENCES PRODUCED BY THE ASSESSEE. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , WHILE DECIDING IDENTICAL DISPUTE ARISING IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008 09 AND 2009 10 , THOUGH , THE TRIBUNAL 4 M/S. BOMBAY GAS COMPANY LTD. TAKING NOTE OF ITS OWN DECISION IN ASSESSEES CASE FOR ASSESSMENT YEAR 2003 04, HAD OBSERVED THAT THERE IS A NEED TO MAINTAIN JUDICIAL CONSISTENCY, HOWEVER, ADMITTING THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE , SUCH AS , THE ORDER S PASSED BY THE CITY CIVIL COURT, THE HON'BLE JURISDICTIONAL HIGH COURT AND ESTATE OFFICER, THE TRIBUNAL RESTORED THE ISSUE TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2013 14 AND 2014 15, THE DEPA RTMENT HAS ACCEPTED THE RENTAL INCOME RECEIVED FROM SUB LETTING OF PREMISES AS BUSINESS INCOME. THUS, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THE ISSUE IN DISPUTE MAY BE RESTORED TO THE ASSESSING OFFICER FOR DECIDING AFRESH IN THE LIGHT OF THE DIR ECTIONS OF THE TRIBUNAL IN ASSESSMENT YEAR 2008 09 AND 2009 10. 5 . THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ISSUE MAY BE RESTORED TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION KEEPING IN VIEW THE DIRECTIONS OF THE TRIBUNAL FOR ASSESSMENT YEAR 2008 09 AND 2009 10. 6 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RECORD. IT IS EVIDENT FROM FACTS ON RECORD THAT THE ISSUE WHETHER THE RENT , COMMISSION AND SERVICE CHARGES RECEIVED FROM SUB LETTING THE PREMISES IS A RECURRING DISPUT E BETWEEN THE PARTIES FROM THE PAST YEARS. IT IS ALSO A FACT ON RECORD THAT IN ASSESSEES OWN CASE FOR 5 M/S. BOMBAY GAS COMPANY LTD. ASSESSMENT YEAR 2003 04, 2004 05 AND 2007 08, THE TRIBUNAL HAS DECIDED THIS PARTICULAR ISSUE IN FAVOUR OF THE DEPARTMENT, AGAINST WHICH THE ASSESSEE HAS PREFERRED APPEALS BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT WHICH ARE STILL PENDING. HOWEVER, WHEN IDENTICAL DISPUTE CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008 09 AND 2009 10 IN ITA NO.6212/MUM./ 2011 A ND OTHERS DATED 7 TH MARCH 2018, THE TRIBUNAL AFTER TAKING COGNIZANCE OF THE ORDERS OF THE CITY CIVIL COURT, THE HON'BLE JURISDICTIONAL HIGH COURT AND ESTATE OFFICER FILED BY WAY OF ADDITIONAL EVIDENCE , RESTORED THE ISSUE TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION KEEPING IN VIEW THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE. IN THE IMPUGNED ASSESSMENT YEAR ALSO IN COURSE OF HEARING BEFORE THE LEARNED COMMISSIONER (APPEALS) THE ASSESSEE HAD SUBMITT ED SIMILAR ADDITIONAL EVIDENCES FOR CONSIDERATION OF THE LEARNED COMMISSIONER (APPEALS) AND TO IMPRESS UPON THE FACT THAT BY VIRTUE OF THESE ADDITIONAL EVIDENCES HOLDING THE ASSESSEE AS A MONTHLY TENANT , THE DECISION OF THE TRIBUNAL IN EARLIER ASSESSMENT Y EARS CANNOT BE FOLLOWED. IT IS APPARENT ON RECORD, LEARNED COMMISSIONER (APPEALS) HAS TOTALLY IGNORED SUCH EVIDENCES FILED BY THE ASSESSEE. THEREFORE, KEEPING IN VIEW THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008 09 AND 2009 10 AS REFERRED TO ABOVE, WE RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DE NOVO ADJUDICATION AFTER DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT IS 6 M/S. BOMBAY GAS COMPANY LTD. MADE CLEAR , THE ASSESSING OFFICER MUST CONSIDER ALL THE EVIDENCES INCLUDING THE ORDERS O F THE CITY CIVIL COURT, THE HON'BLE JURISDICTIONAL HIGH COURT AND THE ESTATE OFFICER ON MERIT AND DECIDE THE ISSUE ACCORDINGLY. GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. 7 . IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29.08.2018 SD/ - RAMIT KOCHAR ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 29.08.2018 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ( SR. PRIVATE SECRETARY ) ITAT, MUMBAI