ACIT, New Delhi V. M/s Foremost Estates Pvt. Ltd., Delhi

ITA 611/DEL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5471 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 05-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE MR. G.D. AGRA WAL , PRESIDENT AND MR. KUL BHARAT , JUDICIAL MEMBER ITA N O. 611 /DEL/201 6 A SSESSMENT YEAR: 20 12 - 13 ACIT CIRCLE 9(2), NEW DELHI VS. M/S FOREMOST ESTATES PVT. LTD., B - 36, MOHAN PARK, NAVEEN SAHADARA, DELHI - 110032 PAN: AAACF3494Q (APPELLANT) (RESPONDENT) O R D E R PER KUL BHARAT, JUDICIAL MEMBER . : APPEAL BY THE REVENUE IS DIRECTED AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS) - XIII , DELHI DATED 27 TH NOVEMBER, 2015 PERTAINING TO ASSESSMENT YEAR 2012 - 13 . 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - I. LD. CIT(A) ERRED IN LAW AND ON FACTS OF THE CASE IN DIRECTING THE AO TO ASSESSEE THE RENTAL INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM HOUSE PROPERTY II. THE APPELLANT CRAVES LEAVE , MODIFY, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. DEPARTMENT BY SH. S.R. SENAPATI, SR. DR ASSESSEE BY SH. SH. A JAY AGARWAL, CA & SH. SAURABH AGARWAL, CA DATE OF HEARING 03 .0 4 .2018 DATE OF PR ONOUNCEMENT 04 .04 .2018 2 ITA NO . 6 11 /DEL/201 6 3 . THE ONLY EFFECTIVE GROUND IN THIS APPEAL IS AGAINST TREATING THE RENTAL INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM HOUSE PROPERTY INSTEAD OF BUSINESS INCOME. THE FACTS GIVING RISE TO THE APPEAL ARE THAT THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT , 1961 (HEREINAFTER REFERRED TO THE AS THE ACT ) WAS FRAMED VIDE O RDER DATED 21 ST JANUARY, 2015. WHILE FRAMING THE ASSESSMENT, THE ASSESSING OFFICER TREATED RENTAL RE CEIPTS RECEIVED BY THE ASSESSEE AS BUSINESS RECEIPTS. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A) WHO AFTER CONSIDERING TH E SUBMISSIONS ALLOWED THE APPEAL OF THE ASSESSEE. 4. NOW THE REVENUE IS IN APPEAL BEFORE US. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVES SUPPORTED THE ASSESSMENT ORDER ON THE CONTRARY LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE I N THE WRITTEN SUBMISSIONS. LEARNED COUNSEL SUBMITTED THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN THE EARLIER YEAR I.E. IN THE ASSESSMENT YEAR 2010 - 6 . WE HAVE HEARD THE RIVAL CONTENTIONS , PERUSED THE MAT ERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE SUBMISSION OF THE ASSESSEE IS THAT THE ISSUE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THIS TRIBUNAL IN ITA NO. 5042/DEL/2014 . THIS CONTENTION OF THE ASSE SSEE IS NOT REBUTTED BY THE REVENUE. WE FIND THAT THE COORDINATE 3 ITA NO . 6 11 /DEL/201 6 BENCH OF THIS TRIBUNAL HAS ALREADY BEEN DECIDED THE ISSUE BY HOLDING AS UNDER: - HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES BEL OW, WE FIND THAT THE ASSESSING OFFICER MADE ADDITION OF R S. 90,72,526/ - (MUNICIPAL TAX OF RS. 1,07,355/ - AND STANDARD DEDUCTION AT THE RATE OF 30% OF RS. 89,65,171/ - ) TOWARDS RETURNED INCOME BY CONSIDERING THE RENTAL INCOME BEING THE INCOME FROM HOUSE PROPERTY AS BUSINESS INCOME. THE CONTENTION OF THE ASSESSEE R EMAINED THAT FROM THE VERY BEGINNING IT HAS BEEN EARNING RENTAL INCOME FROM LETTING OUT THE SAME HOUSE PROPERTY SITUATED AT 48, OKHLA INDUSTRIAL AREA, NEW DELHI. THE PROPERTY WAS LET OUT THROUGH LEASE DEEDS WITH TWO TENANTS. THE HON BLE SUPREME COURT IN TH E CASE OF EAST INDIA HOUSING & LAND DEV. TRUST LTD. VS. CIT (SUPRA) HAS BEEN PLEASED TO HOLD THAT CHARACTER OF INCOME COULD NOT BE ALTERED MERELY BECAUSE ASSESSEE COMPANY HAD BEEN FORMED WITH OBJECT OF SETTING UP AND DEVELOPING LANDED PROPERTY AND MARKETS. THE HON BLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF CIT VS. ANSAL HOUSING FINANCE & LEASING CO. LTD. (SUPRA) HAS BEEN PLEASED TO HOLD THAT ANNUAL LETTING VALUE (ALV) OF UNSOLD FLATS IS TO BE TREATED AS INCOME FROM HOUSE PROPERTY EVEN IF THE SA ID FLATS WERE CLASSIFIED AS STOCK IN TRADE IN THE BOOKS OF ACCOUNT. THESE DECISIONS ARE FULLY APPLICABLE IN THE PRESENT CASE BEFORE US AND BESIDES UNDER SIMILAR FACTS IN OTHER ASSESSMENT YEARS THE ASSESSING OFFICER HAS ACCEPTED THE CLAIMED INCOME FROM HOUS E PROPERTY, THUS CONSISTENCY ON AN IDENTICAL ISSUE UNDER SIMILAR SET OF FACTS IN THE APPROACH OF THE REVENUE IS REQUIRED TO BE MAINTAINED. CONSIDERING ALL THESE UNDISPUTED ASPECTS OF THE CASE, WE ARE OF THE VIEW THAT THE ID. CIT (APPEALS) HAS RIGHTLY ACCEP TED THE CLAIMED INCOME FROM HOUSE PROPERTY. THE SAME IS UPHELD. THE GROUND IS ACCORDINGLY REJECTED. 6. TAKING THE CONSISTENT VIEW, WE DO NOT SEE ANY REASON TO INTERFERE IN THE FINDING OF THE LEARNED CIT(A) , THE SAME IS HEREBY AFFIRMED AND THE GROUND RA ISED IN THIS APPEAL IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ( ORDER PRONOUNCED IN THE OPEN COURT ON 04 . 0 4 .2018. ) SD/ - SD/ - ( G.D. AGRA WAL ) ( KUL BHARAT ) PRESIDENT JUDICIAL MEMBER DT. 04 . 0 4 .2018 SH 4 ITA NO . 6 11 /DEL/201 6 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR , ITAT NEW DELHI DATE 1. DRAFT DICTATED ON PS 2. DRAFT PLACED BEFORE AUTHOR 4 . 201 8 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SE COND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 4 . 201 8 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 4 .201 8 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.