ACIT, Patiala V. M/s Maltex Malsters Limited, Patiala

ITA 592/CHANDI/2014

• Counselvise Citation: 59221514 RSA 2014
• Duration Of Justice: 1 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-10-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 04-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBHASH AGGARWAL
• Assessee Lawyers: S K MITTAL
• Keywords: Business income; Tax effect

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO. 576/CHD/2014 ASSESSMENT YEAR: 2010-11 M/S MALTEX MALSTERS LTD., VS. THE ITO, WARD-4, PATIALA LUDHIANA PAN NO. AAACM987C & ITA NO. 592/CHD/2014 ASSESSMENT YEAR: 2010-11 THE ACIT, CIRCLE, VS. M/S MALTEX MALSTERS LTD., PATIALA PATIALA PAN NO. AAACM987C (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUBHASH AGGARWAL RESPONDENT BY : SH. S.K.MITTAL DATE OF HEARING : 01.10.2015 DATE OF PRONOUNCEMENT : 26.10.2015 ORDER PER H.L.KARWA, VP ITA NO. 576/CHD/2014 ASSESSEES APPEAL THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), PATIALA, DATED 31.3.2014 RELATING TO ASSESSMENT YEA R 2010-11. 2 2. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE IN THIS APPEAL READS AS UNDER:- THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE OR DER OF THE ASSESSING OFFICER THAT PROCESSING INCOME IS INCOME FROM LEASE INCOME AND THE SAME IS TO BE ASSESSED AS INCOME FRO M OTHER SOURCES AND THEREBY FURTHER ERRED IN NOT ALLOWING T HE EXPENSES INCURRED BY EARNING THE PROCESSING INCOME. 3. THE ASSESSEE HAS SHOWN LEASE INCOME OF RS. 51,51 ,579/- UNDER THE HEAD BUSINESS & PROFESSION . THE LOWER AUTHORITIES TRE ATED THE INCOME TAXABLE UNDER THE HEAD INCOME FROM OTHER SOURCES. 4. AFTER HEARING LD. REPRESENTATIVES OF BOTH THE PA RTIES, WE FIND THAT ISSUE IS SQUARELY COVERED AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE BY THE DECISION OF THIS BENCH OF THE TRIBUNAL DATED 26.9.2 011 PASSED IN ASSESSEES OWN CASE IN ITA NO. 806/CHD/2011 AND C.O. NO. 72/CHD/20 11 RELATING TO ASSESSMENT YEAR 2008-09. WHILE DECIDING A SIMILAR ISSUE, THE TRIBUNAL IN ASSESSMENT YEAR 2008-09 VIDE ITS ORDER IN CROSS OBJECTION NO. 72/CH D/2011 HELD AS UNDER:- 6. THE ONLY GROUND RAISED BY THE ASSESSEE IN THE C ROSS OBJECTIONS READS AS UNDER:- THAT THE LD. CIT(A), PATIALA HAS ERRED IN HOLDING T HAT THE LEASE INCOME OF RS. 62,87,306/- IS INCOME FROM OTHE R SOURCES AS AGAINST BUSINESS INCOME SHOWN BY THE ASSESSEE. 7. AT THE TIME OF HEARING, SHRI SUBHASH AGGARWAL, L D. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE RAISED IN TH E PRESENT CROSS OBJECTION IS COVERED BY THE ORDER OF THE TRIBUNAL I N THE CASE OF ASSESSEE IN C.O. NO. 7/CHD/2011 (IN ITA NO. 1393/CH D/2010) RELATING TO ASSESSMENT YEAR 2007-08. WHILE DECIDING A SIMIL AR ISSUE, THE TRIBUNAL VIDE ORDER DATED 13.5.2011 IN C.O. NO. 7/C HD/2011 HELD AS UNDER:- 10. WE FIND THAT SIMILAR ISSUES WERE ADJUDICATED U PON BY THE TRIBUNAL IN PARAS 4 TO 5 OF ITS ORDER DATED 31. 3.2010 IN THE 3 CASE OF ASSESSEE IN ITA NO. 90/CHD/2010 RELATING TO ASSESSMENT YEAR 2006-07 VIDE ORDER DATED 31.3.2010, DISMISSING THE APPEAL OF ASSESSEE IT WAS HELD AS UNDER:- 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY. UNDENIABLY, THE ORDER OF THE TRIBUNAL DATED 28.02.2 008 (SUPRA) IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT Y EAR 2004-05 HAS DEALT WITH SIMILAR CONTROVERSY AS IS RA ISED IN THE PRESENT APPEAL. THE TRIBUNAL CONSIDERED THE LE ASE OF ENTIRE BUSINESS ASSETS ALONGWITH ITS EMPLOYEES BY T HE ASSESSEE TO M/S UNITED BREWERIES LTD. AND THE TERMS AND CONDITIONS THERETO. INITIALLY, THE ENTIRE BUSINESS ASSETS WERE LEASED OUT W.E.F. 01.04.1998 UPTO 31.03.2003. BEFORE THE EXPIRY OF LEASE ON 31.03.2003, THE PARTIES EXEC UTED A FRESH LEASE DEED ON 29.01.2003 TERMINATING THE EARL IER LEASE PRIOR TO THE EXPIRY OF THE LEASE PERIOD AND A FRESH LEASE DEED WAS ENTERED FOR A PERIOD OF 10 YEARS ON REVISED TERMS AND CONDITIONS. IN THE SAID LEASE ARRANGEMEN T, ANNUAL AMOUNT PAYABLE TO THE ASSESSEE WAS FIXED AT RS.30,00,000/- FOR TWO YEARS SUBJECT TO REVISION WI TH MUTUAL CONSENT. THE SAID LEASE ARRANGEMENT WAS THE SUBJECT MATTER OF CONSIDERATION BY THE TRIBUNAL IN ASSESSMENT YEAR 2004-05 AND, THE TRIBUNAL HELD THAT THE LEASE INCOME RECEIVED BY THE ASSESSEE WAS ASSESSABL E UNDER THE HEAD 'INCOME FROM OTHER SOURCES' AND NOT AS B USINESS INCOME AS CONTENDED BY THE ASSESSEE. 5. DURING THIS YEAR, THE CLAIM OF THE LEARNED C OUNSEL FOR THE APPELLANT IS THAT THE AMOUNT PAYABLE TO THE ASS ESSEE HAS BEEN REVISED WITH MUTUAL CONSENT AND INSTEAD OF A F IXED ANNUAL PAYMENT AGREED TO EARLIER, NOW THE CONSIDERA TION IS PAYABLE ON THE BASIS OF THE PRODUCTION ACHIEVED. IN OUR CONSIDERED OPINION, THE AFORESAID CHANGE IN THE MAN NER OF PAYMENT OF CONSIDERATION, DOES NOT CALL FOR REVISIT ING THE ORDER OF THE TRIBUNAL DATED 28.02.2008. A PERUSAL OF THE PRECEDENT REVEALS THAT THE TRIBUNAL CONSIDERED THE ENTIRE FACTS AND CIRCUMSTANCES AND CONCLUDED THAT THERE DO ES NOT APPEAR TO BE ANY INTENTION OF THE ASSESSEE TO RE-ST ART THE BUSINESS ON ITS OWN AND THEREFORE, INCOME FROM LETT ING OUT OF BUSINESS ASSETS TO A SISTER CONCERN WAS HELD ASS ESSABLE AS 'INCOME FROM OTHER SOURCES' . IN OUR CONSIDERED OPINION, THE DISTINCTION SOUGHT TO BE BROUGHT OUT BY THE LEA RNED COUNSEL BASED ON THE CHANGE IN TERMS OF PAYMENT OF LEASE MONEY, DOES NOT DEFEAT THE INFERENCE DRAWN BY THE T RIBUNAL EARLIER. SIMILARLY, THE ACCEPTANCE OF THE RETURN O F INCOME FOR THE ASSESSMENT YEAR 2005-06 BY THE ASSESSING O FFICER IS NOT DETERMINATIVE OF THE DISPUTE IN AS MUCH AS T HE SAME HAS BEEN SUMMARILY ACCEPTED U/S 143(1) OF THE ACT, WHICH DOES NOT ENTAIL ANY APPLICATION OF MIND BY THE ASSE SSING OFFICER. THIRDLY, WITH RESPECT TO THE DECISIONS RE LIED UPON BY THE LEARNED COUNSEL BEFORE US, THE SAME IN OUR V IEW DO NOT HELP IN AS MUCH AS THE TRIBUNAL HAS ALREADY APP LIED ITS 4 MIND CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE IN THE ASSESSMENT YEAR 2004-05. IN CONCLUSION , IN THE BACKGROUND OF THE DECISION OF THE TRIBUNAL DATED 28.02.2008 IN ASSESSEE'S OWN CASE FOR ASSESSMENT YE AR 2004-05, IN THIS YEAR ALSO, WE FIND NO JUSTIFICATIO N TO ACCEPT THE PLEA OF THE ASSESSEE THAT THE LEASE INCO ME BE ASSESSED UNDER THE HEAD BUSINESS INCOME. INSTEAD , THE STAND OF THE REVENUE TO ASSESS THE SAME UNDER THE H EAD 'INCOME FROM OTHER SOURCES' IS HEREBY AFFIRMED. ACCORDINGLY, THE ASSESSEE FAILS ON GROUND NOS. 1 & 2. 11. THE ISSUE RAISED IN THE PRESENT APPEAL BEING ID ENTICAL TO THE ISSUE RAISED IN ASSESSMENT YEAR 2006-07, FOLLOWING THE PARITY OF REASONING GIVEN IN THE ORDER OF THE TRIBUNAL (SUPRA ), WE DISMISS THE GROUND NO.1 RAISED BY THE ASSESSEE IN ITS CROSS OBJECTION. 8. RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL REFERRED TO ABOVE, WE DISMISS THE GROUND. 9. IN THE RESULT, APPEAL OF THE REVENUE AND CROSS O BJECTION OF THE ASSESSEE ARE DISMISSED. 5. THE FACTS OF THE PRESENT YEAR ARE SIMILAR TO THA T OF ASSESSMENT YEAR 2008- 09. RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE TRIBUNAL, WE DISMISS THE APPEAL OF THE ASSESSEE. ITA NO. 592/CHD/2014 REVENUES APPEAL 6. THE ONLY GROUND RAISED BY THE REVENUE READS AS U NDER:- IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO ASS ESS INCOME ON ACCOUNT OF INTEREST RECEIVED FROM UNITED BREWER IES LTD., WHO IS A MAJOR SHAREHOLDER IN THE ASSESSEE COMPANY WITH SUBSTANTIAL INTEREST, UNDER THE HEAD PROFITS AND G AINS OF BUSINESS AS AGAINST THE HEAD INCOME FROM OTHER SO URCES BY FOLLOWING THE HON'BLE TRIBUNALS DECISIONS DATED 26 .09.2011 & 17.8.2010 PASSED IN ITA NO. 806/CHD/2011 IN ASSES SEE OWN CASE FOR THE ASSESSMENT YEAR 2008-09 IGNORING T HE FACT THAT THE SAME WAS NOT CONTESTED FURTHER SOLELY OWIN G TO THE 5 CONSIDERATION THAT THE TAX EFFECT INVOLVED WAS LESS THAN THE PRESCRIBED MONETARY LIMIT FOR FILING FURTHER APPEAL TO THE HON'BLE HIGH COURT, AND ALSO WITHOUT APPRECIATING THE FACT THAT THE DEPARTMENT HAS NOT ACCEPTED THE SAID ORDER S DATED 28.2.2008 & 17.8.2010 AND HAS ALREADY FILED FURTHER APPEALS WITH THE JURISDICTIONAL HIGH COURT OF PUNJAB & HARY ANA AT CHANDIGARH ON THE PLEA THAT INCOME ACCRUING IN A MA NNER OTHER THAN IN A REGULAR COURSE OF BUSINESS IS TO BE ASSESSED AS INCOME FROM OTHER SOURCES. MOREOVER NO BUSINE SS ACTIVITIES HAD BEEN CARRIED OUT BY THE LESSOR DURIN G THE YEAR UNDER CONSIDERATION. 7. IT IS OBSERVED THAT THE ABOVE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF THIS BENCH OF THE TRIBUNAL IN ASSESSEES CASE IN ITA NO. 806/CHD/2011 RELATING TO ASSESSMENT YEAR 2008- 09. WHILE DECIDING A SIMILAR ISSUE THE BENCH HAS H ELD AS UNDER:- 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE AL SO PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE IT AT CHANDIGARH BENCH B CHANDIGARH DATED 13.5.2011 IN FAVOUR OF T HE ASSESSEE AND AGAINST THE REVENUE IN THE ASSESSEES CASE IN ITA N O. 1393/CHD/2010 RELATING TO ASSESSMENT YEAR 2007-08 WHILE DECIDIN G A SIMILAR ISSUE THE TRIBUNAL HELD AS UNDER:- 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. WE FIND THAT SIMILAR ISSUE AROSE BEFORE THE TRIBUNAL VIDE GROUND NO.1 IN ASSESSEES OWN CASE IN ITA NO. 1065/CHD/2009 RELATING TO ASSESSMENT YEAR 2006-07 W HEREIN THE TRIBUNAL VIDE ORDER DATED 17.8.2010 HAD DISMISS ED THE GROUND OF APPEAL RAISED BY THE REVENUE VIDE PARAS 3 & 4 OF ITS ORDER BY HOLDING AS UNDER:- 3. IN GROUND NO.1, THE DISPUTE RELATES TO ASSESSABILITY OF INTEREST INCOME EARNED BY THE ASSE SSEE. THE ASSESSING OFFICER TREATED THE INTEREST INCOME A S INCOME FROM OTHER SOURCES AS AGAINST BUSINESS INCOME CONSIDERED BY THE ASSESSEE. THE CIT(APPEALS ) 6 HAS SINCE DIRECTED THE ASSESSING OFFICER TO TREAT T HE INTEREST INCOME AS BUSINESS INCOME INSTEAD OF 'IN COME FROM OTHER SOURCES' BY FOLLOWING THE PRECEDENTS IN ASSESSEE'S OWN CASE PERTAINING TO THE ASSESSMENT YE ARS 2001-02 AND 2004-05. IN ASSESSMENT YEAR 2001-02, CIT(APPEALS) HAD DIRECTED THE ASSESSING OFFICER TO TREAT INTEREST INCOME AS BUSINESS INCOME AND SUCH ORDE R HAS BEEN ACCEPTED BY THE DEPARTMENT AS NO APPEAL HAS BE EN PREFERRED BEFORE THE TRIBUNAL. SIMILARLY, IN THE ASSESSMENT YEAR 2004-05, CIT(APPEALS) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, WHICH HAS FURTHER BEEN AFFIRMED BY THE TRIBUNAL VIDE ITA NO.774/CHANDI/200 7 DATED 28.02.2008. 4. BEFORE US, NO MATERIAL HAS BEEN BROUGHT ON RECOR D BY THE REVENUE TO ESTABLISH THAT ANY OF THE AFORESA ID PRECEDENTS HAVE BEEN ALTERED BY ANY HIGHER AUTHORIT Y. ACCORDINGLY, WE FIND NO MISTAKE ON THE PART OF THE CIT(APPEALS) IN DIRECTING THE ASSESSING OFFICER TO TREAT THE INTEREST INCOME AS BUSINESS INCOME FOLLOWING TH E AFORESAID PRECEDENTS IN ASSESSEE'S OWN CASE. ACCORDINGLY, GROUND NO.1 RAISED BY THE REVENUE IS DISMISSED. 7. FOLLOWING THE PARITY OF REASONING GIVEN BY THE TRIBUNAL IN ITS ORDER DATED 17.8.2010, IN ITA NO.1065/CHD/2009 (SUP RA), AS THE ISSUE IS IDENTICAL, WE DISMISS THE GROUND OF APPEAL RAISED BY THE REVENUE IN THE PRESENT APPEAL. 8. RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL REFERRED TO ABOVE, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE AND HENCE WE DISMISS THE SAME. WE MAY ALSO ADD HERE THAT A SIMILAR VIEW HAS BEEN T AKEN BY THE TRIBUNAL IN ASSESSMENT YEAR 2009-10 IN ITA NO. 1218/CHD/2012 VI DE ITS ORDER DATED 17.5.2013. 9. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE AND REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.10.2015 SD/- SD/- (RANO JAIN) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 26 TH OCTOBER, 2015 RKK COPY TO: 7 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR