BADRIKESHWAR CO. OP HSG SCO, MUMBAI V. ITO WD 14(1)(3), MUMBAI

ITA 564/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3341 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 21-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: KEYURI DESAI
• Keywords: Business income

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH , JM AND SHRI RAJESH KUMAR, AM ./ I.T.A. NO. 563 /MUM/20 13 ( / ASSESSMENT YEA RS : 20 06 - 07 ) BADRIK ESHWAR CO - OP HSG SOC,82, NETAJI SUBHASH ROAD, MUMBAI - 400002 / VS. INCOME TAX OFFICER 14(1)(3), AYAKAR BHAVAN, M K ROAD, MUMBAI - 400020 ./ I.T.A. NO. 562/MUM/2013 ( / ASSESSMENT YEA RS : 2006 - 07 ) BADRIKESHWAR CO - OP HSG SOC,82, NETAJI SUBHASH ROAD, MUMBAI - 400002 / VS. INCOME TAX OFFICER 14(1)(3), AYAKAR BHAVAN, M K ROAD, MUMBAI - 400020 ./ I.T.A. NO. 5202/MUM/2013 ( / ASSESSMENT YEA RS : 2008 - 09 ) BADRIKESHWAR CO - OP HSG SOC,82, NETAJI SUBHASH ROAD, MUMBAI - 400002 / VS. INCOME TAX OFFICER 14(1)(3), AYAKAR BHAVAN, M K ROAD, MUMBAI - 400020 ./ I.T.A. NO. 564/MUM/2013 ( / ASSESSMENT YEA RS : 2008 - 09 ) BADRIKESHWAR CO - OP HSG SOC,82, NETAJI SUBHASH ROAD, MUMBAI - 400002 / VS. INCOME TAX OFFICER 14(1)(3), AYAKAR BHAVAN, M K ROAD, MUMBAI - 400020 2 563/M/2013,562/M/2013 5202/M/2013 AND 564/M/2013 ./ PAN : AAAAB0539L / ASSESSEE BY SMT.KEYURI DESAI / REVENUE BY SHRI SANJE EV JAIN / DATE OF HEARING : 0 2. 0 6 .2016 / DATE OF PRONOUNCEMENT : 02.0 6 .2016 / O R D E R PER B ENCH : THESE ARE FOUR APPEALS UNDER CONSIDERATION. T HESE FOUR APPEALS ARE DIREC TED AGAINST THE FOUR SEPARATE ORDERS OF CIT(A) OF THE RESPECTIVE DATE AND FOR THE RESPECTIVE ASSESSMENT YEARS. SINCE, THESE APPEALS PERTAIN TO THE SAME ASSESSEE, THEREFORE, FOR THE SAKE OF CONVENIENCE; THEY ARE CLUBBED TOGETHER, HEARD TOGETHER AND DISPOSED OF IN THIS CONSOLIDATED ORDER. APPEAL WISE ADJUDICATION IS GIVEN IN THE SUCCEEDING PARAGRAPHS. 2. WITH REGARD TO THE I.T.A. NO.5202/MUM/2013, IT IS NOTICED THAT THE CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE AS UNADMITTED AND IN - LIMINE FOR THE REASO N THAT HE HAS NOT CONDONED THE DELAY FOR INORDINATE AND UNREASONABLE DELAY IN FILING THE APPEAL HIS FINDING READS AS UNDER : IN GIVEN FACTS AND CIRCUMSTANCES, THE INORDINATE AND UNREASONABLE DELAY IN FILING THE APPEAL CANNOT BE CONDONED. HENCE, FOR REASON OF INORDINATE AND UNREASONABLE DELAY THE APPEAL IS LIABLE TO BE DISMISSED IN LININE AND IS DONE SO 3 563/M/2013,562/M/2013 5202/M/2013 AND 564/M/2013 3 . THE FACTS BEFORE THE CIT(A) WAS THAT THE ASSESSMENT ORDER WAS RECEIVED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2008 - 09 ON 14.1.2011 AND APPEAL B EFORE THE CIT(A) SHOULD HAVE BEEN FILED ON OR BEFORE 13.2.2011. BUT THE APPEAL WAS FILED ONLY ON 21.1.2013 THEREBY THE RE WAS A DELAY OF 700 DAYS IN FILING THE APPEAL BEFORE THE CIT(A). THE ASSESSEE RENDERED THE REASONS THAT IT IS A CO - OPERATIVE HOUSING S OCIETY AND DID NOT HAVE PROPER UNDERSTANDING ABOUT THE ACTUAL LEGAL POSITION . IT WAS ALSO CONSIDERED THAT THE HOUSING SOCIETYS INCOME IS NOT TAXABLE UNDER THE PRINCIPLE OF MUTUALITY AND TH E Y CAME TO KNOW AFTER THE AO ISSUED NOTICE DATED 15.3.2011 U/ S 271(1)( C) OF THE ACT TO THE ASSESSEE TO SHOW CAUSE AS TO WHY THE PENALTY SHOULD NOT BE IMPOSED ON SUCH ADDITION. AT THIS STAGE, THE ASSESSEE CONSULTED THE LAWYER WHO AFTER GOING THROUGH THE CASE ADVISED THE ASSESSEE THAT THE ASSESSEE HAS TO FILE APPEA L BEFORE THE TRIBUNAL NOT ONLY AGAINST THE PENALTY ORDER BUT ALSO QUANTUM ORDER . THE ASSESSEE PLEADED BEFORE THE CIT(A), THAT THE DELAY WAS SOLELY DUE TO BONAFIDE REASONS AND OTHERWISE ALSO THE ASSESSEE IS NOT GOING TO GAIN ANY BENEFIT BY DELAYING THE APP EAL. THE CIT(A) HAS JUST SUMMARILY REJECTED THE REASONS GIVEN BY THE ASSESSEE. IN VIEW OF THE REASONS GIVEN BY THE ASSESSEE, WE CONDONE THE DELAY CAUSED IN FILING THE APPEAL BEFORE CIT(A) AND ADMIT THE APPEAL. ACCORDINGLY, RESTORE THE APPEAL TO THE FILE OF THE CIT(A) FOR ADJUDICATION ON MERITS. 4 . TH IS APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 4 563/M/2013,562/M/2013 5202/M/2013 AND 564/M/2013 NOW WE WILL DEAL WITH I.T.A. NO.563/MUM/2013. 5. THE ONLY ISSUE IN THIS APPEAL OF T HE ASSESSEE IS WITH REGARD TO THE ORDER OF C IT(A) CONFIRMING THE ACTION OF AO IN TAXING T HE RECEIPT FROM BPL MOBILE COMMUNICATION LTD UNDER THE HEAD PROFIT AND GAINS OF BUSINESS AS AGAINST DECLARED BY THE ASSESSEE AS INCOME FROM HOUSE PROPERTY. THE GROUND RAISED BY THE ASSESSEE READS AS UNDER: 1.3 THE LD.CIT(A) E RRED IN CONFIRMING THE ACTION OF AO IN TAXING THE RENTAL INCOME OF RS.9,56,211/ - RECEIVED FROM M/S BPL MOBILE COMMUNICATION LTD UNDER THE HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSION INSTEAD OF UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 6 . BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CO - OPERATIVE HOUSING SOCIETY ENTERED INTO AN AGREEMENT WITH BPL MOBILE COMMUNICATION LTD FOR INSTALLATION OF TELECOMMUNICATION TOWER ON THE TERMS AND CONDITIONS LAID DOWN IN THE AGREEMENT AT AN ANNUAL RENT OF RS.9,56,211/ - . THIS TOWER IS INSTALLED ON THE TERRACE OF THE ASSESSEES BUILDING. THE AO TREATED THIS INCOME AS BUSINESS INCOME. AGGRIEVED BY THE ORDER OF AO , THE ASSESSEE PREFERRED AN APPEAL BEFORE THE C IT(A), WHO ALSO CONFIRMED THE ACTI ON OF THE AO. AGGRIEVED, THE ASSESSEE HAS FILED THIS SECOND APPEAL BEFORE THE TRIBUNAL . 7 . AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF MATRU ASHISH CO - OPERATIVE HOUSING SOCIETY LTD V/ S ITO (2012) 144 TTJ 446 (MUM - TRIB), WHEREIN EXACTLY ON IDENTICAL FACTS RELATING TO INSTALLATION OF TELECOMMUNICATION TOWER AND THE INCOME FROM 5 563/M/2013,562/M/2013 5202/M/2013 AND 564/M/2013 LETTING OUT OF THE TERRACE HAD TO BE ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY SUBJECT TO DEDUCTION U/S 24 OF THE ACT AS AGAINST INCOME FROM OTHER SOURCES AS ASSESSED BY THE AO. THE OBSERVATION OF THE TRIBUNAL ARE AS UNDER(PARA 6 & 7 ): 6. HAVING CAREFULLY HEARD THE SUBMISSION OF THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSING THE MATERIAL AVAILA BLE ON RECORD WE FIND THAT THE FACTS ARE NOT IN DISPUTE. WE FURTHER FIND THAT THE ISSUE IS COVERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE BY THE ORDERS OF THE TRIBUNAL. IN THE CASE OF SHARDA CHAMBER PREMISES V. ITO IN ITA NO. 1234/MUM/2008, DT. 1ST SEPT., 2009 FOR ASST. YR. 2003 - 04 IN WHICH JM WAS ONE OF THE PARTY, ON THE SIMILAR FACTS, THE TRIBUNAL AFTER CONSIDERING THE DECISION IN ITO V. CUFFE PARADE SAINARA PREMISES CO - OPERATIVE SOCIETY LTD. ITA NO. 7225/MUM/2005, DT. 28TH APRIL, 2008 FOR ASST . YR. 2002 - 03 AND ALSO THE DECISION IN THE CASE OF S. SOHAN SINGH V. ITO [1986] 16 ITD 272 (DELHI) HAS HELD VIDE PARAS 6 AND 7 OF ITS ORDER DT. 1ST SEPT., 2009 AS UNDER : '6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND MERIT IN THE PLEA OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT IN THE CASE OF M/S DALAMAL HOUSE COMMERCIAL COMPLEX - PREMISES CO - OP ERATIVE SOCIETY LTD., THE TRIBUNAL WHILE ADMITTING THE ADDITIONAL GROUND BEING A LEGAL ISSUE HAS ALSO HELD THAT THE LETTING OUT OF THE TERRACE, ERECTION OF ANTENNA AND INCOME DERIVED FROM LETTING OUT HAS TO BE TAXED AS 'INCOME FROM HOUSE PROPERTY' AND NOT AS 'INCOME FROM OTHER SOURCES'. THE TRIBUNAL WHILE DECIDING THE ISSUE HAS FOLLOWED THE ORDER OF THE TRIBUNAL IN THE CASE OF CUFFE PARADE SAINARA PREMISES CO - OP. SOCIETY LTD. (SUPRA). 7. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGHT ON RECORD BY THE REVENUE WE, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL (SUPRA), AND KEEPING IN VIEW THE CONSISTENCY WHILE ADMITTING THE ADDITIONAL GROUND TAKEN BY THE ASSESSEE HOLD THAT THE LETTING OUT OF TERRACE HAS TO BE ASSESSED UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' AS AGAINST 'INCOME FROM OTHER SOURCES' ASSESSED BY THE AO AND ALSO ALLOW DEDUCTION PROVIDED UNDER S. 24 OF THE ACT AND ACCORDINGLY THE ADDITIONAL GROUND TAKEN BY THE ASSESSEE IS ALLOWED.' 6 563/M/2013,562/M/2013 5202/M/2013 AND 564/M/2013 RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL (SUPRA), WE ARE OF THE VIEW THAT THE LETTING OUT OF THE TERRACE HAS TO BE ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY SUBJECT TO DEDUCTION UNDER S. 24 OF THE ACT AS AGAINST INCOME FROM OTHER SOURCES ASSESSED BY THE AO. WE HOLD AND ORDER ACCORDINGLY. THE GRO UND TAKEN BY THE ASSESSEE IS, THEREFORE, ALLOWED. WHEN THIS WAS PUT TO THE LD.DR, HE ONLY RELIED ONLY ON THE ORDERS OF LOWER AUTHORITIES. 8. WE HAVE GONE THROUGH THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF MATRU ASHISH CO - OPERATIVE HOUSING SOCIETY LTD (SUPRA) , WHICH IS EXACTLY ON IDENTICAL FACTS DECIDED THE ISSUE THAT T HE INCOME OF THE ASSESSEE - SOCIETY IS TO BE ASSESSED AS INCOME FROM HOUSE PROPERTY AND NOT BUSINESS INCOME. ACCORDINGLY, RESPECTFULLY FOLLOWING THE DECISION OF COORDINA TE BENCH, WE ARE OF THE VIEW THAT THE ASSESSEE HAS RIGHTLY TREATED THE INCOME FROM PROPERTY, AND WE HOLD SO. THE APPEAL OF THE ASSESSEE IS ALLOWED. 9 . IN THE APPEAL BEING I.T.A. NO.562/MUM/2013, THE ASSESSEE HAS CHALLENGED THE IMPOSITION OF PENALTY BY THE AO U/S 271(1)(C) AND CONFIRMED BY THE CIT(A). 1 0 . SINCE, WE HAVE DIRECTED THE AO TO DELETE QUANTUM ADDITION VIDE OUR ORDER PASSED IN ITA NO.563/MUM/2013, THE PENALTY IMPOSED ON THE ADDITION DO NOT HAVE LEGS TO STAND. WE ALSO FIND FROM THE TRIBUNAL ORDER OF MUMBAI BENCH IN ASSESSEES OWN CASE IN ITA NO.7594/MUM/2013 (AY - 2005 - 06) DATED 16.12.2015, ON THE SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE, THE AO HAD IMPOSED PENALTY, CONFIRMED BY THE CIT(A) AND TRIBUNAL DIRECTED THE AO TO DELETE THE SAME. RESPECTF ULLY FOLLOWING THE DECISION IN ASSESSEES OWN CASE AND TO MAINTAIN 7 563/M/2013,562/M/2013 5202/M/2013 AND 564/M/2013 CONSISTENCY WITH THE TRIBUNAL ORDER, WE DIRECT THE AO TO DELETE THE IMPUGNED PENALTY. 11 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. 12 . IN I.T.A. NO.564/MUM/2013, THE ASSESSEE HA S CHALLENGED THE PENALTY IMPOSED BY THE AO AND CONFIRMED BY THE CIT(A) AMOUNTING TO RS.2,53,810/ - . 13 . SINCE, IN QUANTUM APPEAL, WE HAVE CONSIDERED THE ISSUE OF DELAY CONDONATION AND CONDONE THE DELAY BEFORE THE CIT(A) AND SET ASIDE THE ISSUE BACK TO THE FILE OF THE CIT(A). T HEREFORE, THE IMPOSITION PENALTY U/S 271(1)( C) WOULD AUTOMATICALLY NULLIFY. THEREFORE, THIS APPEAL BECOMES INFRUCTUOUS. ACCORDINGLY, WE DISMISS THE SAME AS INFRUCTUOUS. 14 . IN SUM AND SUBSTANCE, QUANTUM APPEAL FOR THE ASSESSMENT YEAR 2006 - 07 IS ALLOWED FOR STATISTICAL PURPOSES, QUANTUM APPEAL FOR THE ASSESSMENT YEAR 2008 - 09 STANDS ALLOWED AND PENALTY APPEALS OF THE ASSESSEE FOR BOTH THE YEARS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 02 ND JUNE , 201 6 . SD SD ( RAJESH KUMAR) ( MAHAVIR SINGH ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 02 . 0 6 .2016 SR.PS:SRL: 8 563/M/2013,562/M/2013 5202/M/2013 AND 564/M/2013 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, TRUE COPY [ / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI