MACHINERY & SPARES, MUMBAI V. JT CIT 23(1), MUMBAI

ITA 4517/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2274 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 01-07-2014
• Court: TRIBUNAL
• Department Lawyers: RANDHIR GUPTA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI SANDEEP GOSAIN , JM ITA NO. 4517 / MUM/20 1 4 ( ASSESSMENT YEAR : 2011 - 12 ) M/S. MACHINERY & SPARES 201/202, KARMA STAMBH, OPP. MTNL OFFICE, VIKHROLI (W), MUMBAI VS. JT CIT 23(1), MUMBAI PAN/GIR NO. AAAFM1528K APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI VIMAL PUNMIYA REVENUE BY SHRI RANDHIR GUPTA DATE OF HEARING 2 7 /0 7 /2016 DATE OF PRONOUNCEME NT 27 / 07 /2016 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) FOR THE ASSESSMENT YEAR 2011 - 12. 2. ONLY GRIEVANCE OF ASSESSEE RELATES TO TREATMENT OF RENTAL INCOME. 3. AT THE OUTSET LEARNED AR PLACED ON RECORD THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005 - 0 6 , 2006 - 07, 2007 - 08, 2008 - 09 & 2009 - 10 WHEREIN EXACTLY SAME INCOME WAS HELD BY TRIBUNAL AS INCOME FROM OTHER SOURCES. THE HONBLE BOMBAY HIGH COURT VIDE ITS ORDER DATED 11/04/2016 HAVE CONFIRMED THE ORDER OF THE TRIBUNAL. 4. THE PRECISE OBSERVATION OF THE TRIBUNAL IN ITS ORDER DATED 28/04/2015 FOR THE ASSESSMENT YEAR 2009 - 2010 WAS AS UNDER: - ITA NO. 4517 - 2014 MACHINERY & SPARES 2 3. THE ASSESSEE BEFORE US IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF TRA DING OF WORKSHOP MACHINERY, ACCESSORIES ETC. IT TRANSPIRES THAT THE ASSESSEE WAS OCCUPYING OFFICE PREMISES AT FORT, MUMBAI WHICH IT SUBLEASED TO ICICI BANK. THE QUESTION AROSE AS TO WHETHER THE INCOME FROM SUBLETTING WAS ASSESSABLE UNDER THE HEA D INCOME FROM HOUSE PROPERTY OR INCOME FROM OTHER SOURCES. IN THE INSTANT ASSESSMENT YEAR THE A.O., FOLLOWING THE DECISION IN EARLIER ASSESSMENT YEARS STARTING FROM ASSESSMENT YEAR 2005 - 06, TOOK THE STAND THAT SINCE THE ASSESSEE WAS NOT OWNE R OF THE PROPERTY, THE INCOME FROM SUB - LETTING WAS TO BE ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES. CONSEQUENTLY, THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 24 WAS DISALLOWED. THE LD. CIT(A) HAS DIFFERED WITH THE A.O. AND INSTEAD UPHELD THE PLEA OF THE ASSESSEE THAT THE IMPUGNED RENTAL INCOME WAS ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 4. AT THE TIME OF HEARING, IT WAS A COMMON GROUND BETWEEN THE PARTIES THAT IN A.Y. 2005 - 06 THE ISSUE CAME UP BEFORE THE TRIBUNAL AND VIDE ITA NO. 3008/MUM/2008 DATED 09 - 10 - 2009 THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. THE FOLLOWING DISCUSSION IN THE ORDER DATED 09 - 10 - 2009 (SUPRA) OF THE TRIBUNAL IS RELEVANT: - WE HAVE CONSIDERED THE RIVAL SUBMI SSIONS. WE FIND THAT THE ASSESSEE IS IN POSSESSION OF THE PREMISES FOR THE LAST 40 YEARS. THE PREMISES WERE WITH M/S BHARAT IMPORT AND EXPORTS AS TENANT AND THIS FIRM WAS DISSOLVED VIDE DISSOLUTION OF THE PARTNERSHIP MADE ON 3 - 4 - 1958. THEREAFTER THE TENANCY RIGHT IN THE PREMISES WERE RECEIVED BY THE ASSESSEE. THE OWNERS OF THE PROPERTY M/S. VRINDAVAN LAL GOVERDHAN LAL HAVE ALLOWED THE ASSESSEE FIRM TO CREATE SUB - TENANCY WITH THE REGARD TO THE PREMISES AND HAS GIVEN THEIR PREMI SES FOR CREATING THE SUB - TENANCY IN FAVOUR OF ICICI BANK, LTD. FOR A PERIOD OF 15 YEARS ON CERTAIN TERMS AND CONDITIONS AS DETAILED IN THEIR LETTER DATED 24/11/2000 ADDRESSED TO THE ASSESSEE, COPY THEREOF FILED IN THE COMPILATION BEFORE US. IN THESE FACTS OF THE CASE WE FIND THAT THE ASSESSEE BECOME A DEEMED OWNER IN ACCORDANCE WITH PROVISION OF SECTION 27(IIIB) R.W.S. 269UA(F)(I) OF THE ACT. T HERE IS NO MATERIAL ON RECORD TO SUGGEST THAT THE LETTER DATED 24/11/2000 OF M/S. VRINDAVAN L AL GOVERDHAN LAL IS NOT GENUINE. THE FACT THAT THE AGREEMENT FOR LETTING OUT THE PREMISE S TO ICICI BANK LTD IS FOR A PERIOD OF 15 YEARS, CLINCHES THE ISSUE IN FAVOUR OF THE ASSESSEE AS THEY BECOME THE DEEMED OWNER UNDER THE PROVISION OF SECTION 27(IIIB) R.W.S. 269 UA (F)(I) OF THE ACT AND ACCORDINGLY IS ENTITLED TO DEDUCTION AS PROVIDED U/S 24(A) OF THE ACT. THE DECISION OF THE MUMBAI TRIBUNAL IN 8 SOT 441 AND CALCUTTA TRIBUNAL IN 89 ITD 199 COVERS THE ISSUE IN THIS CASE IN FAVOUR OF THE ASSESS EE AND ACCORDINGLY WE HOLD THAT THERE IS NO MISTAKE IN THE ORDER OF CIT(A) IN HOLDING THAT THE ASSESSEE IS THE DEEMED OWNER OF THE PREMISES U/S 27(IIIB) OF THE ACT AND THE ORDER OF THE CIT(A) IS CONFIRMED AND THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMIS SED. ITA NO. 4517 - 2014 MACHINERY & SPARES 3 5. SIMILARLY IN ASSESSMENT YEARS 2006 - 07, 2007 - 08 AND 2008 - 09 THE TRIBUNAL VIDE ITS ORDER IN ITA NO. 5419/MUM/2009, I TA NO.4584/MUM/2010 AND ITA NO. 6186/MUM/2011 DATED 29 - 12 - 2010, 29 - 7 - 2011 & 09 - 01 - 2014 RESPECTIVELY FOLLOWED THE EARLIER PRECEDENT IN ASSESSEES OWN CASE FOR A.Y. 2005 - 06 (SUPRA) AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. 6. IN VIEW OF THE AFORESAID PRECEDENTS, WE AFFIRM THE IMPUGNED DECISION OF THE LD. CIT(A) IN HOLD ING THAT THE INCOME DERIVED BY THE ASSESSEE FROM SUB - LETTING HAS TO BE ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY. AS A CONSEQUENCE, APPEAL OF THE REVENUE IS DISMISSED. 5. AS THE FACTS AND CIRCUMSTANCES DURING THE YEAR UNDER CONSIDERATION ARE SA ME, RESPECTFULLY FOLLOWING THE ORDER S OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE DO NOT FIND ANY MERIT FOR TREATING THE SUBLETTING INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 27 / 07 /2016 S D/ - ( SANDEEP GOSAIN ) S D/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 04 / 11 /201 6 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//