USHA MANOHAR SHETTY, MUMBAI V. ASST CIT 18(3), MUMBAI

ITA 3984/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4463 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2016
• Appeal Filed By: Assessee
• Bench Allotted: F
• Next Hearing Date: 02-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 17-05-2013
• Court: TRIBUNAL
• Assessee Lawyers: DR K SHIVARAMA R
• Section: 143(3); 12

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI , , , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.3984/MUM/2013 ASSESSMENT YEAR: 2008-09 USHA MANOHAR SHETTY, 132 MARBLE ARCH SENAPATI BAPA TMARG, MAHIM MUMBAI-400016 / VS. ACIT 18(3) R.NO.209, 2 ND FLOOR, PIRAMAL CHAMBER, PAREL MUMBAI -400012 (REVENUE) (RESPONDENT ) P.A. NO. ABBPS2235F ASSESSEE BY DR. K. SHIVARAM(A R) REVENUE BY SHRI SANTOSH MANKOSKAR (DR) !' / DATE OF HEARING : 24/11/2015 !' / DATE OF ORDER: 6/01/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEAL S)-16, MUMBAI {(IN SHORT CIT(A)}, DATED 19.02.2013 FOR T HE USHA MANOHAR SHETTY 2 ASSESSMENT YEAR 2008-09, DECIDED AGAINST THE ASSESS MENT ORDER PASSED BY THE ASSESSING OFFICER (IN SHORT AO ) U/S 143(3) OF THE ACT, ON THE FOLLOWING GROUNDS: 1.THE LD. CIT(A) ERRED IN UPHOLDING THE ACTION OF THE AO IN TREATING THE RENTAL INCOME EARNED OF RS.21,37,850/- RECEIVED FROM LET OUT OF SIX SHOPS TO CKP CO-OP BAN K LTD VIDE LEAVE LICENSE AGREEMENT DATED 15/2/2008 AS 'INCOME FROM OTHER SOURCE INSTEAD OF 'INCOME FROM H OUSE PROPERTY' DECLARED BY ASSESSEE. 2.THE ID. CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE DOMINANT PURPOSE WAS TO LET OUT THE PROPERTY TO EARN RENTAL INCOME MERELY BECAUSE ALONG WITH THE PREMISES SOME FURNITURE AND FIXTURES ARE ALSO PROVI DED THAT WOULD NOT CHANGE THE NATURE OF RECEIPT MORE SO WHEN THE TREATMENT IS ACCEPTED BY THE DEPT CONSISTE NTLY IN PAST YEARS. 3. THE ID. CIT(A) FAILED TO APPRECIATE THAT BY VIRT UE OF TENANCY RIGHT HELD BY THE ASSESSEE HE WAS A DEEMED OWNER OF THE PROPERTY U/S. 27(IIIB) OF THE OF THE A CT. 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y DR. K. SHIVARAM, AUTHORISED REPRESENTATIVE (AR) ON BEHALF OF THE ASSESSEE AND BY SHRI SANTOSH MANKOSKAR, DEPARTM ENTAL REPRESENTATIVE (DR) ON BEHALF OF THE REVENUE. 3. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS TH AT RENTAL INCOME RECEIVED BY THE ASSESSEE FROM LETTING OUT OF THE PROPERTY WAS TREATED TO BE ASSESSED AS INCOME FROM OTHER USHA MANOHAR SHETTY 3 SOURCES INSTEAD OF INCOME FROM HOUSE PROPERTY; O N THE GROUND THAT ASSESSEE WAS NOT OWNER OF THE PROPERTY. 3.1. DURING THE COURSE OF HEARING, IT WAS SUBMITTED BY THE LD. COUNSEL THAT THE AO HAS WRONGLY TREATED THE IMPUGNE D INCOME AS INCOME FROM OTHER SOURCES. IT WAS SUBMITTED TH AT ASSESSEE IS DEEMED OWNER OF THE PROPERTY U/S 27(IIIB) OF THE ACT. OUR ATTENTION WAS DRAWN ON A CHART, SUBMITTED BEFORE US BY LD. COUNSEL, SHOWING HISTORY OF THE ASSESSMENTS OF THE ASSESSEE WHEREIN IMPUGNED INCOME HAS BEEN SHOWN AS INCOME F ROM HOUSE PROPERTY IN LAST MANY YEARS. THE ASSESSEE AL SO SUBMITTED COPY OF RENT RECEIPT DATED 01.04.1985 TO SHOW THAT RENT WAS PAID BY THE ASSESSEE TO THE MAIN TENANT IN HER NAME. IN VIEW OF THESE FACTS, IT WAS SUBMITTED BY THE LD. COUNSEL THAT THE ASSESSEE HAS BEEN ENJOYING THIS PROPERTY AS AN OWNER AND THEREFORE RENTAL RECEIPT FROM SUB-LETTING SHOULD BE TREATED AS INCOME FROM HOUSE PROPERTY IN ITS HANDS. 3.2. ON THE OTHER HAND, LD. DR SUPPORTED THE ORDERS OF L OWER AUTHORITIES AND SUBMITTED THAT STANDARD DEDUCTION A VAILABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY CANNOT BE CLAIMED BY THE TWO PERSONS ON SAME RECEIPT AND THER EFORE, HE REQUESTED FOR UPHOLDING THE ORDERS OF LOWER AUTHORI TIES BY CONFIRMING THEIR ACTION IN TREATING IMPUGNED INCOME AS INCOME FROM OTHER SOURCES. 3.3. WE HAVE GONE THROUGH THE ORDERS OF LOWERS AUTHORIT IES AS WELL AS SUBMISSIONS MADE BY BOTH THE SIDES. IT IS N OTED BY US USHA MANOHAR SHETTY 4 THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE AO FOUND THAT INCOME RECEIVED BY THE ASSESSEE FROM SUB -LETTING THE HOUSE PROPERTY WAS ACTUALLY OWNED BY HER HUSBAN D AND THEREFORE, HE CONSIDERED THE INCOME AS INCOME FROM OTHER SOURCES ON THE GROUND THAT THE ASSESSEE WAS NOT OW NER OF THE HOUSE PROPERTY. THE LD. CIT(A) CONFIRMED THE ACTION OF THE LD. AO. OUR ATTENTION HAS BEEN DRAWN BY THE LD. COUNSEL ON SECTION 27(IIIB), WHEREIN THE EXPRESSION OWNER OF THE HOUSE PROPERTY HAS BEEN DEFINED. FOR THE SAKE OF READY RE FERENCE SAME IS REPRODUCED HEREUNDER: (IIIB) A PERSON WHO ACQUIRES ANY RIGHTS (EXCLUDING ANY RIGHTS BY WAY OF A LEASE FROM MONTH TO MONTH OR FOR A PERIOD NOT EXCEEDING ONE YEAR) IN OR WITH RESPECT T O ANY BUILDING OR PART THEREOF, BY VIRTUE OF ANY SUCH TRA NSACTION AS IS REFERRED TO IN CLAUSE (F) OF SECTION 269UA, S HALL BE DEEMED TO BE THE OWNER OF THAT BUILDING OR PART THE REOF: 3.4. IT IS NOTED FROM THE ABOVE THAT THE ASSESSEE SHALL BE DEEMED TO BE OWNER OF THE PROPERTY IN CASE SAID PRO PERTY WAS ACQUIRED BY HIM ON ACCOUNT OF ANY TRANSACTIONS AS I S REFERRED IN CLAUSE OF (F) OF SECTION 269UA, WHICH READS AS UNDER: (F) TRANSFER (I) IN RELATION TO ANY IMMOVABLE PROPERTY REFERRED TO I N SUB-CLAUSE (I) OF CLAUSE(D), MEANS TRANSFER OF SUCH PROPERTY BY WAY OF SALE OR EXCHANGE OR LEASE FOR A TERM OF NOT LESS THAN TWELVE YEARS, AND INCLUDES ALLOWING THE POSSESSION OF SUCH PROPERTY TO BE TAKE N OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF TH E USHA MANOHAR SHETTY 5 NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER O F PROPERTY ACT, 1882(4 OF 1882) EXPLANATION- FOR THE PURPOSE OF THIS SUB-CLAUSE, A LEASE WHICH PROVIDES FOR THE EXTENSION OF THE TERM THEREOF BY A FURTHER TERM OR TERMS SHALL BE DEEMED TO BE A LEASE FOR A TERM OF NOT LESS THAN TWELVE YEARS , IF THE AGGREGATE OF THE TERM FOR WHICH SUCH LEASE IS T O BE GRANTED AND THE FURTHER TERM OR TERM FOR WHICH I T CAN BE SO EXTENDED IS NOT LESS THAN TWELVE YEARS; 3.5. IT IS SUBMITTED BEFORE US THAT THE ASSESSEE HAS BEE N TENANT OF THIS PROPERTY FOR MORE THAN 12 YEARS. THE SE FACTS WERE NOT DISPUTED BY THE LD. DR BEFORE US. IT IS FU RTHER NOTED BY US THAT HISTORY CHART SUBMITTED BEFORE US SHOWS THAT INCOME FROM THIS PROPERTY HAS BEEN TREATED, ALL ALO NG DURING PAST YEARS, AS INCOME FROM HOUSE PROPERTY. THE AS SESSEE HAD CLAIMED THE SAME AS INCOME FROM HOUSE PROPERTY BE ING DEEMED OWNER U/S 27(IIIB) OF THE ACT. WE FIND THAT IN VIEW OF THE FACTS NARRATED BY THE ASSESSEE READ WITH THE PR OVISIONS OF LAW AS DISCUSSED ABOVE AND SEEN IN THE LIGHT OF PAS T HISTORY OF THE ASSESSEE WHEREIN CLAIM OF THE ASSESSEE HAS BEEN ACCEPTED THROUGH OUT BY THE REVENUE, WE FIND FORCE IN THE AR GUMENTS OF THE LD. COUNSEL THAT IN THIS YEAR THE REVENUE WAS N OT PERMITTED TO TAKE A CONTRARY STAND. IT IS WORTH NET TING THAT DEPARTMENT HAD PASSED AN ORDER U/S 143(3) DATED 23. 09.2009, FOR A.Y. 2007-08 WHEREIN SIMILAR INCOME HAS BEEN TR EATED AS INCOME FROM HOUSE PROPERTY. THE AO IN THE AFORESA ID ORDER USHA MANOHAR SHETTY 6 MADE COMPUTATION OF INCOME WHEREIN, THE AFORESAID I NCOME HAS BEEN ASSESSED CONSPICUOUSLY UNDER THE HEAD INC OME FROM HOUSE PROPERTY. IT IS FURTHER NOTED BY US THAT HON BLE DELHI HIGH COURT IN THE CASE OF SM ART PVT. LTD. VS CIT 166 TAXMANN 53 HELD THAT ASSESSEE BEING IN FULL CONTROL OF THE PROPERTY AS TENANT, INCOME EARNED FROM SUB-LETTING THE SAME IS ASSESSABLE AS INCOME FROM HOUSE PROPERTY, EVE N THOUGH THE ASSESSEE WAS NOT OWNER THEREOF. WE FURTHER FIND SUPPORT FROM THE JUDGMENT OF HONBLE SUPREME COURT IN THE C ASE OF CIT VS. EXCEL INDUSTRIES 358 ITR 295 , WHEREIN IT HAS BEEN HELD THAT IF A STAND HAS BEEN ACCEPTED BY THE REVEN UE CONSISTENTLY, THEN IT SHOULD NOT BE REVERSED UNLESS THERE IS SOME CHANGE IN FACTS OR LAW. THE RELEVANT PORTION O F THE ORDER OF HONBLE SUPREME COURT IS REPRODUCED BELOW: 28. SECONDLY, AS NOTED BY THE TRIBUNAL, A CONSISTEN T VIEW HAS BEEN TAKEN IN FAVOUR OF THE ASSESSEE ON THE QUE STIONS RAISED, STARTING WITH THE ASSESSMENT YEAR 1992-93, THAT THE BENEFITS UNDER THE ADVANCE LICENCES OR UNDER TH E DUTY ENTITLEMENT PASS BOOK DO NOT REPRESENT THE REAL INC OME OF THE ASSESSEE. CONSEQUENTLY, THERE IS NO REASON FOR US TO TAKE A DIFFERENT VIEW UNLESS THERE ARE VERY CONVINC ING REASONS, NONE OF WHICH HAVE BEEN POINTED OUT BY THE LEARNED COUNSEL FOR THE REVENUE. 29. IN RADHASOAMI SATSANG SAOMI BAGH V. CIT [1992] 193 ITR 321/60 TAXMAN 248 (SC) THIS COURT DID NOT THINK IT APPROPRIATE TO ALLOW THE RECONSIDERATION OF AN ISSU E FOR A USHA MANOHAR SHETTY 7 SUBSEQUENT ASSESSMENT YEAR IF THE SAME 'FUNDAMENTAL ASPECT' PERMEATES IN DIFFERENT ASSESSMENT YEARS. IN ARRIVING AT THIS CONCLUSION, THIS COURT REFERRED TO AN INTERESTING PASSAGE FROM HOYSTEAD V. COMMISSIONER O F TAXATION, 1926 AC 155 (PC) WHEREIN IT WAS SAID: 'PARTIES ARE NOT PERMITTED TO BEGIN FRESH LITIGATIO N BECAUSE OF NEW VIEWS THEY MAY ENTERTAIN OF THE LAW OF THE C ASE, OR NEW VERSIONS WHICH THEY PRESENT AS TO WHAT SHOULD B E A PROPER APPREHENSION BY THE COURT OF THE LEGAL RESUL T EITHER OF THE CONSTRUCTION OF THE DOCUMENTS OR THE WEIGHT OF CERTAIN CIRCUMSTANCES. IF THIS WERE PERMITTED, LITI GATION WOULD HAVE NO END, EXCEPT WHEN LEGAL INGENUITY IS EXHAUSTED. IT IS A PRINCIPLE OF LAW THAT THIS CANNO T BE PERMITTED AND THERE IS ABUNDANT AUTHORITY REITERATI NG THAT PRINCIPLE. THIRDLY, THE SAME PRINCIPLE, NAMELY, THA T OF SETTING TO REST RIGHTS OF LITIGANTS, APPLIES TO THE CASE WHERE A POINT, FUNDAMENTAL TO THE DECISION, TAKEN OR ASSU MED BY THE PLAINTIFF AND TRAVERSABLE BY THE DEFENDANT, HAS NOT BEEN TRAVERSED. IN THAT CASE ALSO A DEFENDANT IS BO UND BY THE JUDGMENT, ALTHOUGH IT MAY BE TRUE ENOUGH THAT SUBSEQUENT LIGHT OR INGENUITY MIGHT SUGGEST SOME TR AVERSE WHICH HAD NOT BEEN TAKEN.' 30. REFERENCE WAS ALSO MADE TO PARASHURAM POTTERY WORKS LTD. V. ITO [1977] 106 ITR 1 (SC) AND THEN IT WAS HELD: 'WE ARE AWARE OF THE FACT THAT STRICTLY SPEAK ING RES JUDICATA DOES NOT APPLY TO INCOME-TAX PROCEEDINGS. AGAIN, EACH ASSESSMENT YEAR BEING A UNIT, WHAT IS DECIDED IN ONE YEAR MAY NOT APPLY IN THE FOLLOWING YEAR BUT WHERE A USHA MANOHAR SHETTY 8 FUNDAMENTAL ASPECT PERMEATING THROUGH THE DIFFERENT ASSESSMENT YEARS HAS BEEN FOUND AS A FACT ONE WAY O R THE OTHER AND PARTIES HAVE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING THE ORDER, IT WOULD NO T BE AT ALL APPROPRIATE TO ALLOW THE POSITION TO BE CHANGED IN A SUBSEQUENT YEAR. ON THESE REASONINGS IN THE ABSENCE OF ANY MATERIAL CHANGE JUSTIFYING THE REVENUE TO TAKE A DIFFERENT VIEW OF THE MATTER - AND IF THERE WAS NO CHANGE IT WAS IN SUPPORT OF THE ASSESSEE - WE DO NOT THINK TH E QUESTION SHOULD HAVE BEEN REOPENED AND CONTRARY TO WHAT HAD BEEN DECIDED BY THE COMMISSIONER OF INCOME TAX IN THE EARLIER PROCEEDINGS, A DIFFERENT AND CONTRADICT ORY STAND SHOULD HAVE BEEN TAKEN.' 31. IT APPEARS FROM THE RECORD THAT IN SEVERAL ASSE SSMENT YEARS, THE REVENUE ACCEPTED THE ORDER OF THE TRIBUN AL IN FAVOUR OF THE ASSESSEE AND DID NOT PURSUE THE MATTE R ANY FURTHER BUT IN RESPECT OF SOME ASSESSMENT YEARS THE MATTER WAS TAKEN UP IN APPEAL BEFORE THE BOMBAY HIGH COURT BUT WITHOUT ANY SUCCESS. THAT BEING SO, THE REVENUE CANNOT BE ALLOWED TO FLIP-FLOP ON THE ISSUE AND IT OUGHT LET THE MATTER REST RATHER THAN SPEND THE TAX PAYERS' MONEY IN PURSUING LITIGATION FOR THE SAKE OF IT. 3.6. WE FIND THAT IN THIS CASE THE AO HAS ATTEMPTED TO DO FLIP- FLOP ON AN ISSUE WHICH HAS BEEN DECIDED CONSISTENTL Y IN FAVOUR OF THE ASSESSEE DURING PAST YEARS. THUS, VIEWED FRO M ANY ANGLE, THE CLAIM OF THE ASSESSEE IS ALLOWABLE, ACCO RDINGLY WE USHA MANOHAR SHETTY 9 DIRECT THE AO TO TREAT THE SAID INCOME AS INCOME U NDER THE HEAD HOUSE PROPERTY. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH JANUARY, 2016. SD/- (SANJAY GARG ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER MUMBAI; $ DATED :6 /1/2016 CTX? P.S/. .. #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. &'( / THE APPELLANT 2. )*'( / THE RESPONDENT. 3. +! + , ( & ) / THE CIT, MUMBAI. 4. +! + , / CIT(A)- , MUMBAI 5. /0 )12 , +! &' 12!3 , / DR, ITAT, MUMBAI 6. 4 / GUARD FILE. / BY ORDER, */& ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI