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

ITA 5909/MUM/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0638 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 30-04-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 04-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NEERAJ SHETH
• Keywords: Business income; Business expenditure

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER . / ITA NO.5909/MUM/2013 / ASSESSMENT YEAR 2010-11 THE DCIT -10(1), AAYKAR BHAVAN, MK ROAD, MUMBAI 400 020 / VS. M/S. INTERNATIONAL BIOTECH PARK LTD., 5 TH FLOOR, METROPOLITAN BUILDING, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI 400051. ./ ./ PAN/GIR NO. : AABCI 1236J ( / APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY SHRI SACHHIDANAND DUBEY RESPONDENT BY SHRI NEERAJ SHETH ! ' / DATE OF HEARING : 27/05/2015 ! ' / DATE OF PRONOUNCEMENT : 27/05/2015 / O R D E R PER I.P.BANSAL, J.M: THIS IS AN APPEAL FILED BY THE REVENUE AND IT IS DIRECTED AGAINST ORDER PASSED BY LD. CIT(A)-21 DATED 30/7/2013 FOR ASSESSM ENT YEAR 2010-11. GROUNDS OF APPEAL READ AS UNDER: 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT INCOME ON SUB -LEASE O F LAND AND MAINTENANCE INCOME UNDER THE HEAD 'BUSINESS INCOME' AND ALLOWIN G VARIOUS BUSINESS EXPENSES CLAIMED BY THE ASSESSEE IN ABSENCE OF ANY BUSINESS ACTIVITY.' 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN ~ LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION IN RESPECT OF INTEREST ON BORROWED CAPITAL UTILIZED FOR CONSTRUCTION OF PROPERTY.' . / ITA NO.5909/MUM/2013 / ASSESSMENT YEAR 2010-11 2 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, VARY, OMIT OR SUBSTITUTE ANY OF THE AFORESAID GROUNDS OF APPEAL AT ANY TIME BEFO RE OR AT THE TIME OF HEARING OF APPEAL. 2. AT THE OUTSET IT WAS SUBMITTED BY LD. AR THAT TH E ISSUES RAISED BY THE REVENUE IN THE PRESENT APPEAL ARE COVERED IN FAVOUR OF THE ASSESSEE BY THE FOLLOWING EARLIER ORDERS OF THE TRIBUNAL IN THE CAS E OF ASSESSEE ITSELF. ASSESSMENT YEAR PARTICULARS OF ORDER DATE OF ORDER. 2005-06 ITA NO.3322/MUM/2010 11/09/2013 2006-07 ITA NO.224/MUM/2010 23/11/2012 2007-08 ITA 401/MUM/2011 & 6829/MUM/2011 07/05/2014 2009-10 ITA 5902/MUM/2012 15/09/2014 2.1 FOR COMPLETENESS OF FACTS DECISION OF THE TRIBU NAL THE OBSERVATION OF THE TRIBUNAL IN THE LATEST ORDER PASSED FOR 2009-10 ARE REPRODUCED BELOW: 2. IN GROUNDS NO. 1 AND 2, THE REVENUE HAS AGITATE D THE DECISION OF THE LD.CIT(A) IN HOLDING THAT THE INCOME ON SUB LEASE OF LAND AND TH E MAINTENANCE INCOME UNDER THE HEAD BUSINESS INCOME AND ALLOWING OF VARIOUS EXPENSES, I NCLUDING THE MAINTENANCE INCOME CLAIMED BY THE ASSESSEE AS BUSINESS EXPENSES AS AGA INST THE FINDINGS OF THE AO THAT NO BUSINESS ACTIVITY HAS BEEN CARRIED OUT BY THE ASSES SEE AND THE CONSEQUENT DISALLOWANCE OF THE EXPENSES. 2.1 THE RELEVANT FACTS ARE THAT THE ASSESSEE, A CO MPANY ENGAGED IN THE BUSINESS OF DEVELOPERS OF BIOTECH PARK, CONSTRUCTION, LEASING A ND SALE OF COMMERCIAL PROPERTIES, IN ITS RETURN HAD DECLARED A BUSINESS LOSS OF RS.3,80,55,7 54/-, INCOME FROM HOUSE PROPERTY AT RS.38,17,890/- AND INCOME FROM OTHER SOURCES AT RS. 26,16,171/- AND SET OFF THE SAID BUSINESS LOSS AGAINST THE SUCH INCOME. IN THE ASSES SMENT FRAMED, THE AO WAS OF THE VIEW THAT IN THE ABSENCE OF BUSINESS ACTIVITY, THE ASS ESSEE WAS NOT ENTITLED TO CLAIM THE BUSINESS LOSS. ALSO, THE AO HELD THAT THE EXPENDITU RE CLAIMED BY THE ASSESSEE WERE TO BE CAPITALIZED. ON APPEAL, THE LD.CIT(A) BY RELYING ON HIS OWN ORDERS FOR THE EARLIER 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 AND THEREFORE HELD THAT THE SUB LEASE INCOME (APART FROM THE RENT AL INCOME) WAS ASSESSABLE AS BUSINESS INCOME. ALSO, THE MISCELLANEOUS INCOME WAS ASSESSAB LE 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 INCOME U NDER THE HEAD BUSINESS INCOME. CONSEQUENTLY, THE LD.CIT(A), FURTHER DIRECTED THE A O TO ALLOW VARIOUS EXPENSES CLAIMED BY THE ASSESSEE TO THE P/L ACCOUNT. AGGRIEVED BY THE I MPUGNED DECISION, THE REVENUE HAS RAISED THESE GROUNDS IN THE 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 ORDER DATED 07. 05.2014, HAS CONFIRMED THE EARLIER ORDERS OF THE FIRST APPELLATE AUTHORITY FOR THE A.Y S. 2007-08 AND 2008-09 AND SIMILAR GROUNDS PREFERRED BY THE REVENUE HAVE BEEN DISMISSE D BY TRIBUNAL ON IDENTICAL FACTS. THE TRIBUNAL, FOR SAID ORDER, IN TURN, HAS RELIED O N THE EARLIER ORDER OF THE TRIBUNAL DATED . / ITA NO.5909/MUM/2013 / ASSESSMENT YEAR 2010-11 3 11.09.2013 FOR THE A.Y. 2005-06, WHEREIN IT HAS BEE N HELD THAT THE ASSESSEE HAS COMMENCED ITS BUSINESS ACTIVITY IN MARCH, 2004. IN VIEW OF THE FACT THAT THE LD.CIT(A) HAS RELIED ON HIS OWN ORDERS FOR THE EARLIER ASSESSMENT YEARS, WHICH HAS BEEN CONFIRMED BY THE TRIBUNAL, AND ALSO SINCE THE REVENUE IS NOT IN A POSITION TO BRING ANY CONTRADICTORY FACTS DURING THE YEAR UNDER CONSIDERATION, WE DO NO T FIND ANY JUSTIFIABLE REASON TO INTERFERE WITH THE DECISION OF THE LD.CIT(A) AND TH US THE SAME DESERVES TO BE UPHELD. 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 B ORROWED 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 ADDI TION MADE BY THE AO. THE SAID DECISION OF THE LD.CIT(A) HAS BEEN CONFIRMED BY THE TRIBUNAL. THE TRIBUNAL, IN THE SAID ORDER, HAS HELD THAT IF INTEREST HAS BEEN PAID BY A N ASSESSEE FOR ACQUIRING OR CONSTRUCTION ASSETS THAT ARE USED FOR EARNING TAXABLE INCOME THE N HIS CLAIM FOR INTEREST EXPENDITURE HAS TO BE ALLOWED. THE RELEVANT FINDING OF THE TRIB UNAL IS AT PARA 15 OF THE SAID ORDER. SINCE THE DECISION OF THE LD.CIT(A) FOR THE A.Y. 20 08-09, WHICH HAS BEEN RELIED ON BY HIM FOR THE IMPUGNED DECISION HAS BEEN UPHELD BY THE TR IBUNAL, WE DO NOT FIND ANY JUSTIFIABLE REASON TO INTERFERE WITH THE IMPUGNED DECISION, WHI CH DESERVES TO BE UPHELD. ACCORDINGLY, WE DECIDE THIS ISSUE AGAINST THE REVENUE AND IN FAV OUR OF THE ASSESSEE. RESULTANTLY, GROUND NO. 3 IS DISMISSED. 3. LD. DR DID NOT CONTROVERT TO THE AFOREMENTIONED SUBMISSIONS OF LD. AR. 4. IN THIS VIEW OF THE SITUATION, AFTER HEARING BOT H THE PARTIES, RESPECTFULLY FOLLOWING THE AFOREMENTIONED DECISION OF THE TRIBUN AL WE DISMISS THE REVENUES APPEAL. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/05/201 5 () * + 27/05/2015 ( , / RAJENDRA) ( . . / I.P. BANSAL) / ACCOUNTANT MEMBER / JUDICIAL MEMBER ( MUMBAI; * DATED 27/05/2015 . / ITA NO.5909/MUM/2013 / ASSESSMENT YEAR 2010-11 4 ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. .! ( ) / THE CIT(A)- 4. .! / CIT 5. /0 !12 , ' 12 , ( / DR, ITAT, MUMBAI 6. 3 / GUARD FILE. / BY ORDER, /! ! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ( / ITAT, MUMBAI . . ./ VM , SR. PS