DCIT CC 7(2), MUMBAI V. SHREEJI ENTERPRISES, MUMBAI

ITA 5512/MUM/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8063 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 03-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Keywords: Business income; Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI BEFORE SHRI R C SHARMA , ACCOUNTANT MEMBER & SHRI SANDEEP GOSAIN , J UDICIAL M EMBER IT A NO. 5512 / MUM/ 20 15 ASSESSMENT YEAR : 2011 - 12 DCIT CC 7(2) MUMBAI VS. SHREEJI ENTERPRISES, OLD S NO.677, NEW S NO.7A, NEAR TEMBA HOSPITAL, BHAYANDER (W) MUMBAI 400 101 PAN ABIFS1322G ( APPELLANT ) (RESPONDENT) APPELLANT BY : S HRI V JUSTIN RESPONDENT BY : NONE DATE OF HEARING : 07.09 .2017 DATE OF PRONOUNCEMENT : 04 . 1 2 .2017 O R D E R PER R C SHARMA, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY R EVENUE AGAINST THE ORDER OF CIT(A) - 49, MUMBAI , DATED 24. 09 . 2015 , FOR A.Y.2011 - 12 , IN THE MATTER OF ORDER PASSED U/S. 143(3) OF THE IT ACT. 2. THE GROUND TAKEN BY R EVENUE IS AS UNDER: - ' 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DIRECTING THE AO TO TREAT THE INCOME FROM THE SHOPPING MALL AS BUSINESS INCOME AND ALLOW THE CLAIM OF DEDUCTIONS IN RESPECT OF THE EXPENDITURE INCURRED AND DEPRECIATION RELYI NG ON THE DECISION OF THE ITAT IN THE ASSESSEE'S OWN CASE FOR A. Y 2009 - 10 WITHOUT APPRECIATING THE FACT THAT THE ABOVE SAID DECISION OF THE IT A T HAS NOT BEEN ACCEPTED AND APPEAL TO THE HIGH COURT U/S260A OF THE IT ACT IS BEING FILED ?' ITA NO . 5512/MUM/2015 SHREEJI ENTERPRISES 2 3. NOBODY APPEARED ON BEHALF OF THE ASSESSEE INSPITE OF GIVING OPPORTUNITY, BENCH THEREFORE, DECIDED TO DISPOSE OF THE APPEAL AFTER HEARING THE LEARNED DR AND CONSIDERING THE MATERIAL ON RECORD. 4. WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND T HAT THE INCOME OFFERED BY THE ASSESSEE AS INCOME FROM BUSINESS HAS BEEN TREATED BY THE ASSESSING OFFICER AS INCOME FROM HOUSE PROPERTY. BY THE IMPUGNED ORDER THE CIT(A) ACCEPTED ASSESSEES CONTENTION OF INCOME HAVING BEEN EARNED FROM BUSINESS AND ALLO WED ASSESSEES CLAIM OF DEDUCTION IN RESPECT OF EXPENDITURE INCURRED AND DEPRECIATION ON THE ASSETS IN RELATION TO SAID INCOME. THE CIT(A) HAS FOLLOWED THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR A.Y. 2009 - 10. THE PRECISE OBSERVATIONS OF THE CIT(A) WAS AS UNDER: 5.2. IN THE APPELLANT'S OWN CASE FOR A.Y. 2009 - 10, UNDER SIMILAR FACTS AND CIRCUMSTANCES, THE ITAT MUMBAI, BENCH ' E ' MUMBAI IN APPEAL NO. ITA NO.640/M/2014 HAVE CONSIDERED THE ISSUE ' WHETHER THE INCOME/LOSS FROM LETTING OUT OF MULTIPLEX/SHOPPING MALL AND CINEMA THEATRE ALONGWITH AMENITIES IS TO ASSESSED UNDER HEAD 'INCOME FROM HOUSE PROPERTY OR AS THE' BUSINESS INCOME' OF THE ASSESSEE. IN THE ORDER DATED 14/8/2015, IN RESPONSE TO THE SAID APPEAL, IT HAS BEEN HELD BY THE ITAT THA T THE INCOME/LOSS FROM MULTIPLEX IS LIABLE TO BE ASSESSED AS 'BUSINESS INCOME/LOSS AND NOT AS INCOME FROM HOUSE PROPERTY SINCE THE MAIN OBJECT OF THE ASSESSEE IS THE COMMERCIAL EXPLOITATION OF THE PROPERTIES AND ALSO TO PROVIDE HOST OF AMENITIES AND FACILI TIES, WHICH AMOUNTS TO COMPOSITE BUSINESS ACTIVITY. THE ASSESSEE CONSEQUENTLY IS ALSO ENTITLED TO THE CLAIM OF DEDUCTION IN RESPECT OF EXPENDITURE INCURRED AND DEPRECIATION ON ASSETS ETC. IN RELATION TO SUCH INCOME. ITA NO . 5512/MUM/2015 SHREEJI ENTERPRISES 3 5.3. SINCE THE FACTS OF THE CASE REMAINS THE SAME, FOLLOWING THE ABOVE SAID ORDER DTD 14.8.2015 OF THE ITAT THE GROUND OF APPEAL IN THIS CASE IS DECIDED AS UNDER: I) WITH RESPECT TO GROUND NO.1 & 2, IT IS HELD THAT THE A.O. ERRED IN TREATING THE INCOME BY WAY OF LEASE RENT AND AMENITIES OF COM MERCIAL PROPERTY LET OUT AS INCOME FROM HOUSE PROPERTY INSTEAD OF INCOME FROM BUSINESS AND PROFESSION AS DECLARED IN THE RETURN. THE A.O. IS ACCORDINGLY DIRECTED TO REWORK THE TOTAL INCOME BY CONSIDERING THE INCOME FROM HOUSE P ROPERTY AS INCOME FROM BUSINE SS A ND ALLOW THE CLAIM OF DEDUCTION IN RESPECT OF EXPENDITURE INCURRED AND DEPRECIATION ETC IN RELATION TO SUCH INCOME. II) AS REGARD GROUND NO.2, THE A.O. IS DIRECTED TO VERIFY THE CLAIM OF MUNICIPAL TAXES PAID AND ALLOW THE DEDUCTION AS PER LAW. AS REG ARD GROUND NO.3, THE A.O. IS DIRECTED TO ALLOW CLAIM OF DEPRECIATION SINCE THE INCOME ASSESSED BY THE A.O. AS INCOME FROM HOUSE PROPERTY HAS BEEN HELD TO BE ASSESSED A S INCOME FROM BUSINESS IN TERMS OF GROUND NO.1. ACCORDINGLY, THE ADDITION OF RS.1,67,70,8 72/ - IS DIRECTED TO BE DELETED. 5. IT IS CLEAR FROM THE ORDER OF THE CIT(A) THAT HE HAS FOLLOWED THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR A.Y. 2009 - 10. WE HAVE ALSO CAREFULLY GONE THROUGH THE ORDER OF THE TRIBUNAL AND FOUND THAT THE FACT S AND CIRCUMSTANCES DURING THE YEAR ARE SAME AS HAS BEEN DEALT BY THE TRIBUNAL IN A.Y. 2009 - 10. RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN TREATING THE INCOME AS BUSI NESS INCOME AND ALLOWING THE CLAIM OF DEDUCTION IN RESPECT OF EXPENDITURE INCURRED AND DEPRECIATION ON ASSETS. ITA NO . 5512/MUM/2015 SHREEJI ENTERPRISES 4 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4TH D AY OF DECEMB ER , 2017 . S D/ - S D/ - ( SANDEEP GOSAIN ) ( R C SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 4 TH DECEMB ER , 2017 SA COPY OF THE ORDER FORWARDED TO : 1. THE APP ELL ANT. 2. THE RESPONDENT. 3. T HE CIT(A), MUMBAI 4. THE CIT 5. DR, E BENCH, ITAT, MUMBAI BY ORDER, #TRUE COPY # ASSISTANT REGISTRAR I NCOME T AX A PPELLATE T RIBUNAL , MUMBAI