A.C.I.T., Circle-4(1), Agra V. M/s Romsons Scientific and, Agra

ITA 54/AGR/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7684 (ITAT-AGRA)
• Duration Of Justice: 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-07-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 15-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule of consistency
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.54/AGR/2012 ASSESSMENT YEAR: 2007-08 ASSTT. COMMISSIONER OF INCOME TAX, VS. M/S ROMSON S SCIENTIFIC & CIRCLE 4(1), AGRA. SURGICAL INDUSTRIES (P) LT D., 63, INDUSTRIAL ESTATE, NUNHAI, AGRA. (PAN: AAACR 5839 H). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI WASEEM ARSHAD, SR. D.R. RESPONDENT BY : SHRI SAHIB P. SATSANGEE, C.A. DATE OF HEARING : 18.07.2012 DATE OF PRONOUNCEMENT OF ORDER : 27.07.2012 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 04.11.2011 PASSED BY THE LD. CIT(A)-II, AGRA FOR THE ASSESSMEN T YEAR 2007-08 ON THE FOLLOWING GROUNDS :- 1. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DECIDING THE ISSUE OF THE ASSESSEE TO ASSESS THE AMOUNT REALIZED FROM LEA SE OF PART OF THE COMMERCIAL ASSET NAMELY PROPERTY AT 8 & 11 KEWAL IN DUSTRIAL ESTATE, S B MARG, LOWER PAREL, MUMBAI AS INCOME FROM BUSINE SS INSTEAD OF INCOME FROM HOUSE PROPERTY WITHOUT APPRECIATING THE FACTS OF THE CASE ITA NO.54/AGR/2012 A.Y. 2007-08 . 2 THAT THE ASSESSEE IN ITS WISDOM TREATED THE INCOME THE INCOME ARISING FROM THE LETTING OUT PROPERTY TO M/S KOUTON'S RETAI L INDIA LTD AS INCOME FROM HOUSE PROPERTY. 2. THE ID CIT (A) HAS ERRED IN LAW AND ON FACTS IN DECIDING THE ISSUE OF THE ASSESSEE TO ASSESS THE AMOUNT REALIZED FROM LEA SE OF PART OF THE COMMERCIAL ASSET NAMELY PROPERTY AT 8 & 11 KEWAL IN DUSTRIAL ESTATE, S B MARG, LOWER PAREL, MUMBAI AS INCOME FROM BUSINE SS INSTEAD OF INCOME FROM HOUSE PROPERTY BY APPLYING THE PRINCIPL E OF RES-JUDICATA THOUGH THE SAME IS NOT APPLICABLE TO THE INCOME TAX PROCEEDINGS. 3. THE ID CIT(A) HAS ERRED IN LAW AND ON FACTS IN D ECIDING THAT THE AMOUNT REALIZED FROM LEASE OF PART OF THE COMMERCIA L ASSET NAMELY PROPERTY AT 8 & 11 KEWAL INDUSTRIAL ESTATE, S B MAR G, LOWER PAREL, MUMBAI IS INCOME FROM BUSINESS INSTEAD OF INCOME FR OM HOUSE PROPERTY BY IGNORING THE PROVISIONS OF SECTION 22 O F THE IT ACT, THAT THE INCOME EARNED FROM LETTING OUT OF THIS SPACE IS LIABLE TO BE ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AS THE SAME IS NOT USED BY THE ASSESSEE FOR ITS BUSINESS PURPOSES. 4. THE ID. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.39,36,000/- MADE BY THE AO WITHOUT APPRECIATI NG THE FACTS OF THE CASE THAT THE AO ON ENQUIRY NOTICED THAT THE FAIR M ARKET PRICE WAS NOT LESS THAN RS.200 PER SQ.FT. MORE SO, WHEN THE LET-O UT SPACE IS SMALLER, IT HAS MORE CUSTOMERS/TAKERS AND FETCHES MORE PRICE THAN A RELATIVELY HIGHER SPACE IN IDENTICAL LOCALITY. 5. THE ORDER OF THE ID. CIT (A) BEING ERRONEOUS IN LAW AND ON FACTS DESERVE TO BE QUASHED AND THAT THE ORDER OF AO TO B E RESTORED. 6. THE APPELLANT CRAVES LEAVE TO ADD OR ALTER ANY OR MORE GROUND OR GROUNDS OF APPEAL AS MAY BE DEEMED FIT AT THE TIME OF HEARING OF APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SALE OF MEDICAL AND SURGICAL DEVI CES. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (A.O.) NOTICED T HAT THE ASSESSEE HAS CLAIMED ITA NO.54/AGR/2012 A.Y. 2007-08 . 3 INCOME FROM BUSINESS OR PROFESSION IN RESPECT OF IN COME FROM PROPERTY LEASED OUT TO M/S ROSH MEDICAL SUPPLIERS. THE A.O. WAS OF THE VIEW THAT THIS INCOME SHOULD BE TREATED AS INCOME FROM HOUSE PROPERTY. THE A.O. REJECTED THE ASSESSEES CONTENTION THAT ON IDENTICAL SET OF FACTS THE INCOM E WAS ASSESSED AS INCOME FROM BUSINESS IN PAST ON THE GROUND THAT DOCTRINE OF RES -JUDICATA OR ESTOPPELS DOES NOT APPLY TO THE INCOME TAX PROCEEDINGS. WHILE TREATIN G THE INCOME FROM HOUSE PROPERTY, THE A.O. CALCULATED REASONABLY EXPECTED R ENT APPLYING RS.200/- PER SQ. FT. TO TOTAL LET OUT SPACE OF 1640 SQ. FT. ACCORDINGLY ADDITION OF RS.27,55,200/- WAS MADE AFTER ALLOWING 30% REPAIR & MAINTENANCE. THE CIT(A), FOLLOWING THE ORDER OF I.T.A.T., AGRA BENCH IN ASSESSEES OWN CASE IN I TA NO.275/AG/2009 & C.O. NO.14/AGR/2010 FOR A.Y. 2004-05 ORDER DATED 21.04.2 0011, DIRECTED THE A.O. TO ASSESS THE INCOME FROM RENT UNDER THE HEAD INCOME FROM BUSINESS. THE RELEVANT FINDING OF THE CIT(A) IS REPRODUCED AS UNDER :- (PA RAGRAPH NO.3.1) 3.1 ON SIMILAR FACTS, THE ISSUE HAS BEEN DECIDED B Y THE HONBLE ITAT, AGRA BENCH, AGRA IN ASSESSEES OWN CASE IN IT A NO.275/AGR/2009 AND CO NO.14/AGRA/2010 DATED 21.04. 2011 WHEREIN VIDE PARA NO.8, THE HONBLE ITAT HELD AS UNDER :- 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS ALONG WITH THE ORDER OF THE TAX AUTHORITIES BELOW AS WELL AS THE ASSESSMENT ORDERS FOR THE SUBSEQUENT ASSESSMENT YEA R AND THE PRECEDING ASSESSMENT YEAR, THE COMPARATIVE DETAILS OF WHICH WERE FILED BEFORE US. THE UNDISPUTED FACT IS THAT THE ASSESSEE HAS LET OUT PART OF THE PREMISES TO THE CONSIGNMENT AGENT ON ITA NO.54/AGR/2012 A.Y. 2007-08 . 4 LEAVE AND LICENSE BASIS FOR THE BETTER EXPLOITATION OF THE COMMERCIAL ASSET TEMPORARILY. THE REVENUE HAS ACCE PTED SUCH INCOME IN THE ASSESSMENT YEAR 2006-07 AS INCOME UND ER THE HEAD INCOME FROM BUSINESS. EVEN IN THE ASSESSMEN T YEAR 2001-02 TO 2003-04 ALSO, THE SAME RENTAL INCOME HAS BEEN ACCEPTED UNDER THE HEAD INCOME FROM BUSINESS, BUT NO ACTION U/S.147 OR U/S. 263 HAS BEEN TAKEN. THERE IS NO CH ANGE IN THE FACTS OF THE CASE AS COMPARED TO THIS YEAR WITH THA T OF SUBSEQUENT OR PRECEDING ASSESSMENT YEAR AND IN ALL THE PRECEDING AND SUBSEQUENT ASSESSMENT YEAR, AS PER DE TAILS FILED AT PAGE 1 OF THE PAPER BOOK, THE REVENUE HAS DULY A CCEPTED THE RENTAL INCOME UNDER THE HEAD INCOME FROM BUSINESS . IN OUR OPINION, THE RULE OF CONSISTENCY HAS TO BE FOLLOWED . IN VIEW OF THIS FACT, WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO ASSESS THE INCOME FROM RENT UN DER THE HEAD INCOME FROM BUSINESS. THUS, THIS GROUND OF CROSS OBJECTION IS ALLOWED. AS THE FACTS IN THE YEAR UNDER CONSIDERATION ARE AL SO SIMILAR, FOLLOWING THE JUDGEMENT OF THE HON ITAT, THE AO IS DIRECTED TO ASSESS THE INCOME FROM RENT UNDER THE HEAD INCOME FROM BU SINESS. 3. AT THE OUTSET, THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF I .T.A.T., AGRA BENCH IN ASSESSEES OWN CASE FOR THE A.Y. 2004-05. HE FURTH ER SUBMITTED THAT IN EARLIER YEARS SINCE A.Y. 2001-02 THE DEPARTMENT HAS ACCEPTE D THE ASSESSEES CLAIM. HE FURTHER SUBMITTED THAT IN SUBSEQUENT A.YS. 2008-09 & 2009-10 THE A.O. HIMSELF ACCEPTED THE ASSESSEES CLAIM WHILE MAKING THE ASSE SSMENT UNDER SECTION 143(3) OF THE ACT DATED 02.12.2011. ITA NO.54/AGR/2012 A.Y. 2007-08 . 5 4. AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIV E, WE NOTICED THAT THE ASSESSEE HAS ENTERED INTO THREE SEPARATE AGREEMENTS , TWO AGREEMENTS NAMELY LEAVE AND LICENSE AGREEMENTS WITH ITS SISTER CONCERN M/S. ROSH MEDICAL SUPPLIERS AND ANOTHER LEASE DEED WITH M/S/ KOUTONS RETAIL INDIA LIMITED. THE ASSESSEE CLAIMED INCOME FROM BUSINESS IN RESPECT OF INCOME RECEIVED FROM SISTER CONCERN M/S. ROSH MEDICAL SUPPLIERS. WE FIND THAT ON IDENTICAL SET O F FACTS, THE I.T.A.T., AGRA BENCH HAS DECIDED THE ISSUE IN A.Y. 2004-05 IN ORDER DATE D 21.04.2011 WHICH HAS BEEN FOLLOWED BY THE CIT(A) IN HIS IMPUGNED ORDER. SINC E THE CIT(A) FOLLOWED THE ORDER OF I.T.A.T., AGRA BENCH IN ASSESSEES OWN CAS E, THEREFORE, TO MAINTAIN CONSISTENCY, WE ARE ALSO FOLLOWING THE ORDER OF I.T .A.T., AGRA BENCH IN ASSESSEES OWN CASE FOR A.Y. 2004-05 IN ITA NO.275/AGR/2009 & C.O. NO.14/AGR/2010 ORDER DATED 21.04.2011. IN THE LIGHT OF THE FACTS, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A). ORDER OF CIT(A) IS ACCORDINGLY CONFIRME D. 5. SINCE WE HAVE CONFIRMED THE ORDER OF CIT(A) WHER EIN THE CIT(A) HAS DIRECTED THE A.O. TO ASSESS THE INCOME AS INCOME FR OM BUSINESS, THEREFORE, GROUND RAISED IN RESPECT OF DELETION OF ADDITION OF RS.39, 36,000/- MADE BY THE A.O. TREATING THE INCOME FROM HOUSE PROPERTY ON THE BASI S OF REASONABLE RATE DOES NOT SURVIVE. THEREFORE, THE SAME IS DISMISSED. ITA NO.54/AGR/2012 A.Y. 2007-08 . 6 6. OTHER GROUNDS RAISED ARE SUPPORTING GROUNDS AND THEREFORE, THE SAME ARE ALSO DISMISSED. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY