SEA SCAN MARINE SERVICES PRIVATE LIMITED , GOA V. DEPUTY COMMISSONER OF INCOME TAX CENTRAL CIRCLE -2(3), MUMBAI

ITA 6368/MUM/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4029 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2009-2010
• Appeal Filed On: 27-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VINOD KUMAR
• Assessee Lawyers: NEHA SHARMA
• Keywords: Business income; Depreciation; Opportunity of being heard; Additional evidence
• Section: 2(14); 142(1); 201; 143(2); 208; 48; 13; 22; 28

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI S . RIFAUR RAHMAN, AM & SHRI RAVISH SOOD , JM ./ I.T.A. NO . 6368 & 6369 / MUM/ 2017 ( / ASSESSMENT YEAR: 20 09 - 10 & 2014 - 15 ) M/S SEA SCAN MARINE SERVICES PVT. LTD. FIR E SERVICES COMPOUND, ST. INEZ, PANAJI GOA - 403 001 / VS. D CIT CC 2 (3 ) , ROOM NO. 552, 5 TH FLOOR, AAYAKAR BHAVAN, MUMBAI 400 02 0 ./ ./ PAN NO. A ADCS 4236 J ( / APPELLANT ) : ( / RESPONDENT ) / APPELLAN T BY : MS. NEHA SHARMA, AR / RESPONDENTBY : SHRI V. VINOD KUMAR , DR / DATE OF HEARING : 21 .11 .2019 / DATE OF PRONOUNCEMENT : 10.02.2020 / O R D E R PER S. RIFAUR RAHMAN (ACCOUNTANT MEMBER) : THE PRESENT TWO ( 2 ) APP EAL S HAVE BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMIS S IONER OF INCOME TAX 2 I.T.A. NO. 6368 & 6369/MUM/2017 M/S SEA SCAN MARINE SERVICES PVT. LTD. (APPEALS) - 48 , MUMBAI, IN SHORT LD. CIT(A) DATED 21.08.2017 FOR AY 20 09 - 10 & 2014 - 15 RESPECTIVE LY. 2. T HE ISSUES RAISED IN BOTH THE APPEALS ARE IDENTICAL, THEREFORE, FOR TH E SAKE OF CONVENIENCE, THESE APPEALS ARE CLUBBED, HEARD AND DISPOSED OF BY THIS CONSOLIDATED ORDE R. FIR STLY, WE ARE TAKING ITA NO. 6368 /MUM/2017 FOR AY 20 09 - 10 F ILED BY THE ASSESSEE. 3 . THE BRIEF FACTS OF THE CASE ARE, ASSESSEE FILED IT S RETURN OF INCOME FOR THE A.Y. 2013 - 14 ON 27. 09.2013 DECLARING TOTAL INCOME AT RS. 69,97,720/ - . THE CASE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY, NOTICE U/S. 143(2) AND 142(1) OF THE ACT WERE ISSU ED AND SERVED UPON THE ASSESSE. IN RESPONSE TO THE AFORESAID NOTICES, THE A R OF THE ASSESSEE ATTENDED AND FURNISHED THE RELEVANT INFORMATION AS CALLED FOR. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF BOAT PLEASURE CRUISING AND RENTING OUT OF PREMISES AND OTHER ASSETS. DURING THE YEAR, ASSESSEE'S MAIN SOURCE OF INCOME INCLUDES RENTAL INCOME, INTEREST INCOME AND AGRICULTURAL INCOME & SALE OF FIXED ASSETS. THE ASSESSEE HAS DECLARED INCOME 3 I.T.A. NO. 6368 & 6369/MUM/2017 M/S SEA SCAN MARINE SERVICES PVT. LTD. FROM HOUSE PROPERTY OF RS. 1,44,00,100/ - AND CLAIMED DEDUCTION U/S 24(A) OF THE ACT @ 30% AT RS.43,20,030/ - . ON PERUSAL OF THE PREVIOU S YEAR ASSESSMENTS, AO NOTICED THAT ASSESSEE HAS DECLARED THE RENTAL INCOME UNDER THE HEAD 'BUSINESS INCOME' TILL A.Y. 2009 - 10. FURTHER, HE OBSERVED THAT THERE WAS NO CHANGE IN THE BUSINESS ACTIVITY OF THE ASSESSEE COMPANY DURING THE A.Y. 2010 - 11 . T HE SAME WAS PUT FORTH BEFORE THE ASSESSEE TO SUBSTANTIATE BY THE AO . IN RESPONSE, AR OF THE ASSESSEE COMPANY VIDE ITS LETTER DATED 30.03.2016 STATED AS UNDER: - THE ASSESSEE HAD RECEIVED RENT INCOME FROM LETTING OUT - PROPERTY AND INFRASTRUCTURE. IN AL L THE YEARS PRECEDING AY 2010 - 11 THE ASSESSEE WAS SHOWING TH E SAME AS INCOME FROM BUSINESS. THE ASSETS WHICH WERE LET OUT WERE BUSINESS ASSETS ACQUIRED AND SETUP BY US FOR THE PURPOSE OF RUNNING THE BUSINESS OF PROVIDING MARIT IME TRAINING IN MERCHANT NAVY, FOR WHICH C ERTIFICATE ARE ISSUED AND CONTROLLED BY THE DIRECTOR GENERAL OF SHIPPING. HOWEVER DURING THE YEAR 2003 - 2004, THERE WAS CHANGE IN THE GOVERNMENT POLICY, WHEREIN DG SHIPPING HAD RESTRICTED THE COMMERCIAL ENTITY TO CONDUCT SUCH TYPE OF TRAINING COURSES. AND A S SUCH WE HAD LET OUT THE PROPERTY AND FACILITY TO EARN RENT INCOME ON THE SAME FOR THE PERIOD THE DG SHIPPING DID 4 I.T.A. NO. 6368 & 6369/MUM/2017 M/S SEA SCAN MARINE SERVICES PVT. LTD. NOT ALLOW THE ASSESSEE TO RESTART THE OPERATION . THE ASSESSEE CONTINUED TO SHOW SUCH INCOME AS BUSINESS INCOME AS IT BELIEVED TH E SAME BUSINE SS WILL BE ALLOWED TO BE RESTARTED BY IT. MEANTIME, THE GROUP STARTED SEA SCAN MARINE FOUNDATION A NO N - PROFIT MAKING SECTION 25 COMPANY TO PROVIDE SUCH TRAINING AND COURSES AND TRANSFERRE D THE TRAINING FACILITIES TO THE FOUNDATION ON RENT. NOW SINCE IT I S APPARENT THAT DG SHIPPING WILL NOT ALLOW RESTARTING THE TRAINING BY US, WE CHANGED OUR POLICY AND STARTED SHOWING THE RENT INCOME AS INCOME FROM HOUSE PROPERTY WITH EFFECT FROM AY 2010 - 11 AND CLAIMED STANDARD DEDUCTION OF 30% UNDER SECTION 24(A) OF THE I NCOME TAX ACT. FURTHER, WE WOULD LIKE TO SUBMIT THAT SECTION 14 OF THE INCOME TAX ACT CLASSIFIES THE INCOME EARNED BY AN ASSESSEE AS HEAD WISE INCOME. THE ASSESSEE IN ACCORDANCE TO THE SAID SECTION IS REQUIRED TO OFFER ITS INCOME TO TAX UNDER HEADS SPECIFI ED IN THE ACT. FURTHER, SECTION 22 OF THE SAID ACT PROVIDES THE SPECIFIC HEAD FOR INCOME EARNED FROM OWNERSHIP OF HOUSE PROPERTY, RENTS OR OTHER INCOME FROM OWNERSHIP OF HOUSE PROPERTY UNDER THE HEAD OF 