M/s. Prinku Landfin Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 551/DEL/2010

• Counselvise Citation: 55120114 RSA 2010
• Duration Of Justice: 2 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 28-08-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 05-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S MINHAS
• Assessee Lawyers: ASHWANI TANEJA
• Keywords: Business income; Depreciation
• Section: 143(3); 234B; 147; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH F FF F : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.551/DEL/2010 551/DEL/2010 551/DEL/2010 551/DEL/2010 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2006 2006 2006 2006- -- -07 0707 07 M/S PRINKU LANDFIN PVT.LTD., M/S PRINKU LANDFIN PVT.LTD., M/S PRINKU LANDFIN PVT.LTD., M/S PRINKU LANDFIN PVT.LTD., HOUSE NO.1172, HOUSE NO.1172, HOUSE NO.1172, HOUSE NO.1172, F FF F- -- -BLOCK, BLOCK, BLOCK, BLOCK, CHITRA CHITRA CHITRA CHITRANJAN PARK, NJAN PARK, NJAN PARK, NJAN PARK, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN : AAACP7695R. PAN : AAACP7695R. PAN : AAACP7695R. PAN : AAACP7695R. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -14(4), 14(4), 14(4), 14(4), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI TANEJA, CA. RESPONDENT BY : SHRI J.S.MINHAS, DR. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : IN THIS APPEAL BY THE ASSESSEE, FOLLOWING GROUNDS ARE RAISED:- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD.CIT(A) HAS ERRED IN LAW AND ON FACTS I N CONFIRMING THE ACTION OF LD.AO IN HOLDING THAT THE INCOME OF RS.90,40,000/- IS CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND HAS FURTHER ERRED IN HOLDING TH AT THE ASSESSEE IS ENTITLED TO ONLY DEDUCTIONS U/S 24 OF T HE INCOME TAX ACT, 1961. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD.CIT(A) HAS ERRED IN LAW AND ON FACTS I N CONFIRMING THE ACTION OF LD.AO IN HOLDING THAT THE DEPRECIATION CLAIMED BY THE ASSESSEE ON THE ALLEGED ITA-551/DEL/2010 2 BUILDINGS WILL NOT BE ADMISSIBLE EITHER UNDER SECTI ON 56 OR SECTION 57. 3. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT QUAS HING THE IMPUGNED ASSESSMENT ORDER PASSED BY LD.AO AND IN NO T DELETING VARIOUS ADDITIONS/DISALLOWANCES MADE BY LD .AO AS THE ASSESSMENT ORDER IS NOT SUSTAINABLE ON VARIOUS LEGAL AND FACTUAL GROUNDS. 4. THAT HAVING REGARD TO FACTS & CIRCUMSTANCES OF T HE CASE, LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CO NFIRMING THE ACTION OF A.O. IN CHARGING INTEREST U/S 234A AN D 234B. 2. AT THE TIME OF HEARING BEFORE US, IT IS STATED B Y THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ONLY LIMITED ISSU E IN THIS APPEAL IS WITH REGARD TO HEAD UNDER WHICH RENTAL INCOME IS TO BE ASSESSED. HE STATED THAT IN ALL THE PRECEDING YEARS SINCE AY 200 1-02, THE INCOME WAS DISCLOSED BY THE ASSESSEE UNDER THE HEAD INCOM E FROM BUSINESS AND IT WAS ACCEPTED AS SUCH EITHER UNDER SECTION 14 3(1) OR UNDER SECTION 143(3). HE HAS FURNISHED BEFORE US THE COPY OF INTIMATION/ASSESSMENT ORDER OF THOSE YEARS. HE POI NTED OUT THAT IN AY 2001-02, THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) READ WITH SECTION 147 AND THE RENTAL INCOME DISCLOSED UN DER THE HEAD BUSINESS INCOME WAS ACCEPTED. THAT EVEN AFTER AY 2006-07, IN ALL THE SUBSEQUENT YEARS, THE RENTAL INCOME DISCLOSED BY TH E ASSESSEE UNDER THE HEAD BUSINESS INCOME HAS BEEN ACCEPTED BY THE REVENUE. HE, THEREFORE, SUBMITTED THAT THE SAME RENTAL INCOME CA NNOT BE ASSESSED UNDER DIFFERENT HEADS IN DIFFERENT YEARS. IN SUPPO RT OF THIS CONTENTION, HE RELIED UPON THE DECISION OF HONBLE APEX COURT I N THE CASE OF RADHASOAMI SATSANG VS. CIT - 193 ITR 321. ITA-551/DEL/2010 3 3. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDERS OF AUTHORITIES BELOW AND STATED THAT LEARNED CIT(A) HA S CONSIDERED THIS ISSUE AT LENGTH AND AFTER CONSIDERING ALL THE RELEV ANT DECISIONS ON THIS POINT, HE HAS ARRIVED AT THE CONCLUSION THAT THE RE NTAL INCOME HAS TO BE ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND NOT UNDER THE HEAD INCOME FROM BUSINESS. HE FURTHER SUBMIT TED THAT THE CONTENTION OF THE LEARNED COUNSEL THAT IN THE PRECE DING YEAR THE RENTAL INCOME IS ASSESSED UNDER THE HEAD INCOME FROM BUSI NESS IS OF NO RELEVANCE BECAUSE RULE OF RES JUDICATA IS NOT APPLICABLE TO THE INCOME TAX PROCEEDINGS. HE, THEREFORE, SUBMITTED THAT THE ORDER OF LEARNED CIT(A) SHOULD BE SUSTAINED. 4. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. IN OUR OPINION, ON THE FACTS OF THE ASSESSEES CASE, THE DECISION OF HONBLE APE X COURT IN THE CASE OF RADHASOAMI SATSANG (SUPRA) WOULD BE SQUARELY APP LICABLE WHEREIN THEIR LORDSHIPS HELD AS UNDER:- HELD, THAT, IN THE ABSENCE OF ANY MATERIAL CHANGE JUSTIFYING THE DEPARTMENT TO TAKE A DIFFERENT VIEW FROM THAT TAKEN IN EARLIER PROCEEDINGS, THE QUESTION OF THE E XEMPTION OF THE ASSESSEE APPELLANT SHOULD NOT HAVE BEEN REOP ENED. STRICTLY SPEAKING, RES JUDICATA DOES NOT APPLY TO INCOME-TAX PROCEEDINGS. THOUGH, EACH ASSESSMENT YE AR BEING A UNIT, WHAT WAS DECIDED IN ONE YEAR MIGHT NO T APPLYING THE FOLLOWING YEAR; WHERE A FUNDAMENTAL AS PECT PERMEATING THROUGH THE DIFFERENT ASSESSMENT YEARS H AS BEEN FOUND AS A FACT ONE WAY OR THE OTHER AND PARTI ES HAVE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLE NGING ITA-551/DEL/2010 4 THE ORDER, IT WOULD NOT BE AT ALL APPROPRIATE TO AL LOW THE POSITION TO BE CHANGED IN A SUBSEQUENT YEAR. 5. THE RATIO OF THE ABOVE DECISION OF HONBLE APEX COURT WOULD BE SQUARELY APPLICABLE TO THE FACTS OF THE CASE UNDER APPEAL BECAUSE ON IDENTICAL FACTS, THE RENTAL INCOME HAS BEEN DISCLOS ED BY THE ASSESSEE AS BUSINESS INCOME IN ALL THE PRECEDING YEARS SIN CE AY 2001-02 AND IT WAS ACCEPTED EITHER UNDER SECTION 143(1) OR SECTION 143(3). IT HAS ALSO BEEN STATED BY THE LEARNED COUNSEL THAT EVEN I N THE SUBSEQUENT YEARS AFTER AY 2006-07, THE SAME HAS BEEN ACCEPTED AS BUSINESS INCOME. IN VIEW OF THE ABOVE, RESPECTFULLY FOLLOWI NG THE DECISION OF HONBLE APEX COURT IN THE CASE OF RADHASOAMI SATSAN G (SUPRA), WE DIRECT THE ASSESSING OFFICER TO COMPUTE THE INCOME OF THE ASSESSEE UNDER THE HEAD BUSINESS INCOME. GROUND NOS.1 TO 3 RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 6. GROUND NO.4 OF THE ASSESSEES APPEAL IS AGAINST CHARGING OF INTEREST UNDER SECTION 234A AND 234B OF THE ACT. T HE SAME IS ADMITTED TO BE CONSEQUENTIAL. WE, THEREFORE, DIREC T THE ASSESSING OFFICER TO RECOMPUTE THE INTEREST IN ACCORDANCE WIT H LAW AFTER COMPUTING THE INCOME OF THE ASSESSEE UNDER THE HEAD BUSINESS INCOME. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST, 2012. SD/- SD/- ( (( (RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 31.08.2012 VK. ITA-551/DEL/2010 5 COPY FORWARDED TO: - 1. APPELLANT : M/S PRINKU LANDFIN PVT.LTD., M/S PRINKU LANDFIN PVT.LTD., M/S PRINKU LANDFIN PVT.LTD., M/S PRINKU LANDFIN PVT.LTD., HOUSE NO.1172, F HOUSE NO.1172, F HOUSE NO.1172, F HOUSE NO.1172, F- -- -BLOCK, BLOCK, BLOCK, BLOCK, CHITRANJAN PARK, NEW DELHI. CHITRANJAN PARK, NEW DELHI. CHITRANJAN PARK, NEW DELHI. CHITRANJAN PARK, NEW DELHI. 2. RESPONDENT : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -14(4), 14(4), 14(4), 14(4), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR