KILLICK EXPORTS LTD., MUMBAI V. ITO-8(2)(2), MUMBAI

ITA 5683/MUM/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49086 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 01-11-2010
• Assessment Year: 1999-2000
• Appeal Filed On: 23-10-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ALEXANDER CHANDY
• Assessee Lawyers: VIJAY C KOTHARI
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D : MUMBAI BEFORE SHRI D.MANMOHAN, VICE PRESIDENT AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA. NO. 5683/MUM/2009 ASSESSMENT YEAR 1990-2000 KILLICK EXPORTS LTD. MUMBAI 400 072 PAN AAACK8527B VS. ITO 8 (2) (2) MUMBAI - 20 (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI VIJAY C. KOTHARI FOR RESPONDENT : SHRI ALEXANDER CHANDY SR. D.R. ORDER PER D. MANMOHAN, V.P. 1. THIS APPEAL IS FILED AT THE INSTANCE OF THE ASS ESSEE- COMPANY AND IT PERTAINS TO THE ASSESSMENT YEAR 1999 -2000. 2. AT THE TIME OF HEARING, LEARNED COUNSEL, APPEAR ING ON BEHALF OF THE ASSESSEE, FAIRLY ADMITTED THAT THE MA IN ISSUE URGED IN THIS APPEAL STANDS SQUARELY COVERED IN FAVOUR OF TH E REVENUE AND AGAINST THE ASSESSEE BY THE DECISION OF THE ITAT, J BENCH, MUMBAI IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 1989-9 0 TO 1991-92 AS WELL AS 1991-92, 1992-93 AND 1996-97 AND 1997-98 (I TA. NO. 3270, 3271 & 3272/M/94 AND 7083/M/95, 7084/M/95 AND 81/M/ 2000 AND 415/M/2000). 3. FACTS IN SHORT ARE THAT A PROPERTY OWNED BY A P ARENT COMPANY WAS SUB-LET BY THE ASSESSEE TO SBI AND THE LEASE RENT RECEIVED FROM SBI WAS OFFERED TO TAX UNDER THE HEAD BUSINESS INCOME ; WHEREAS, THE ASSESSING OFFICER AS WELL AS THE CIT(A) NOTICED THAT IN THE GIVEN FACTS THE INCOME EARNED BY THE AS SESSEE IS ASSESSABLE TO TAX UNDER THE HEAD OTHER SOURCES. CONSISTENT W ITH THE VIEW TAKEN BY THE ITAT, J BENCH, MUMBAI IN ASSESSEES OWN CA SE FOR THE EARLIER YEARS WE HOLD THAT THE COMPENSATION RECEIVED FOR SU B-LETTING CANNOT 2 BE TERMED AS INCOME EARNED FROM BUSINESS AND IT WAS CORRECTLY ASSESSED BY THE ASSESSING OFFICER AS INCOME FROM O THER SOURCES. ACCORDINGLY, WE DISPOSE-OF GROUND NO.1. 2. VIDE GROUND NO.2, THE ASSESSEE CONTENDS THAT TH E CIT(A) WAS NOT JUSTIFIED IN GIVING SET-OFF OF THE BROUGHT FORWARD BUSINESS LOSSES OF EARLIER YEARS. LEARNED COUNSEL SUBMITTED THAT IN THE EVENT OF TREATING THE COMPENSATION AMOUNT AS INCOME FROM OT HER SOURCES CARRIED FORWARD BUSINESS LOSSES CANNOT BE SET-OFF A GAINST THE INCOME FROM OTHER SOURCES. UNDER THE CIRCUMSTANCES, WE RE JECT GROUND NO.2 OF THE ASSESSEE. 3. GROUND NO.3 IS ALSO CONSEQUENTIAL IN NATURE, AS ADMITTED BY THE ASSESSEE AND ACCORDINGLY WE REJECT GROUND NO .3. 4. VIDE GROUND NO.4, ASSESSEE CONTENDS THAT THE LE ARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE INITIATI ON OF PENALTY PROCEEDINGS UNDER SECTION 271 (1) (C) OF THE ACT. I T MAY BE NOTICED HERE THAT PENALTY PROCEEDINGS ARE INDEPENDENT PROCEEDING S AND ASSESSEE IS FREE TO SUBSTANTIATE WITH EVIDENCE AS TO WHY IT WAS NOT A FIT CASE FOR LEVY OF PENALTY. MERE ISSUANCE OF NOTICE UNDER SECT ION 274 OF THE ACT TO INITIATE PENALTY PROCEEDINGS UNDER SECTION 271 (1) (C) IS NOT APPEALLABLE, AND, AT ANY RATE, IT IS PREMATURE TO C ONSIDER THE ISSUE. WITH THESE OBSERVATIONS, GROUND NO.4 OF THE ASSESSE E IS REJECTED. 5. GROUND NO.5 IS GENERAL IN NATURE AND THEREFORE, IT DOES NOT REQUIRE INDEPENDENT CONSIDERATION. 6. IN THE RESULT, AS PRONOUNCED IN THE OPEN COURT, APPEAL FILED BY THE ASSESSEE-COMPANY IS DISMISSED. SD/- SD/- (T.R. SOOD) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATE 03 RD JUNE, 2011 VBP/- 3 COPY TO 1. KILLICK EXPORTS LTD., PLOT NO.7, CHANDIVALI FARM S ROAD, CHANDIVALI, MUMBAI 400 072. 2. I.T.O. 8 (2) (2), AAYAKAR BHAVAN, MUMBAI 20. 3. COMMISSIONER OF INCOME TAX (APPEALS)-VIII, MUMBA I 4. CIT-VIII, MUMBAI 5. DR D BENCH 6. GUARD FILE. (TRUE COPY) BY ORDER ASST. REGISTRAR, ITAT, MUMBAI BENCHES MUMBAI.