ASST CIT 9(2)(2), MUMBAI V. E- CITY REAL ESTATE P.LTD, MUMBAI

ITA 4990/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5260 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 20-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R MANJUNATHA SWAMY
• Keywords: Business income; Revised return
• Section: 14A; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI BEFORE S HRI SHAMIM YAHYA (AM ) AND SHRI RAM LAL NEGI (JM) ITA NO. 4990 /MUM/2017 ASSESSMENT YEAR: 2013 - 2014 & ITA NO. 4991 /MUM/2017 ASSESSMENT YEAR: 2014 - 2015 THE ASST. COMMISSIONER OF INCOME TAX 9(2)(2), ROOM NO. 665A, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S E - CITY REAL ESTATES PVT. LTD., 844/4, FUN REPUBLIC SHAH, INDUSTRIAL ESTATE, OFF NEW LINK ROAD, ANDHERI (WEST), MUMBAI - 400053 PAN: AAJCS5879F (APPELLANT) (RESPONDENT) REVENUE BY : SHRI R. MANJUNATHA SWAMY (D R) ASSESSEE BY : SHRI JAY BHANSALI (A R) DATE OF HEARING: 22/11 /201 8 DATE OF PRONOUNCEMENT: 23 / 01 /201 9 O R D E R PER RAM LAL NEGI, JM THESE APPEALS HAVE BEEN FILED BY THE REVENUE AGAINST THE TWO ORDER S DATED 28.04.2017 PASSED BY THE C OMMISSIONER OF INCOME TAX (APPEALS) (FOR SHORT THE CIT (A)) - 16 , MUMBAI , FOR THE ASSESSMENT YEAR S 2013 - 14 AND 2014 - 15 RESPECTIVELY, WHEREBY THE LD. CIT (A) HAS PARTLY ALLOWED THE APPEAL S FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDER S PASSED U/S 143 (3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). ITA NO. 4990 /MUM/2017 (ASSESSMENT YEAR: 2013 - 2014 ) 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY ENGAGED IN THE BUSINESS OF ACQUIRING IMMOVABLE PROPERTY AND CONSTRUCTION DEVELOPMENT AND BUILDING FAMILY ENTERTAINMENT CUM MALLS ACROSS INDIA AND LEASING PROPERTIES 2 ITA NO S . 4990 & 4991 /MUM/2017 ASSESSMENT YEAR S : 2013 - 14 AND 2014 - 15 ( SHORT TERM AND LONG TERM ) , LICENSING ETC., FILED ITS RETURN OF INCOME FOR THE ASSE SSMENT YEAR UNDER CONSIDERATION DECLARING THE TOTAL LOSS AT RS. 17,64,83,379/ - . SUBSEQUENTLY , REVISED RETURN WAS FILED DECLARING THE LOSS AT RS. 17,51,81,992/ - AFTER MAKING DISALLOWANCE U/S 14A OF THE ACT . IN RESPONSE TO THE STATUTORY NOTICES, THE AUTHORI ZED REPRESENTATIVE OF THE ASSESSEE ATTENDED THE ASSESSMENT PROCEEDINGS AND FURNISHED THE DETAILS CALLED FOR. THE ASSESSEE HAD SHOWN INCOME UNDER THE HEAD OPERATING INCOME (RENT) AMOUNTING TO RS. 30,08,07,763/ - , MAINTENANCE CHARGES RECOVERED OF RS. 8,68,6 7,368/ - (RENT RECEIVED BY THE LESSEE) IN RESPECT OF SOME FACILITIES PROVIDED BY IT TO THE LESSEES AS PER THE AGREEMENT. SINCE, THE ASSESSEE HAD TAKEN ALL THE RECEIPTS UNDER THE HEAD INCOME FROM BUSINESS, THE AO ASKED THE ASSESSEE TO SHOW CAUSE AS TO WHY T HE LEASE RENTAL INCOME SHOULD NOT BE ASSESSED UNDER THE HEAD INCOME F ROM HOUSE PROPERTY. THE ASSESSEE SUBMITTED THAT THE OPERATIONAL INCOME RECEIVED FROM THE SAID ACTIVITY AND OTHER SERVICE CHARGES WAS CONSISTENTLY OFFERED TO TAX AS ITS BUSINESS INCOME IN THE EARLIER YEARS AND THE SAME WAS ACCEPTED BY THE DEPARTMENT AS BUSINESS INCOME. THEREFORE, THE SAID INCOME HAS BEEN CLAIMED AS PROFITS AND GAINS FROM THE BUSINESS . THE ASSESSEE FURTHER RELIED UPON THE DECISION OF THE ITAT RENDERED IN ITS OWN CASES PERT AINING TO THE EARLIER ASSESSMENT YEARS IN SUPPORT OF ITS SUBMISSIONS . HOWEVER, THE AO REJECTING THE CONTENTION OF THE ASSESSEE TREATED THE SAID INCOME AS INCOME FROM HOUSE PROPERTY . 3. IN THE FIRST APPEAL, THE LD. CIT (A) RELYING ON THE DECISION S OF THE I TAT RENDERED IN THE ASSESSEES OWN CASE S FOR THE A.YS. 2009 - 10, 2010 - 11 AND THE ORDER PASSED BY THE LD. CIT (A) PERTAINING TO THE ASSESSMENT YEAR 2011 - 12 AND 2012 - 13 ALLOWED THE APPEAL OF THE ASSESSEE AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RE VENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST THE SAID ORDER PASSED BY THE LD. CIT (A). 3 ITA NO S . 4990 & 4991 /MUM/2017 ASSESSMENT YEAR S : 2013 - 14 AND 2014 - 15 4 . THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) ON THE FOLLOWING GROUNDS : - (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN NOT UPHOLDING THE ACTION TAKEN BY THE AO IN TREATING THE RENTAL INCOME FROM OPERATING FAMILY ENTERTAINMENT CENTER CUM MALL AND MAINTENANCE CHARGES UNDER THE HEAD INCOME FROM HOUSE PROPERTY AGAINST THE ASSESSEES CLAIM OF PROFIT AND GAINS FROM BUSINESS OR PROFESSION? (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED ON FACTS AND IN COMPLETELY IGNORING THE DECISION OF THE HONBLE SUPREME COURT IN THE C ASE OF SHAMBHU INVESTMENT (P) LTD. 129 TAXMAN 17 (SC) WHEREIN IT IS HELD THAT INCOME DERIVED BY AN ASSESSEE BY LETTING OUT THE PROPERTY IS ASSESSABLE AS INCOME FROM PROPERTY AND NOT BUSINESS INCOME? 5. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUB MITTED THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE DECISION S OF THE ITAT RENDERED IN THE ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEARS INCLUDING THE ASSESSMENT YEARS 2011 - 12 AND 2012 - 13. THE LD. COUNSEL FURTHER POINTED O UT THAT THE HONBLE BOMBAY HIGH COURT HAS DISMISSED THE APPEAL FILED BY THE REVENUE AGAINST THE FINDINGS OF THE ITAT, IN THE ASSESSEES OWN APPEALS FOR THE A.Y. 2007 - 08 TO 2010 - 11. SINCE, THE ORDER PASSED BY THE LD. CIT (A) IS IN ACCORDANCE WITH THE DECISI ON OF THE HONBLE HIGH COURT, THERE IS NO MERIT IN THE APPEAL OF THE REVENUE. 6. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) DID NOT CONTROVERT THE FACTS STATED BY THE LD. COUNSEL. WE HAVE PERUSED THE MATERIAL ON RECORD AND ALSO GONE THRO UGH THE ORDERS PASSED BY THE COORDINATE BENCH IN THE ASSESSEES OWN CASE AS WELL AS THE JUDGMENT OF THE HONBLE HIGH COURT PASSED IN THE ASSESSEES OWN CASE ITA NO. 319 OF 2015 , 1289 OF 2016 , 1331 OF 2016 AND 201 OF 2015. WE NOTICE THAT THE 4 ITA NO S . 