Appeal Details
Counselvise Citation
[2016] 132 COUNSELVISE.COM (IT) 2967 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 9 month(s) 5 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
29-06-2016
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Next Hearing Date
01-04-2016
Assessment Year
2009-2010
Appeal Filed On
24-09-2012
Judgement Text
, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUM BAI . . , , !' #$, % , & BEFORE SHRI R.C.SHARMA, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.5839/MUM/2012 ( %' ( / ASSESSMENT YEAR: 2009-10) NATIONAL REALTY PRIVATE LIMITED 11-16 ASHOKA SHOPPING CENTRE, LOKMANYA TILAK MARG, NEAR G T HOSPITAL, MUMBAI - 400001 ' / VS. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 5(2) R.NO.525, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI - 400020 ./ ./ PAN/GIR NO. : AAACN1433D ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 01.04.2016 !' /DATE OF PRONOUNCEMENT: 29.06.2016 #$ / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER DATED 06.08.2012 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) 9, ASSESSEE BY: SHRI VIPUL JOSHI & NISHIT GANDHI DEPARTMENT BY: SHRI SUMIT KUMAR & N. P. SINGH ITA NO.5839/M/2012 A.Y. 2009-10 2 MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO THE A.Y.2009-10. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- I. THE APPELLANT SUBMITS THAT THE HONBLE COMMISS IONER OF INCOME TAX (APPEALS) 9, MUMBAI (HEREINAFTER REFERRE D TO AS THE CIT(A)) ERRED IN UP-HOLDING THE ACTION OF THE LEARNED DEPUTY COMMISSIONER OF INCOME-TAX (HEREINAF TER REFERRED TO AS DCIT) IN TREATING, COMPUTING AND A SSESSING THE INCOME RECEIVED FROM PROVIDING AMENITIES AND SE RVICES CHARGES AS INCOME FROM HOUSE PROPERTY INSTEAD OF COMPUTING AND ASSESSING IT UNDER THE HEAD PROFIT & GAINS FROM BUSINESS. II. FURTHER, AS A RESULT THEREOF, THE HONBLE CIT(A ) ALSO ERRED IN UP-HOLDING THE ACTION OF THE LEARNED DCIT IN DIS ALLOWING DEPRECIATION OF RS.46,75,819/- ON THE ASSETS ACQUIR ED AND USED TO EARN THE AMENITIES INCOME. III. THE HONBLE CIT(A) ERRED IN UP-HOLDING THE ACT ION OF THE LEARNED DCIT IN DISALLOWING NORMAL AND REGULAR BUSI NESS EXPENSES OF RS.26,96,576/- ON THE GROUND THAT NO BU SINESS WAS CARRIED ON BY THE APPELLANT DESPITE THE FINDING OF FACT THAT THE APPELLANT CARRIED ON THE BUSINESS OF LEASI NG OF PROPERTIES AND OTHER ASSETS. IV. WITHOUT PREJUDICE TO THE GROUND I ABOVE, IF IT IS HELD THAT INCOME FROM AMENITIES CANNOT BE TAXED UNDER THE HEA D PROFIT & GAINS FROM BUSINESS, THEN, THE HONBLE C IT(A) ERRED IN UP-HOLDING THE ACTION OF THE LEARNED DCIT IN TREATING, COMPUTING AND ASSESSING THE INCOME RECEIV ED FROM PROVIDING AMENITIES AS INCOME FROM HOUSE PROP ERTY INSTEAD OF COMPUTING AND ASSESSING IT UNDER THE HEA D INCOME FROM OTHER SOURCE AFTER ALLOWING DEDUCTION OF DEPRECIATION OF RS.46,75,819/- ON THE ASSETS USED F OR RENDERING THE AMENITIES U/S.57 OF THE ACT. V. THE APPELLANT PRAYS THAT ORDER OF HONBLE CIT(A) , BEING CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE , AS WELL AS IN LAW, BE SET ASIDE IN VIEW OF THE GROUNDS OF A PPEAL STATED AT NOS. I TO IV. VI. THE APPELLANT PRAYS FOR APPROPRIATE RELIEF. ITA NO.5839/M/2012 A.Y. 2009-10 3 ADDITIONAL GROUNDS:- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LICENSE FEE / COMPENSATION OF RS.12,73,37,632/- EAR NED BY THE APPELLANT WAS REQUIRED TO BE TAXED UNDER THE HEAD PROFIT AND GAINS OF BUSINESS INSTEAD OF THE HEAD INCOME FROM HOUSE PROPERTY AND CONSEQUENTLY, 2. WITHOUT PREJUDICE TO THE ABOVE, THE INCOME FROM LIC ENSE FEE AND AMENITIES CONCERNING AT LEAST THE THREE PROPERT IES WAS REQUIRED TO BE TAXED UNDER THE HEAD PROFITS & GAI NS OF BUSINESS OR PROFESSION. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED THE RETURN OF INCOME DECLARING TOTAL INCOME TO THE TUNE OF RS. 80,52,729/- ON 11.09.2009. THE RETURN WAS PROCESSED U/S.143(1) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THEREAFTER, THE CA SE WAS SELECTED FOR SCRUTINY AND NOTICE U/S.143(2) OF THE ACT WAS ISSUE D ON 24.08.2010 AND SERVED UPON THE ASSESSEE. SUBSEQUENTLY STATUTOR Y NOTICE U/S.142(1) OF THE ACT ALONG WITH QUESTIONNAIRE DATED 14.07.201 1 WAS ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF LEASING OF PROPERTIES AND OTHER ASSETS AND HAS SHOW N INCOME FROM HOUSE PROPERTY, CAPITAL GAINS AND DIVIDEND INCOME. IN THE INSTANT CASE THE ASSESSEE HAS CLAIMED THE COMPENSATION FOR AMENI TIES AS BUSINESS INCOME WHICH WAS TREATED BY THE ASSESSING OFFICER A S RENTAL INCOME AND ACCORDINGLY THE ASSESSMENT WAS COMPLETED, THERE AFTER THE ASSESSEE WENT UP IN APPEAL WHERE CIT(A) CONFIRMED THE ORDER PASSED BY THE ASSESSING OFFICER. FEELING AGGRIEVED THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. ITA NO.5839/M/2012 A.Y. 2009-10 4 ISSUE NO.1 AND 2:- 4. ACCORDING TO ISSUE NO.1 &2 THE CLAIM OF THE ASSE SSEE IS THAT THE COMPENSATION FOR AMENITIES IS BUSINESS INCOME AND C ANNOT BE TREATED AS RENTAL INCOME. ON APPRAISAL OF ORDER OF THE INC OME TAX APPELLATE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE A.Y.200 5-06, THE CONTENTION OF THE ASSESSEE HAS BEEN DECLINED AND TH E COMPENSATION FOR AMENITIES HAS BEEN TREATED AS RENTAL INCOME. THE S AID ORDERS ALSO SPEAKS THAT THE MATTER OF CONTROVERSY IS PENDING BE FORE HONBLE BOMBAY HIGH COURT FOR DISPOSAL. THE HONBLE TRIBUN AL HAS DECIDED THE MATTER OF CONTROVERSY ON THE BASIS OF CALCUTTA HIGH COURT, IN CASE TITLED AS COMMISSIONER OF INCOME TAX VS. SHAMBHU IN VESTMENT PVT. LTD. [2001] 249 ITR 47. THE REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE MATTER OF CONTROVERSY HAS NOW BEEN ADJUDI CATED BY THE HONBLE SUPREME CASE IN CASE OF CHENNAI PROPERTIES & INVESTMENT LTD. VS. CIT [2015] 373 ITR 0673 (SC). HOWEVER, ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS REFUTED THE SAID CONTENTIONS. IN THE INSTANT CASE THE ASSESSEE FILE D THE RETURN OF INCOME BY DECLARING THE RENTAL INCOME FROM HOUSE PROPERTY TO THE TUNE OF RS.12,73,37,632/-. THE ASSESSEE ALSO RECEIVED THE COMPENSATION FROM AMENITIES TO THE TUNE OF RS.1,24,08,780/-. HOWEVER , THE SAID INCOME HAS BEEN CLAIMED BY THE ASSESSEE AS BUSINESS INCOME . THE HONBLE SUPREME COURT HAS OBSERVED IN THE ABOVE MENTIONED C ASE I.E. CHENNAI PROPERTIES & INVESTMENT LTD. (SUPRA) THAT WHERE IN THE TERMS OF ITA NO.5839/M/2012 A.Y. 2009-10 5 MEMORANDUM OF ASSOCIATION, THE MAIN OBJECT OF THE C OMPANY IS TO ACQUIRE THE PROPERTY AND TO EARN THE INCOME BY LE TTING OUT THE PROPERTY, THE SAID INCOME WAS BROUGHT TO TAX AS BUS INESS INCOME NOT AS INCOME FROM HOUSE PROPERTY. IN VIEW OF THE SAI D CIRCUMSTANCES WE ARE OF THE VIEW THAT THE MATTER OF CONTROVERSY IS R EQUIRED TO BE RE- EXAMINED / VERIFIED AFRESH IN VIEW OF THE OBSERVAT IONS OF THE HONBLE SUPREME COURT IN THE CASE OF CHENNAI PROPERTIES & I NVESTMENT LTD. (SUPRA). ACCORDINGLY, WE SET ASIDE THE FINDING OF THE LEARNED CIT(A) ON THIS ISSUE AND REMAND THE CASE TO THE ASSESSING OFFICER TO RE- CONSIDER THE MATTER OF CONTROVERSY IN VIEW OF THE G UIDELINES CONTAINED IN THE JUDGMENT OF HONBLE SUPREME COURT IN THE CAS E OF CHENNAI PROPERTIES & INVESTMENT LTD. (SUPRA). THE ASSESSIN G OFFICER WOULD PROVIDE THE REASONABLE AND PROPER OPPORTUNITY TO TH E ASSESSEE BEFORE PASSING THE ORDER IN THE INTEREST OF JUSTICE. 5. THE OTHER GROUND ARE RELATED TO THE FINDING OF T HE ASSESSING OFFICER WHILE DECIDING THE MATTER OF CONTROVERSY ON THE ADJUDICATION OF ISSUE NO.1&2 AS DECIDED ABOVE THEREFORE THESE I SSUES WOULD BE CONSEQUENTIAL RESULT THEREOF. ACCORDINGLY, WE ALSO SET ASIDE THESE ISSUES AND RESTORE TO THE FILE OF ASSESSING OFFICE R TO ADJUDICATE THE MATTER AFRESH IN THE LIGHT OF DECISION TAKEN BY HIM WHILE DECIDING THE ISSUE NO.1 &2. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ALLOWED FOR STATISTICAL PURPOSE . ITA NO.5839/M/2012 A.Y. 2009-10 6 ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JUNE , 2016. SD/- SD/- (R.C.SHARMA) (AMARJIT SINGH) # / ACCOUNTANT MEMBER %& # /JUDICIAL MEMBER ' ( MUMBAI; )# DATED : 29 TH JUNE, 2016 MP MP MP MP * +%'#, -,(' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. * ( ) / THE CIT(A)- 4. * / CIT 5. -./ &&01 , 01' , ' ( / DR, ITAT, MUMBAI 6. /34 5 / GUARD FILE. ' / BY ORDER, - & //TRUE COPY// ./$ ! /(DY./ASSTT. REGISTRAR) , ' ( / ITAT, MUMBAI
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