'INCOME FROM HOUSE PROPERTY. FURTHER, SECTION 28 DEAL S WITH THE INCOME EARNED FROM BUSINESS AND PROFESSION. THEREFORE, MERELY BECAUSE THE INCOME IS ATTACHED TO ANY IMMOVABLE PROPER TY THAT CANNOT BE SOLE FACTOR FO R THE 5 I.T.A. NO. 6368 & 6369/MUM/2017 M/S SEA SCAN MARINE SERVICES PVT. LTD. ASSESSMENT OF INCOME AS INCOME FROM PROPERTY OR INCOME FROM BUSINESS. THE INCOME SHOULD BE TESTED AS PER THE LAW. FOR BETTER UNDERSTANDING WE WOULD LIKE TO DISCUSS THE CHARGING SECTION OF INCOME FROM HOUSE PROPERTY AND INCOME FROM BUSINESS AND PROFESSION, TAX IMPOSED UNDER SECTION 22 IS A TAX ON ANNUAL VALUE' OF HOUSE PROPERTY. THE ANNUAL VALU E DETERMINE AS PER THE PROVISION OF SECTI ON 23 OF THE ACT. THE PERSON SH OULD BE THE LEGAL OW NER OF THE PROPERTY. THE PURPOSE FO R WHICH THE BUILDING IS USED BY THE TENANT IS ALSO IMMATERIAL. IT DOES NOT MAKE ANY DIFFERENCE, IF THE PROPERTY IS OWNED BY A LIM ITED COMPANY, A FIRM, A HUF OR INDIVI DUAL. ANNUAL VALUE OF PROPERTY IS ASSESSED TO TAX UNDER SECTION 22 IN THE HANDS OF OWNER EVEN IF HE IS NOT IN RECEIPT OF INCOME OR EVEN IF INCOME IS RECEIVED BY SOME OTHER PERSON. FURTHER, THE WORD 'BUSINESS' HAS BEEN D EFINED IN SECTION 2(14) OF THE INCOME TAX ACT, 1961 TO INCLUDE ANY TRADE, COMMERCE OR MANUFACTURE OR ANY ADVENTURE OR CONCERN IN THE NATURE OF TRADE, COMMERCE OR MANUFACTURE. THIS DEFINITION, BEING AN INCLUSIVE ONE, IS INDICATIVE OF AN EXTENSIVE AND EXPAND ED MEANING RATHER THAN A RESTRICTED OR NARROW MEANING. IN VIEW OF THIS, THE ACTIVITIES WHICH MAY AMOUNT TO BUSINESS NEED NOT NECESSARILY BE BY WAY OF TRADE, COMMERCE OR 6 I.T.A. NO. 6368 & 6369/MUM/2017 M/S SEA SCAN MARINE SERVICES PVT. LTD. MANUFACTURE, OR BE IN THE NATURE OF A PROFESSION. THEY MAY EVEN CONSIST OF RENDERING OF SERVICES AS IN THE CASE OF SELLING AGENTS, MANAGING AGENTS AND THESE SERVICES MAY BE OF A VARIEGATED CHARACTER. HENCE WE WOULD LIKE TO SUBMIT THA T THE INCOME WILL CHARGEABLE AS PER ITS NATURE. NOW COMING TO OUR CASE, DURING THE YEAR UNDER CONSIDERATION TH E COMPANY HAS PROVIDED ITS ENTIRE FACILITY ON RENT UPON W HICH THE COMPANY HAS ABSOLUTE OWNERSHIP. SINCE, IN INCOME TAX ACT SPECIFIC HEADS HAVE BEEN PROVIDED AND THE INCOME WOULD BE CHARGEABLE AS PER THE PROVISIONS OF INCOME TAX, IT IS HEREBY STATED THAT IN COME FROM LETTING OUT OF PREMISES SHOULD BE TAXABLE UNDER THE HEAD HOUSE PROPERTY.' 4. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, AO REJECTED THE CONTENTIONS OF THE ASSESSEE AND DISALLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 24(A) OF THE ACT A ND ACCORDINGLY ASSESSED THE TOTAL INCOME UNDER THE HEAD INCOME FROM BUSINESS. 