4990 & 4991 /MUM/2017 ASSESSMENT YEAR S : 2013 - 14 AND 2014 - 15 COORDINATE BENC H HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE ITA NO. 5503/MUM/2016 PERTAINING TO THE A.Y. 2011 - 12 RELYING ON THE DECISION OF THE TRIBUNAL RENDERED IN THE ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEARS AND THE JUD GMENT OF THE HONBLE HIGH COURT PASSED IN THE ASSESSEES OWN CASE FOR THE A.YS. 2007 - 08 TO 2010 - 2011 REFERRED ABOVE. SIMILARLY, THE COORDINATE BENCH HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN APPEAL ITA NO. 914/MUM/2017 FOR THE A.Y. 2012 - 13 BY FOLLOWING THE DECISION OF THE COORDINATE BENCH RENDERED IN THE ASSESSEES OWN CASES FOR THE EARLIER ASSESSMENT YEARS. 7. SINCE, THE HONBLE BOMBAY HIGH COURT HAS DISMISSED THE APPEALS FILED BY THE REVENUE AGAINST THE FINDINGS OF THE C OORDINATE BENCHES IN THE ASSESSEES OWN CASE FOR THE A.YS. 2007 - 08 TO 2010 - 11 AND UPHELD THE FINDINGS OF THE TRIBUNAL AND SINCE THE FINDINGS OF THE LD. CIT (A) IN THE PRESENT CASE IS IN ACCORDANCE WITH THE FINDINGS OF THE COORDINATE BENCH CONFIRMED BY THE HONBLE HIGH COURT, WE FIND NO REASON TO INTERFERE WITH THE DECISION OF THE LD. CIT (A). HENCE, WE UPHOLD THE ORDER PASSED BY THE LD. CIT (A) AND DISMISS THE APPEAL OF THE REVENUE. ITA NO. 4991 /MUM/2017 (ASSE SSMENT Y EAR: 2014 - 2015 ) THE FACTS AND THE ISSU ES INVOLVED IN THE PRESENT APPEAL IS IDENTICAL TO THE FACTS AND ISSUE INVOLVED IN THE PRESENT CASE EXCEPT THE AMOUNT WHICH WAS TREATED AS PROFIT AND GAINS FROM THE BUSINESS BY THE ASSESSEE. HENCE, WE DO NOT CONSIDER IT NECESSARY TO MENTION THE REMAINING FA CTS OF THE CASE. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUND S OF APPEAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT (A): - (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN NOT U PHOLDING THE ACTION TAKEN BY THE AO IN TREATING THE RENTAL INCOME FROM OPERATING FAMILY ENTERTAINMENT CENTER 5 ITA NO S . 4990 & 4991 /MUM/2017 ASSESSMENT YEAR S : 2013 - 14 AND 2014 - 15 CUM MALL AND MAINTENANCE CHARGES UNDER THE HEAD INCOME FROM HOUSE PROPERTY AGAINST THE ASSESSEES CLAIM OF PROFIT AND GAINS FROM BUSINESS OR PRO FESSION? (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN COMPLETELY IGNORING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SHAMBHU INVESTMENT (P) LTD. 129 TAXMAN 17 (SC) WH EREIN IT IS HELD THAT INCOME DERIVED BY AN ASSESSEE BY LETTING OUT THE PROPERTY IS ASSESSABLE AS INCOME FROM PROPERTY AND NOT BUSINESS INCOME? 3. SINCE, THE ISSUE INVOLVED IN THE PRESENT CASE IS IDENTICAL TO THE ISSUE INVOLVED IN THE ASSESSEES OWN CASE FOR THE A.Y. 2013 - 14 AND SINCE WE HAVE DISMISSED THE APPEAL OF THE REVENUE PERTAINING TO THE ASSESSMENT YEAR 2013 - 14, CONSISTENT WITH OUR FINDINGS, WE DISMISS THE PRESENT APPEAL FILED BY THE REVENUE FOR THE SAME REASONS. IN THE RESULT, BOTH THE APPEAL S FILED BY THE REVENUE FOR ASSESSMENT YEAR S 2013 - 14 AND 2014 - 15 ARE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD JANUARY, 2019 . SD/ - SD/ - ( SHAMIM YAHYA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 23 / 01/2019 ALINDRA PS 6 ITA NO S . 4990 & 4991 /MUM/2017 ASSESSMENT YEAR S : 2013 - 14 AND 2014 - 15 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT( A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI