M/s. Sancheti Agencies, Nashik V. ITO,Wd. 2(1), Nashik

ITA 545/PUN/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9741 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-09-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 26-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEB JAIN
• Keywords: Business income; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER, AND SHRI R.S.PADVEKAR, JUDICIAL MEMBER. ITA.NO.545/PN/2011 (ASSTT. YEAR : 2005-06) M/S.SANCHETI AGENCIES, 1, KRUSHNAKAMAL, OM NAGAR, ADGAON NAKA, PANCHVATI, NASHI. .. APPELLANT PAN: AAKFS3267R VS. ITO, WARD-2(1), NASHIK. .. RESPONDENT ASSESSEE BY : WRITTEN SUBMISSIONS DEPARTMENT BY : SHRI RAJEEB JAIN DATE OF HEARING : 12.09.2012 DATE OF PRONOUNCEMENT : 14.09.2012 ORDER PER R.S.PADVEKAR, JM : THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING T HE IMPUGNED ORDER OF THE LD. CIT(A)-II, NASHIK, DATED 28.02.201 1 FOR THE A.Y. 2005-06. THE ASSESSEE HAS TAKEN THE FOLLOWING GROU NDS IN THE APPEAL: 1. ON THE BASIS OF THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS LAW, THE HON. COMMISSIONER OF INCOME TAX , APPEALS- II, NASHIK, IS NOT JUSTIFIED IN HOLDING THAT THE IN COME FROM WAREHOUSING IS CHARGEABLE TO TAX AS INCOME FROM HOU SE PROPERTY AS AGAINST CLAIM OF THE APPELLANT THAT THE SAME IS CHARGEABLE UNDER THE HEAD INCOME FROM BUSINESS. 2. ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AS WELL AS LAW, THE HON.COMMISSIONER OF INCOME TAX, AP PEALS-II, NASHIK, IS NOT JUSTIFIED IN HOLDING THAT THE INCOME FROM WAREHOUSING IS CHARGEABLE TO TAX AS INCOME FROM HOU SE PROPERTY AND NOT INCOME FROM BUSINESS, PARTICULARLY WHEN THE APPELLANT HAS RECEIVED THE INCOME FROM WAREHOUSING FOR THE VARIOUS SERVICES RENDERED BY THEM. 2 2. THE FACTS REVEALING FROM THE RECORD ARE AS UNDER : THE ASSESSEE DERIVES INCOME FROM WHOLESALE TRADING IN OIL AND LUBRICANTS. ASSESSEE ALSO DERIVES INCOME FROM RENT ING OF WAREHOUSE WHICH WAS TO THE EXTENT OF RS.53,23,949/- FOR THE A .Y. 2005-06. THE ASSESSEE CLAIMED THE INCOME FROM WAREHOUSE LETT ING AS A BUSINESS INCOME BY CLAIMING THE DIFFERENT EXPENDITU RE AGAINST THE SAME. ASSESSEE ALSO JUSTIFIED THE SAID CLAIM BEFOR E THE ASSESSING OFFICER. BUT THE ASSESSING OFFICER DECLINED TO ACC EPT THE CLAIM OF THE ASSESSEE THAT THE INCOME FROM RENTING OF WAREHO USING IS TO BE ASSESSED AS BUSINESS INCOME. THE ASSESSEE CARRIED THE ISSUE BEFORE THE LD. CIT(A), BUT WITHOUT SUCCESS. AS THE LD. CI T(A) CONFIRMED THE VIEW TAKEN BY THE ASSESSING OFFICER THAT THE IN COME FROM LETTING OF THE WAREHOUSE IS TO BE ASSESSED UNDER THE HEAD I NCOME FROM HOUSE PROPERTY. NOW THE ASSESSEE IS IN APPEAL BEFO RE US. 3. WE HAVE HEARD THE LD. DR. NONE WAS PRESENT FOR THE ASSESSEE. THE ASSESSEE HAS FILED AN APPLICATION STATING THAT THE ASSESSEES APPEAL FOR THE IMMEDIATE PRECEDING YEAR, I.E., A.Y. 2004-05, HAVING SIMILAR ISSUE WAS SET ASIDE BY THE TRIBUNAL TO THE FILE OF THE ASSESSING OFFICER IN VIEW OF THE DECISION OF THE HO N'BLE BOMBAY HIGH COURT IN THE CASE OF NUTAN WAREHOUSING CO. PVT . LTD. VS. DCIT (ITA.NO.1269 OF 2007) DATED 18.02.2010. IT IS PLEA DED IN THE APPLICATION THAT THE ISSUE ARISING IN THE PRESENT A PPEAL ALSO MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER WITH THE