ACIT 10(1), MUMBAI V. INTERNATIONAL BIOTECH PARK LTD, MUMBAI

ITA 5902/MUM/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8075 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 15-09-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 27-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK BATRA
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH I, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 5902/MUM/2012 ASSESSMENT YEAR: 2009-10 ACIT 10(1) MUMBAI VS. M/S. INTERNATIONAL BIOTECH PARK LTD. 5 TH FLOOR, METROPOLITAN BUILDING, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI- 400 051 (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :- AABCI 1236 J ASSESSEE BY : SHRI NIRAJ SHETH REVENUE BY : SHRI VIVEK BATRA DATE OF HEARING : 15.09.2014 DATE OF PRONOUNCEMENT : 15.09.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE LD.CIT(A)-21, MUMBAI DATED 01.06.2012 FOR THE ASSES SMENT YEAR 2009-10. 2. IN GROUNDS NO. 1 AND 2, THE REVENUE HAS AGITATED THE DECISION OF THE LD.CIT(A) IN HOLDING THAT THE INCOME ON SUB LEASE O F LAND AND THE MAINTENANCE INCOME UNDER THE HEAD BUSINESS INCOME AND ALLOWING OF VARIOUS EXPENSES, INCLUDING THE MAINTENANCE INCOME CLAIMED BY THE ASSESSEE AS B USINESS EXPENSES AS AGAINST THE FINDINGS OF THE AO THAT NO BUSINESS ACTIVITY HA S BEEN CARRIED OUT BY THE ASSESSEE AND THE CONSEQUENT DISALLOWANCE OF THE EXPENSES. 2.1 THE RELEVANT FACTS ARE THAT THE ASSESSEE, A COM PANY ENGAGED IN THE BUSINESS OF DEVELOPERS OF BIOTECH PARK, CONSTRUCTION, LEASIN G AND SALE OF COMMERCIAL PROPERTIES, IN ITS RETURN HAD DECLARED A BUSINESS L OSS OF RS.3,80,55,754/-, INCOME FROM HOUSE PROPERTY AT RS.38,17,890/- AND INCOME FR OM OTHER SOURCES AT RS.26,16,171/- AND SET OFF THE SAID BUSINESS LOSS A GAINST THE SUCH INCOME. IN THE ASSESSMENT FRAMED, THE AO WAS OF THE VIEW THAT IN T HE ABSENCE OF BUSINESS ACTIVITY, ITA NO. 5902/MUM/2012 M/S. INTERNATIONAL BIOTECH PARK LTD. ASSESSMENT YEAR: 2009-10 2 THE ASSESSEE WAS NOT ENTITLED TO CLAIM THE BUSINESS LOSS. ALSO, THE AO HELD THAT THE EXPENDITURE CLAIMED BY THE ASSESSEE WERE TO BE CAPI TALIZED. ON APPEAL, THE LD.CIT(A) BY RELYING ON HIS OWN ORDERS FOR THE EARL IER A.YS. 2006-07, 2007-08 AND 2008-09, HAD OBSERVED THAT THE ASSESSEES BUSINESS FOR DEVELOPMENT OF BIO TECHNOLOGY PARK WAS ALREADY SET UP AND COMMENCED AN D THEREFORE HELD THAT THE SUB LEASE INCOME (APART FROM THE RENTAL INCOME) WAS ASS ESSABLE AS BUSINESS INCOME. ALSO, THE MISCELLANEOUS INCOME WAS ASSESSABLE UNDER THE HEAD BUSINESS INCOME. ACCORDINGLY, THE LD.CIT(A) DIRECTED THE AO TO ASSES SEE THE INCOME ON SUB LEASE OF LAND (APART FROM RENTAL INCOME) AND MAINTENANCE INC OME UNDER THE HEAD BUSINESS INCOME. CONSEQUENTLY, THE LD.CIT(A), FURTHER DIRECT ED THE AO TO ALLOW VARIOUS EXPENSES CLAIMED BY THE ASSESSEE TO THE P/L ACCOUNT . AGGRIEVED BY THE IMPUGNED DECISION, THE REVENUE HAS RAISED THESE GROUNDS IN T HE APPEAL BEFORE US. 2.2 HAVING HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL ON RECORD, IT IS PERTINENT TO MENTION THAT THE TRIBUNAL, VIDE ITS OR DER DATED 07.05.2014, HAS CONFIRMED THE EARLIER ORDERS OF THE FIRST APPELLATE AUTHORITY FOR THE A.YS. 2007-08 AND 2008-09 AND SIMILAR GROUNDS PREFERRED BY THE REVENU E HAVE BEEN DISMISSED BY TRIBUNAL ON IDENTICAL FACTS. THE TRIBUNAL, FOR SAID ORDER, IN TURN, HAS RELIED ON THE EARLIER ORDER OF THE TRIBUNAL DATED 11.09.2013 FOR THE A.Y. 2005-06, WHEREIN IT HAS BEEN HELD THAT THE ASSESSEE HAS COMMENCED ITS BUSIN ESS ACTIVITY IN MARCH, 2004. IN VIEW OF THE FACT THAT THE LD.CIT(A) HAS RELIED ON H IS OWN ORDERS FOR THE EARLIER ASSESSMENT YEARS, WHICH HAS BEEN CONFIRMED BY THE T RIBUNAL, AND ALSO SINCE THE REVENUE IS NOT IN A POSITION TO BRING ANY CONTRADIC TORY FACTS DURING THE YEAR UNDER CONSIDERATION, WE DO NOT FIND ANY JUSTIFIABLE REASO N TO INTERFERE WITH THE DECISION OF THE LD.CIT(A) AND THUS THE SAME DESERVES TO BE UPHE LD. RESULTANTLY, GROUNDS NO. 1 AND 2 ARE DISMISSED. 3. IN GROUND NO. 3, THE REVENUE HAS AGITATED THE DE CISION OF THE LD.CIT(A) IN DELETING THE ADDITION MADE BY THE AO IN RESPECT OF INTEREST ON BORROWED CAPITAL UTILIZED FOR CONSTRUCTION OF PROPERTY. 3.1 AT THE OUTSET IT IS OBSERVED THAT THE LD.CIT(A) , BY FOLLOWING HIS OWN ORDER FOR THE A.Y. 2008-09, ON THE SIMILAR ISSUE, HAS DELETED THE ADDITION MADE BY THE AO. THE SAID DECISION OF THE LD.CIT(A) HAS BEEN CONFIRM ED BY THE TRIBUNAL. THE TRIBUNAL, ITA NO. 5902/MUM/2012 M/S. INTERNATIONAL BIOTECH PARK LTD. ASSESSMENT YEAR: 2009-10 3 IN THE SAID ORDER, HAS HELD THAT IF INTEREST HAS BE EN PAID BY AN ASSESSEE FOR ACQUIRING OR CONSTRUCTION ASSETS THAT ARE USED FOR EARNING TA XABLE INCOME THEN HIS CLAIM FOR INTEREST EXPENDITURE HAS TO BE ALLOWED. THE RELEVAN T FINDING OF THE TRIBUNAL IS AT PARA 15 OF THE SAID ORDER. SINCE THE DECISION OF TH E LD.CIT(A) FOR THE A.Y. 2008-09, WHICH HAS BEEN RELIED ON BY HIM FOR THE IMPUGNED DE CISION HAS BEEN UPHELD BY THE TRIBUNAL, WE DO NOT FIND ANY JUSTIFIABLE REASON TO INTERFERE WITH THE IMPUGNED DECISION, WHICH DESERVES TO BE UPHELD. ACCORDINGLY, WE DECIDE THIS ISSUE AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. RESULTANTLY, GROUND NO. 3 IS DISMISSED . 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF SEPTEMBER, 2014. SD/- SD/- (B.R. BASKARAN) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 15.09.2014. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR I BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.