FOUR OCEANS PUBLISHERS P.LTD, MUMBAI V. ITO 1(1)(3), MUMBAI

ITA 4466/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2113 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 29-01-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 04-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANATHIR GUPTA
• Keywords: Business income; Business expenditure; Rule of consistency; Reasonable cause; Condonation of delay
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH , JUDICIAL MEMBER ITA NO. 4466/MUM/2013 (ASSESSMENT YEAR: 2006-07) FOUR OCEANS PUBLISHERS P. LTD. VS. INCOME TAX OFFICER - 1(1)(3) C/O. STRAND BOOK STALL DHANNUR GROUND FLOOR SIR P.M. ROAD, FORT MUMBAI 400001 ROOM NO. 531A, 5 TH FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400020 PAN AAACF4958M APPELLANT RESPONDENT APPELLANT BY: SHRI NITESH JOSHI RESPONDENT BY: SHRI RANATHIR GUPTA DATE OF HEARING: 02.11.2016 DATE OF PRONOUNCEMENT: 09.11.2016 PER JASON P. BOAZ, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)- 1, MUMBAI DATED 03.03.2011 FOR A.Y. 2006-07. THE AS SESSEE HAS FILED A PETITION FOR CONDONATION OF DELAY IN FILING THIS AP PEAL WHICH IS ACCOMPANIED BY AN AFFIDAVIT SWORN TO BY THE DIRECTOR OF THE ASS ESSEE COMPANY. ORDER ON PETITION FOR CONDONATION OF DELAY IN FILIN G THE APPEAL FOR A.Y. 2006-07 2.1 ADMITTEDLY THE IMPUGNED ORDER OF CIT(A)-1, MUMB AI DATED 03.03.2011 FOR A.Y. 2006-07 WAS SERVED ON THE ASSES SEE ON 08.04.2011. IN THAT VIEW OF THE MATTER, THE ASSESSEE OUGHT TO HAVE FILED ITS APPEAL BEFORE THE ITAT ON OR BEFORE 07.06.2011 BUT IT WAS FILED O NLY ON 04.06.2013 RESULTING IN A DELAY OF 728 DAYS. IN THE AFFIDAVIT ACCOMPANYING THE PETITION FOR CONDONATION OF DELAY IT HAS BEEN STATED THAT TH E SAID DELAY HAS OCCURRED ON ACCOUNT OF BONAFIDE REASONS. THE REASON S CITED BY THE ASSESSEE IN THE AFFIDAVIT ARE EXTRACTED HEREUNDER: - I MRS. VIDYA PRAKASH VIRKAR AGED 61 Y EARS, DIRECTOR OF FOUR OCEANS PUBLISHERS PRIVATE LIMITED DO HEREBY STATE O N SOLEMN ITA NO. 4466/MUM/2013 FOUR OCEANS PUBLISHERS P. LTD. 2 AFFIRMATION AS UNDER: 1. I SAY THAT I AM A DIRECTOR OF FOUR OCEANS PUBLI SHERS PVT. LTD. SINCE SEPTEMBER 2012. 1 AM CONVERSANT WITH THE FACT S OF THE CASE AND HENCE UNABLE TO DEPOSE THE SAME. 2. I SAY THAT THE APPEAL FILED BY THE ASSESSEE COMP ANY BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) WAS DISPOSED O F BY HIM BY HIS IMPUGNED ORDER DATED 03.03.2011. THIS ORDER WAS RECEIVED BY US ON 08.04.2011. 3 . I SAY THAT THE TIME FOR FILING OF THE APPEAL BEFORE THE TRIBUNAL WAS TO EXPIRE ON 07.06.2011. 4 . I SAY THAT MY FATHER MR. T. N. SHANBHAG WAS MANAGIN G DIRECTOR OF THE COMPANY WHO WAS HANDLING AFFAIRS OF THE COMPANY. AF TER HIS DEATH ON 27.02.2009 THERE WAS ONLY ONE DIRECTOR OF THE COMPANY VIZ, MRS. ASHA NARAYAN SHANBHAG. AT THAT TIME SHE WAS 83 YEARS OLD & PHYSICALLY INCAPABLE OF CONDUCTING THE ACTIVITIES OF BUSINESS DUE TO HER SICKNESS. 5. I SAY THAT NO APPEAL WAS FILED AGAINST THE ORDE R OF THE CIT(A) BEFORE THE TRIBUNAL DURING THE STIPULATED TIME BECA USE THERE WAS NO PERSON IN THE COMPANY TO TAKE PROPER CARE OF THE AFFAIRS OF THE COMPANY. 6. I SAY THAT I AM THE MARRIED DAUGHTER WHO WAS BAS ED IN BANGALORE UP TO AUGUST 2012. I RELOCATED MYSELF FRO M BANGALORE TO MUMBAI AND WAS APPOINTED AS A DIRECTOR OF THE SA ID COMPANY FROM SEPTEMBER, 2012. BEFORE THAT I HAD NO KNOWLEDG E OF THE AFFAIRS OF THE COMPANY. 7. I SAY THAT AT THE TIME OF MY APPOINTMENT AS A D IRECTOR THE ACCOUNTS OF THE ASSESSEE COMPANY WERE NOT FINALIZED FOR FINANCIAL YEARS 2007-08 AND ONWARDS. CONSEQUENTLY R ETURNS OF INCOME WERE ALSO NOT FILED. AFTER TAKING CHARGE OF THE COMPANY I SAW TO IT THAT THE ACCOUNTS OF THE COMPANY FROM THE N WERE FINALIZED WHICH HAPPENED SOMEWHERE IN DECEMBER, 201 2. THEREAFTER IN RESPONSE TO NOTICES RECEIVED FROM THE INCOME-TAX DEPARTMENT RETURNS OF INCOME HAVE ALSO BEEN FILED F OR ASSESSMENT YEARS 2008-09 TO 2012-2013, 8. I SAY THAT SUBSEQUENTLY AROUND MAY 2013 THE PRES ENT AUDITOR OF THE COMPANY ADVISED THAT APPEAL AGAINST THE CIT(A) S IMPUGNED ORDER DATED MARCH 03, 2011 HAS REMAINED TO BE FILLE D. PURSUANT THERETO WE HAVE NOW PREPARED AND FILED THE APPEAL O N 4/6/2013 WHICH INVOLVES A DELAY OF 627 DAYS. 9. I SAY THAT DELAY IN FILING THE APPEAL HAS OCCUR RED ON ACCOUNT OF BONAFIDE REASONS BECAUSE THERE WAS NO RESPONSIBLE E XECUTIVE IN THE COMPANY. NO PREJUDICE WOULD BE CAUSED TO THE RE VENUE IF THE DELAY IS CONDONED. ON THE OTHER HAND, IF THE APPEAL IS NOT ADMITTED A MERITORIOUS MATTER MAY GET DISMISSED WIT HOUT ADJUDICATION. ITA NO. 4466/MUM/2013 FOUR OCEANS PUBLISHERS P. LTD. 3 10. I SAY THAT THE ABOVE CIRCUMSTANCES, I MOST RES PECTFULLY SUBMIT THAT THE DELAY INVOLVED IN FILING THE APPEAL MAY BE CONDONED. 2.2 IN SUPPORT OF THE PETITION FOR CONDONATION OF D ELAY OF 728 DAYS IN FILING THE APPEAL AND ACCOMPANYING AFFIDAVIT, THE L EARNED A.R. OF THE ASSESSEE SUBMITTED THAT THERE WAS NO MALAFIDE OR DE LIBERATE INTENTION ON THE PART OF THE ASSESSEE TO DELAY THE FILING OF THI S APPEAL AND THE AVERMENTS IN THE AFFIDAVIT (SUPRA) EVIDENCE THAT THERE WAS RE ASONABLE CAUSE FOR FILING THE APPEAL BELATEDLY. IN THESE CIRCUMSTANCES, THE L EARNED A.R. OF THE ASSESSEE, INTER ALIA, PRAYING FOR CONDONATION OF DE LAY IN FILING THIS APPEAL PLACED RELIANCE ON THE PRINCIPLES LAID DOWN BY THE HON'BLE APEX COURT IN THE CASE OF: - (I) COLLECTOR, LAND ACQUISITION VS. MST KATIJI & O THERS (167 ITR 471) (SC) (II) RADHAKRISHNA RAI VS. ALLAHABAD BANK AND OTHERS (2009) 9 SCC 733 (III) CIT VS. WSEST BENGAL INFRASTRUCTURE DEVELOPME NT CORPORATION LTD. (2011) 334 ITR 269 (SC) 2.3 PER CONTRA, THE LEARNED D.R. OPPOSED THE CONDON ATION OF DELAY. 2.4.1 WE HAVE HEARD THE RIVAL CONTENTIONS ON THE IS SUE OF CONDONATOIN OF DELAY OF 728 DAYS IN FILING THE APPEAL FOR A.Y. 200 6-07 AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. AT THE OUTSET WE OBSERVE THAT THE HON'BLE APEX COURT IN THE CASE OF MST KATIJI (1 67 ITR 471) (SC) WHILE LAYING DOWN THE PRINCIPLES FOR CONSIDERING THE MATT ERS OF CONDONATOIN OF DELAY IN FILING APPEALS HAS EMPHASIZED THAT SUBSTAN TIAL JUSTICE SHOULD PREVAIL OVER TECHNICAL CONSIDERATIONS. THE HON'BLE COURT ALSO EXPLAINED THAT EVERY DAYS DELAY MUST BE EXPLAINED DOES NOT MEAN THAT A PEDANTIC APPROACH SHOULD BE TAKEN. THE DOCTRINE MUST BE APPL IED IN A NATURAL, COMMON SENSE AND PRAGMATIC MANNER. IN THE CASE OF S HAKUNTALA HEGDE, L/R OF R.K. HEGDE IN ITA NO. 2785/BANG.2004 FOR A.Y . 1993-94, THE ITAT, BANGALORE BENCH CONDONED DELAY OF ABOUT 1331 DAYS I N FILING THE APPEAL WHEREIN THE PLEA TAKEN FOR DELAY IN FILING THE APPE AL WAS DUE TO ADVICE GIVEN BY A NEW COUNSEL, WAS ACCEPTED AS SUFFICIENT. KEEPING IN MIND THE AFORESAID PRINCIPLES AND ON AN APPRECIATION OF THE REASONS CITED IN THE ASSESSEES AFFIDAVIT (SUPRA), WE FIND THAT THERE HA S BEEN NO INTENTIONAL, ITA NO. 4466/MUM/2013 FOUR OCEANS PUBLISHERS P. LTD. 4 DELIBERATE OR WILFUL NEGLECT ON THE PART OF THE ASS ESSEE TO FILE THE APPEAL BELATEDLY BUT THAT THIS WAS DUE TO THE REASONS CITE D IN THE AFFIDAVIT WHICH IN OUR VIEW CONSTITUTE REASONABLE CAUSE FOR FILING THE APPEAL FOR A.Y. 2006- 07 BELATEDLY. WE ARE ALSO OF THE OPINION THAT BY CO NDONATION OF THE AFORESAID DELAY OF 728 DAYS IN FILING THE APPEAL, T HERE WILL BE NO LOSS TO REVENUE AS LEGITIMATE TAXES PAYABLE IN ACCORDANCE W ITH LAW ALONE WOULD BE COLLECTED. IN THIS VIEW OF THE MATTER, WE ACCEPT TH E REASONS CITED BY THE ASSESSEE FOR CONDONATION OF DELAY IN FILING THIS AP PEAL AND ACCORDINGLY CONDONE THE DELAY OF 728 DAYS AND ADMIT THE APPEAL FOR CONSIDERATION ON MERITS. O R D E R 3. THE FACTS OF THE CASE, BRIEFLY ARE AS UNDER: - 3.1 THE ASSESSEE COMPANY, ENGAGED IN BUSINESS OF BO OK BINDING, PUBLISHING, STORAGE OF BOOKS, ETC. FILED ITS RETURN OF INCOME FOR A.Y. 2006- 07 ON 30.11.2006 DECLARING LOSS OF ` 1,20,061/-. THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (I N SHORT 'THE ACT') AND THE CASE WAS SUBSEQUENTLY TAKEN UP FOR SCRUTINY. TH E ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT VIDE ORDE R DATED 27.10.2008 WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED A T ` 10,85,000/-. IN DOING SO, THE AO TREATED THE RENT OF ` 15,50,000/- RECEIVED BY THE ASSESSEE FROM STRAND BOOK STALL AND DECLARED AS BUSINESS IN COME TO BE INCOME FROM HOUSE PROPERTY; ALLOWING THE ASSESSEE ONLY DED UCTION OF 30% ON ACCOUNT OF REPAIRS AND THEREBY DISALLOWING THE ENTI RE BUSINESS EXPENDITURE CLAIMED BY THE ASSESSEE. 3.2 AGGRIEVED BY THE ORDER OF ASSESSMENT DATED 27.1 0.2008 FOR A.Y. 2006-07, THE ASSESSEE PREFERRED AN APPEAL TO THE CI T(A)-1, MUMBAI, WHO DISMISSED THE ASSESSEES APPEAL VIDE THE IMPUGNED O RDER DATED 03.21.2011. 4. AGGRIEVED BY THE ORDER OF THE CIT(A)-1, MUMBAI DIS MISSING IT APPEAL FOR A.Y. 2006-07, THE ASSESSEE HAS PREFERRED THIS A PPEAL. 4.1 IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS: - ITA NO. 4466/MUM/2013 FOUR OCEANS PUBLISHERS P. LTD. 5 1. THE CIT(A) ERRED IN CONFIRMING THE ORDER PASSED BY THE INCOME TAX OFFICER 1(1)(3) ASSESSING INCOME RECEIVED OF RS .15,50,000/- FROM STRAND BOOK STALL FOR PROVIDING WAREHOUSING, B INDING, SHRINK WRAPPING, SUPERVISION CHARGES AND MAILING CH ARGES UNDER THE HEAD INCOME FROM HOUSE PROPERTY AS AGAINST UN DER THE HEAD INCOME FROM BUSINESS AS DECLARED BY THE APPE LLANT IN ITS RETURN OF INCOME. 2. THE CIT(A) FAILED TO APPRECIATE THAT: THE ASSESSEE HAD NOT LET OUT ITS PREMISES TO LICEN SEE BUT THE ARRANGEMENT WAS TO SIMPLY PROVIDE VARIOUS SERVICES TO THAT CONCERN THROUGH THE APPELLANTS OWN EMPLOYEES; THE NOMENCLATURE GIVEN TO A TRANSACTION CANNOT BE DECISIVE AS TO THE HEAD UNDER WHICH AN INCOME IS TO BE TAXED. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR MODIFY ALL OR ANY OF THE ABOVE GROUND AT THE TIME OF HEARING. 4.2.1 AT THE OUTSET, THE LEARNED A.R. OF THE ASSESS EE SUBMITTED THAT THE GROUNDS RAISED (SUPRA) PERTAINED TO ONLY ONE ISSUE OF WHETHER THE AMOUNT OF ` 15,50,000/- RECEIVED FROM STRAND BOOK STALL FOR PRO VIDING WAREHOUSING, BINDING, SHRINK WRAPPING, SUPERVISION CHARGES, ETC. CONSTITUTE INCOME FROM HOUSE PROPERTY AS HELD BY THE ASSESSING OFFICER (AO) OR INCOME FROM BUSINESS AS DECLARED BY THE A SSESSEE. ACCORDING TO THE LEARNED A.R. THE ASSESSEE; WHO REITERATED SUBMI SSIONS DATED 04.03.2010 AND OTHERS PUT FORTH BEFORE THE LEARNED CIT(A); THE MAIN ACTIVITY OF THE ASSESSEE COMPANY WAS FROM ITS FACTO RY PREMISES AT THANE, WHICH BUSINESS WAS DISCONTINUED IN 1981 DUE TO LABO UR UNREST. IN ORDER TO COMMERCIALLY EXPLOIT ITS BUSINESS ASSET, SINCE 1982 THE ASSESSEE STARTED PROVIDING AND OUTSOURCING SERVICES TO OUTSIDERS LIK E M/S. STRAND BOOK STALL, A CONCERN ENGAGED IN BUSINESS OF HOLDING BOT H BOOK FAIRS/EXHIBITIONS IN MUMBAI. THE ASSESSEE ENTERED INTO AN ARRANGEMENT WITH STRAND BOOK STALL TO PROVIDE VARIOUS SERVICES LIKE ENSURING REC EIPTS AND BINDING OF BOOKS, PROPER STORAGE, OUTGOING, BINDING, SECURITY, ETC. W HICH WERE UNDERTAKEN SOLELY BY THE EMPLOYEES OF THE ASSESSEE CONCERN. IT IS SUBMITTED THAT THE MAIN INTENTION OF THE ACTIVITIES UNDERTAKEN BY THE ASSESSEE WAS OF COMMERCIAL EXPLOITATION OF ITS BUSINESS ASSET AND N OT LETTING OUT OF ITS COMMERCIAL PROPERTY AND THEREFORE THE RESULTANT INC OME MUST BE HELD TO BE BUSINESS INCOME OF THE ASSESSEE AND NOT INCOME FORM HOUSE PROPERTY AS ITA NO. 4466/MUM/2013 FOUR OCEANS PUBLISHERS P. LTD. 6 HAS BEEN MISCONSTRUED BY THE AUTHORITIES BELOW. IT WAS ALSO POINTED OUT THAT EXPENDITURE INCURRED ON TELEPHONE, ELECTRICITY , MUNICIPAL ASSESSMENT BILLS, ETC. WAS BEING BORNE ONLY BY THE ASSESSEE, T HE KEYS, POSSESSION AND CONTROL OF THE ENTIRE FACTORY PREMISES WAS IN THE P OSSESSION AND CONTROL OF THE ASSESSEE. THE LEARNED A.R. CONTENDS THE ABOVE F ACTS CLEARLY DEMONSTRATE THAT THE ASSESSEE WAS CARRYING ON ITS B USINESS ACTIVITY OF PROVIDING THE AFORESAID SERVICES TO M/S. STRAND BOO K STAFF IN A SYSTEMATIC AND ORGANIZED WAY AND THEREFORE THOUGH THE RECEIPT FROM STRAND BOOK STALL MAY BE MENTIONED AS RENT, THE CONSIDERATION WAS FOR RENDERING OF VARIOUS SERVICES AND THE PREMISES WAS ONLY INCIDENTAL, AND HENCE THE NOMENCLATURE GIVEN CANNOT BE THE DECISIVE FACTOR AS TO UNDER WHICH HEAD THE SAME IS EXIGIBLE TO TAX. 4.2.2 THE LEARNED A.R. OF THE ASSESSEE FURTHER SUBM ITTED THAT THE POSITION OF THE ASSESSEE; THAT THIS CONSTITUTED BUSINESS IN COME WAS ACCEPTED BY THE I.T. DEPARTMENT SINCE 1982, INCLUDING THE TWO S CRUTINY ASSESSMENTS COMPLETED UNDER SECTION 143(3) OF THE ACT FOR ASSES SMENT YEARS 1996-97 AND 2003-04. IT WAS CONTENDED THAT WHILE IT IS TRUE THAT EACH ASSESSMENT YEAR IS AN INDEPENDENT PROCEEDING AND THE PRINCIPLE OF RES-JUDICATA DOES NOT APPLY TO INCOME TAX PROCEEDINGS, VARIOUS HIGH C OURTS AND THE APEX COURT HAVE HELD THAT THE PRINCIPLE OF CONSISTENCY R EQUIRES THAT THE VIEW TAKEN BY THE REVENUE AUTHORITIES IN EARLIER YEARS S HOULD NOT BE DEPARTED FROM UNLESS THERE WAS A CHANGE IN THE FACTUAL AND L EGAL POSITION. IN THE CASE ON HAND, THE FACTUAL POSITION HAS NOT CHANGED IN THIS YEAR FROM THAT OF THE EARLIER YEARS. 4.2.3 IN SUPPORT OF THE ASSESSEES PROPOSITION THAT THE SAID INCOME OF THE ASSESSEE RECEIVED FROM M/S. STRAND BOOK STALL FOR P ROVISION OF VARIOUS SERVICES IS TO BE ASSESSED ONLY AS BUSINESS INCOME , THE LEARNED A.R. OF THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS WHICH HE SUBMITTED WERE BASED ON SIMILAR FACTUAL SITUATIO NS: - (I) CIT VS. NDR WAREHOUSING PVT. LTD. (2015) 372 IT R 690 (MAD.) (II) VORA WAREHOUSING (P) LTD. VS. ACIT (1999) 70 I TD 518 (MUM) ITA NO. 4466/MUM/2013 FOUR OCEANS PUBLISHERS P. LTD. 7 IT WAS ALSO CONTENDS THAT THE JUDICIAL DECISIONS RE LIED ON BY THE AUTHORITIES BELOW WERE NOT APPLICABLE TO THE FACTUAL OR LEGAL P OSITION OF THE CASE ON HAND. 4.3 PER CONTRA, THE LEARNED D.R. FOR REVENUE PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 4.4.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD, INCLUDING THE JU DICIAL PRONOUNCEMENTS CITED. ON AN APPRECIATION OF THE FACTS AS EMANATE F ROM THE RECORD IT IS NOT DISPUTED THAT THE ASSESSEE RECEIVED AN AMOUNT OF ` 15,50,000/- DURING THE YEAR UNDER CONSIDERATION FROM M/S. STRAND BOOK STAL L BY WAY OF THE ARRANGEMENT BETWEEN THEM FOR PROVISION OF VARIOUS S ERVICES BY THE ASSESSEE SUCH AS BINDING, SHRINK WRAPPING, SUPERVIS ION CHARGES, SECURITY AND STORAGE FACILITIES, ETC.; ALL THESE WORKS BEING PERFORMED SOLELY BY THE ASSESSEES EMPLOYEES. ADMITTEDLY THE COMMERCIAL EXP LOITATION OF ITS BUSINESS ASSET, THE FACTORY AT THANE, WAS BEING DON E FOR OUTSIDERS SINCE 1982, AFTER LOCK OUT AND CLOSURE OF THE SAID FACTOR Y IN 1981. IT IS ALSO NOT DISPUTED THAT THE KEYS AND POSSESSION OF THE BUSINE SS ASSET, BEING THE FACTORY PREMISES AT THANE, WAS IN THE POSSESSION AN D CONTROL OF THE ASSESSEE ONLY AND EXPENSES INCURRED IN CONNECTION T HERETO, SUCH AS ELECTRICITY, TELEPHONE CHARGES, ETC. WERE BORNE EXC LUSIVELY BY THE ASSESSEE. IN THIS FACTUAL MATRIX OF THE CASE, IT APPEARS TO U S THAT THE ASSESSEE HAS ESTABLISHED THAT IT WAS CARRYING ON ITS ACTIVITIES OF COMMERCIALLY EXPLOITING ITS BUSINESS ASSET, I.E. THE SAID FACTORY PREMISES AT THANE, TO RENDER THE AFOREMENTIONED SERVICES TO M/S. STRAND BOOK STALL F OR A CONSIDERATION WHICH CONSTITUTE BUSINESS INCOME . IT IS NOT DISP UTED THAT THIS POSITION, I.E. SUCH INCOME FOR RENDERING OF SIMILAR SERVICES TO M/S. STRAND BOOK STALL WAS ACCEPTED AS BUSINESS INCOME AS DECLARED BY TH E ASSESSEE, EVEN IN SCRUTINY ASSESSMENTS UNDER SECTION 143(3) OF THE AC T FOR A.Y. 1996-97 AND 2003-04. WHILE THE PRINCIPLE OF RES-JUDICATA IS NOT APPLICABLE TO INCOME TAX PROCEEDINGS, WE OBSERVE THAT THE AUTHORITIES BELOW HAVE NOT BROUGHT ON RECORD ANY MATERIAL TO PROVE THAT THE FACTUAL MATRI X OF THE CASE ON THIS ITA NO. 4466/MUM/2013 FOUR OCEANS PUBLISHERS P. LTD. 8 ISSUE HAS UNDERGONE ANY CHANGE IN THE YEAR UNDER CO NSIDERATION IN THE CASE ON HAND. 4.4.2 IN THE CASE OF CIT VS. NDR WAREHOUSING P. LTD . (2015) 372 ITR 690 (MAD), WHICH WE HAVE RESPECTFULLY PERUSED, WE FIND THAT ON SIMILAR FACTS, AS IN THE CASE ON HAND, THE HON'BLE MADRAS HIGH COURT HAS HELD THAT WHEN THE ASSESSEE IS ENGAGED IN BUSINESS OF WAREHOUSING, HANDLING AND PROVISION OF VARIOUS OTHER ALLIED ACTIVITIES SUCH A S PEST CONTROL, RODENT CONTROL, PROVISION OF SECURITY, ETC. THE ACTIVITIES WERE MORE THAN MERELY LETTING OUT OF GODOWNS FOR TENANCY AND MOREOVER WHE N THE DEPARTMENT ITSELF IN THE PAST HAD ACCEPTED THE POSITION AND AS SESSED SUCH INCOME AS BUSINESS INCOME, IT WAS EXIGIBLE TO TAX AS BUSINES S INCOME AND NOT INCOME FROM HOUSE PROPERTY. SIMILAR VIEW WAS EXPR ESSED BY A COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF VORA WAREHOUSI NG (P) LTD. VS. ACIT (1999) 70 ITD 518 (MUM). IN OUR CONSIDERED VIEW, TH E FACTUAL MATRIX OF THE CASE ON HAND IN SIMILAR TO THAT OF THE CASE OF CIT VS. NDR WAREHOUSING P. LTD. (SUPRA) OF THE HON'BLE MADRAS HIGH COURT AND T HE SAME WOULD SQUARELY COVER THE ISSUE IN THE CASE ON HAND. MOREO VER THE DEPARTMENT HAVING ACCEPTED THE ASSESSEES POSITION IN EARLIER YEARS, EVEN IN SCRUTINY ASSESSMENTS THAT THE INCOME FROM M/S. STRAND BOOK S TALL EVEN THOUGH BEARING THE NOMENCLATURE OF RENT WAS EXIGIBLE AS B USINESS INCOME, WE FIND THAT IT IS NOBODYS CASE THAT THE FACTUAL MATRIX OF THE CASE HAS UNDERGONE ANY SUCH CHANGE THAT REQUIRED ACTION THAT SUCH INCO ME WAS TO BE TAXED UNDER THE HEAD INCOME FROM OTHER SOURCES AND NOT BUSINESS INCOME AS DECLARED BY THE ASSESSEE. RESPECTFULLY FOLLOWING TH E DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF NDR WAREHOUSING P. LTD. (SUPRA), WE REVERSE THE DECISION OF THE AUTHORITIES BELOW AND H OLD THAT THE INCOME OF ` 15,50,000/-EARNED BY THE ASSESSEE FROM M/S. STRAND BOOK STALL FOR PROVISION OF VARIOUS SERVICES ALONGWITH STORAGE IN ITS FACTORY PREMISES AT THANE CONSTITUTES ACTIVITY OF COMMERCIAL EXPLOITATI ON OF ITS BUSINESS ASSET IN SYSTEMATIC MANNER AND IS TO BE ASSESSED AS BUSI NESS INCOME AS DECLARED BY THE ASSESSEE AND NOT INCOME FROM HOUSE PROPERTY. WE HOLD AND DIRECT ACCORDINGLY. CONSEQUENTLY, ASSESSEES GR OUNDS ARE ALLOWED. ITA NO. 4466/MUM/2013 FOUR OCEANS PUBLISHERS P. LTD. 9 5. IN THE RESULT, THE ASSESSEES APPEAL FOR A.Y. 2006- 07 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH NOVEMBER, 2016. SD/ - SD/ - (AMARJIT SINGH) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 9 TH NOVEMBER, 2016 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -1, MUMBAI 4. THE CIT - 1, MUMBAI 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.