SAME DIRECTION. THE LD. DR HAS NO OBJECTION FOR SETTING ASIDE THE I SSUE TO THE FILE OF THE ASSESSING OFFICER. IN THE CASE OF THE PRESENT ASSESSEE FOR THE A.Y. 2004-05, THE IDENTICAL ISSUE CAME FOR THE CONS IDERATION BEFORE THE TRIBUNAL IN ITA.NO.539/PN/2009 ORDER DATED 13.0 8.2010, AND ISSUE WAS SET ASIDE TO THE FILE OF THE ASSESSING OF FICER WITH A DIRECTION TO DECIDE THE SAME DE NOVO AFTER CONSIDERING THE DECISION OF THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF NUTAN WAREHOUSING CO. PVT. LTD. (SUPRA). THE OPERATIVE P ART OF THE ORDER OF THE TRIBUNAL IS AS UNDER: 3 3. FOR THE SAKE OF COMPLETENESS, PARA 9 OF THE SAID JUDGMENT OF THE HIGH COURT IN THE CASE OF NUTAN WAREHOUSING CO. PVT. LTD. (SUPRA) IS REPRODUCED AS UNDER. 9. SINCE THE TRIBUNAL HAS NOT CONSIDERED THIS ASPE CT OF THE CASE, WE ARE OF THE VIEW THAT IT WOULD BE APPRO PRIATE AND PROPER TO SET ASIDE THE DECISION OF THE TRIBUNA L AND TO REMAND THE PROCEEDINGS BACK TO THE ASSESSING OFFICE R FOR A FRESH DETERMINATION AND ASSESSMENT IN ACCORDANCE WI TH LAW. WE ORDER ACCORDINGLY. UPON REMAND, IT IS CLA RIFIED THAT THE ASSESSING OFFICER SHALL NOT CONSIDER HIMSE LF TO BE BOUND BY THE DECISION OF THE TRIBUNAL DATED 19 TH MARCH, 2011 FOR ASSESSMENT YEARS 1994-95, 1995-96 AND 1996 - 97, IN VIEW OF THE CONCESSION IN THOSE TERMS WHICH HAS BEEN MADE DURING THESE PROCEEDINGS BY THE ASSESSEE. IN ORDER TO FACILITATE A FRESH EXERCISE BEING CARRIED OUT IN TERMS OF THE ORDER PASSED BY THIS COURT, THE IMPUGN ED ORDER OF THE TRIBUNAL DATED 31 ST AUGUST, 2006 IS SET ASIDE. HOWEVER, IT IS CLARIFIED THAT ALL THE RIGHTS AND CO NTENTIONS OF THE ASSESSEE AND THE REVENUE ON ALL ASPECTS OF T HE CASE ON MERITS ARE KEPT OPEN. THE ORDER OF THE REMAND, IT IS CLARIFIED SHALL ALSO BE WITH RESPECT TO THE DISALLO WANCE THAT HAS BEEN EFFECTED UNDER SECTION 40A(II) OF THE INCO ME TAX ACT, 1961. IN VIEW OF THE ORDER OF REMAND, IT IS N OT NECESSARY FOR THIS COURT TO EXPRESS ANY VIEW ONE WA Y OR THE OTHER ON THE QUESTIONS OF LAW INVOLVED. THE AP PEAL IS ACCORDINGLY DISPOSED OF. NO COSTS. 4. RESPECTFULLY FOLLOWING THE ABOVE VERDICT OF THE JURISDICTIONAL HIGH COURT WE IN TURN AS WELL HEREBY RESTORE THESE GROUNDS BACK TO THE STAGE OF THE ASSESSMENT TO BE D ECIDED DE NOVO AS DIRECTED BY THE HON'BLE COURT AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORD INGLY, THE GROUNDS RAISED IN THE APPEAL OF THE ASSESSEE ARE SE T ASIDE. 4. WE, THEREFORE, FOLLOWING THE ORDER OF THE TRIBUN AL IN THE ASSESSEES OWN CASE FOR A.Y. 2004-05, SET ASIDE THE ISSUE OF THE TREATMENT OF THE RENTAL INCOME FROM LETTING OF WARE HOUSE TO THE FILE OF THE ASSESSING OFFICER ON THE SAME DIRECTIONS TO DECIDE THE SAME DE NOVO AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS SET ASIDE ON THIS ISSUE. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 4 PRONOUNCED IN THE OPEN COURT ON THIS THE 14 TH DAY OF SEPTEMBER, 2012. SD/- SD/- ( G.S.PANNU ) ( R.S.PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER GSPS PUNE, DATED THE 14 TH SEPTEMBER, 2012 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE ITO, WARD-2(1), NASHIK. 3. THE CIT(A)-II, NASHIK. 4. THE CIT-II, NASHIK. 5. THE DR B BENCH, PUNE. 6. GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.