5 . AGGRIEVED WITH THE ABOVE ORDER , ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE 7 I.T.A. NO. 6368 & 6369/MUM/2017 M/S SEA SCAN MARINE SERVICES PVT. LTD. SUBMISSIONS OF THE ASSESSEE , DISMISSED THE APPEAL OF THE A SSESSEE BY FOLLOWING ASSESSEES OWN CASE FOR AY 2010 - 11 TO 2012 - 13 B Y THE PREDECESSOR, '4,2. THE FIRST GROUND OF APPEAL IS IN RESPECT OF AO TREATING THE RENT INCOME AS BUSINESS INCOME AND NOT INCOME FROM HOUSE PROPERTY AS CLAIMED BY THE APPELLANT. BEFORE M E THE APPELLANT SUBMITTED THAT IT IS IN THE BUSINESS OF BOATING, PLEASURE, CRUISING, AGRICULTURAL INCOME, COMMISSION INCOME ON RENTING OF PREMISES. THE PROPERTY IN QUESTION WHICH WAS LET OUT WAS THE MARITIME TRAINING INSTITUTE BUILDING. THE APPELLANT WAS E ARLIER ENGAGED IN CONDUCTING MARITIME TRAINING FOR MERCHANT NAVY FOR WHICH CERTIFICATE WAS ISSUED BY DIRECTOR GENERAL OF SHIPPING. IN THE YEAR 2003 - 04 THERE WAS A CHANGE IN GOVT. POLICY WHEREIN DIRECTOR GENERAL OF SHIPPING PUT A RESTRICTION ON COMMERCIAL E NTITY FROM CONDUCTING SUCH TYPE OF TRAINING COURSES. HENCE THE APPELLANT GROUP SET UP A NON - PROFIT MAKING COMPANY REGISTERED U/S 25 OF COMPANIES ACT VIZ. SE A SCAN MARINE FOUNDATION (SSMF) , FOR PROVIDING SUCH TRAINING FOR MERCHANT NAVY. THE TRAINING FACILIT IES OF THE APPELLANT COMPANY WERE GIVEN TO THIS SSMF FOUNDATION ON RENT. THEREAFTER, THE APPELLANT COMPANY RECEIVED THE RENT FROM ITS SISTER CONCERN SSMF AS PER THE AGREEMENT 8 I.T.A. NO. 6368 & 6369/MUM/2017 M/S SEA SCAN MARINE SERVICES PVT. LTD. EXECUTED AND OFFERED THE SAME AS BUSINESS INCOME. IT WAS CONTENDED THAT SINCE IT WAS APPARENT THAT THE APPELLANT COMPANY WILL NOT BE PERMITTED TO RESTART THE TRAINING, THE APPELLANT CHANGED ITS POLICY AND STARTED SHOWING THE RENT INCOME AS INCOME FROM HOUSE PROPERTY W.E.F. A. Y. 2010 - 11. 4.3. THE APPELLANT WAS ASKED TO FURNISH DETAILS OF ASSETS WHICH WERE LEASED OUT AND TO FURNISH DETAILS OF BLOCK OF ASSETS AND THE DEPRECIATION SCHEDULE FOR INCOME TAX PURPOSES FOR A. Y. 2004 - 05 ONWARDS TILL A. Y. 2010 - 11. THE AR WAS ALSO ASKED TO FURNISH DETAILS OF DEPRECIATION DISALLOWED IF ANY IN THE CURRENT ASSESSMENT YEAR. SIMILARLY DETAILS OF REPAIRS AND MAINTENANCE AND OTHER EXPENSES ON THESE ASSETS WERE CALLED FROM A. Y. 2004 - 05 TILL DATE. THE APPELLANT DID NOT FURNISH THE INFORMATION CALLED FOR IN THE APPELLATE HEARING HELD ON 17/07/14. A STATEME NT WAS FILED ON 28/08/2014 FROM WHICH IT WAS NOT CLEAR AND IT IS NOT VERIFIABLE WHAT ARE THE ASSETS OF THE MARINE TRAINING INSTITUTE AND WHAT ARE OTHER ASSETS. THE WORKING FOR INSTANCE DOES NOT SHOW THE FURNITURE AND FIXTURES AS PART OF ASSETS LEASED OUT W HICH IS CLEARLY INCORRECT. IT IS SEEN THAT DEPRECIATION AMOUNTING TO RS 56,30,558/ - IS CLAIMED BETWEEN AY 2006 - 07 TO AY 2009 - 10. FROM THE COPY OF THE TAX AUDIT REPORT FILED FOR A.Y. 2010 - 11 IT IS SEEN THAT THE AUDITOR IN ITEM 8B HAS MENTIONED THAT 9 I.T.A. NO. 6368 & 6369/MUM/2017 M/S SEA SCAN MARINE SERVICES PVT. LTD. THERE IS NO CHANGE IN THE BUSINESS OF THE APPELLANT COMPANY. FROM THE DEPRECIATION SCHEDULE FORMING PART OF THE TAX AUDIT REPORT IT IS SEEN THAT THE APPELLANT HAS CONTINUED TO CLAIM THE DEPRECIATION ON ALL THE ASSETS AND HAS NOT EXCLUDED ANY ASSET NOW CLAIMED TO B E ASSETS FROM WHICH INCOME FR OM PROPERTY IS CLAIMED. IT IS AL SO NOTED THAT IN THE INSTRUCTION GIVEN IN DOS ORDER NO. 1 OF 2003 DATED 15/01/2003, IT WAS MENTIONED IN PARA 1.4.2 THAT NO APPLICATION FOR EITHER A NEW TRAINING INSTITUTE OR NEW TRAINING COURSE B Y THE EXISTING INSTITUTE SHALL - BE PROCESSED OTHER THAN THAT FROM A REGISTERED PUBLIC TRUST OR REGISTERED SOCIETY OR COMPANY REGISTERED U/S. 25 OF THE INDIAN COMPANY'S ACT 1956 WITH EDUCATION PURPOSE AS ONE OF THE OBJECTIVES. THERE IS NOTHING TO INDICATE T HAT THE APPELLANT WAS WAITING FOR ONLY CHANGE IN GOVT. POLICY. IN FACT THE APPELLANT GROUP IMMEDIATELY SET UP NON - PROFIT INSTITUTION SO THAT THE MARITIME TRAINING INSTITUTE CONTINUED ITS OPERATION UNINTERRUPTED AND ALL THE EXISTING FACILITIES WERE MADE AVA ILABLE TO THIS NON - PROFIT INSTITUTE. THE LEAVE AND LICENSE AGREEMENT BETWEEN THE APPELLANT COMPANY AND SEA SCAN MARINE FOUNDATION DATED 01/04/2005 ITSELF WAS FOR 5 YEARS AND WAS EXTENDED AND IS IN OPERATION EVEN ON DATE. THERE ARE TWO AGREEMENTS - ONE IS IN RESPECT OF BUILDINGS AND THE OTHER IS IN RESPECT OF FURNITURE AND FIXTURES. THE DIRECTOR OF SEA SCAN MARINE 10 I.T.A. NO. 6368 & 6369/MUM/2017 M/S SEA SCAN MARINE SERVICES PVT. LTD. FOUNDATION, MRS. MEHTA IS THE WIFE OF CAPT . VIRENDRA MEHTA MANAGING DIRECTOR OF THE APPELLANT COMPANY. IT IS APPARENT THAT THE APPELLANT COMPANY DER IVED THE BENEFIT OF CLAIMING DEPRECIATION ALL THESE YEARS AND HAS NOW RESORTED TO CHANGE OF HEAD OF INCOME ONLY BECAUSE THE STANDARD DEDUCTION AVAILABLE U/S. 24(A) IS MUCH HIGHER THAN THE DEPRECIATION AND REPAIRS AND MAINTENANCE ALLOWABLE IN THE CURRENT YE AR THAN IF THE INCOME WAS TREATED AS BUSINESS INCOME. IN THESE FACTS A ND CIRCUMSTANCES, I UPHOLD THE ORDER OF THE AO AND GROUND OF APPEAL NO. 1 IS DISMISSED.' 6 . AGGRIEVED WITH ORDER OF LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE US RAIS ING FOLLOWING GROUNDS OF APPEAL: - GROUND NO.L: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE CIT(A) GROSSLY ERRED IN UPHOLDING RENT INCOME AS INCOME FROM BUSINESS AND DISALLOWANCE MADE BY THE LEARNED A.O OF DEDUCTION OF RS. 43,20,030/ - CLAIMED U/S 24 (A) OF THE ACT THE APPELLANT PRAYS THAT THE RENT INCOME SHOULD BE TREATED AS INCOME FROM HOUSE PROPERTY AND ADDITION OF RS 43,20,030/ - WITH RESPECT TO DEDUCTION CLAIMED U/S 24(A) MAY PLEASE BE DELETED. THE APPELLANT RESERVES ITS RIGHT TO ADD, ALTER, AMEND OR DELETE THE GROUNDS OF APPEAL. 11 I.T.A. NO. 6368 & 6369/MUM/2017 M/S SEA SCAN MARINE SERVICES PVT. LTD. 7 . BEFORE US , ASSESSEE FILED ADDITIONAL EVIDENCE ALONGWITH APPLICATION FOR ADMISSION WHICH CONTAINED MEMORANDUM OF ASSOCIATION OF THE ASSESSEE COMPANY. SINCE THE ADDITIONAL EVIDENCE IS MOA OF THE ASSESSEE COMPANY ITSELF AND DR HAS NOT OBJECTED TO THE SAME, THEREFORE WE ADMIT THE ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE. 8 . BEFORE US, LD. AR BROUGHT TO OUR NOTICE PAGE 1 OF THE ADDITIONAL EVIDENCE WHICH IS OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION AND SUBMITTED THAT THE MAIN OBJECT OF THE COMPANY IS TO CARRY BUSINESS OF RUNNING AND CONDUCTING MARITIME TRAINING CENTER AND RELATED SERVICES. THE OTHER INCIDENTAL AND ANCILLARY OBJECT WHICH CONTAIN EARNING OF RENTAL INCOME /LEASE INCOME. LD. AR FURTHER BROUGHT TO OUR NOTI CE AT PAGE NO. 3 OF THE ORDER OF ITAT IN ITA NO. 7086/MUM/2014 FOR AY 2010 - 11 AND SUBMITTED THAT ITAT HAS DISMISSED THE APPEAL OF THE ASSESSEE WITH THE FOLLOWING OBSERVATIONS: - 11. NO DETAILS WERE FURNISHED BY ASSESSEE TILL 17/07/2014. SOME STATEMENTS REGA RDING THE QUERIES RAISED BY LD CIT(A) WERE FILED BY ASSESSEE ON 28/08/2014, FROM WHICH THE FACTS WERE NOT VERIFIABLE AS 12 I.T.A. NO. 6368 & 6369/MUM/2017 M/S SEA SCAN MARINE SERVICES PVT. LTD. TO WHICH ARE THE ASSET USED FOR MARINE TRAINING. THE LD CIT(A) CONCLUDED THAT ASSESSEE COMPANY EXECUTED TWO AGREEMENTS, ONE IN RESPECT O F BUILDINGS AND OTHER IN RESPECT OF FURNITURE AND FIXTURE. THE ASSESSEE COMPANY DERIVED THE BENEFITS CLAIMING DEPRECIATION ALL THE YEARS AND NOW HAS CHANGED THE HEAD THE INCOME ONLY TO CLAIM STANDARD DEDUCTION UNDER SECTION 24(A) WHICH IS HIGHER THAN THE D EPRECIATION COMPARATIVE TO REPAIRS AND MAINTENANCE. WE HAVE NOTICED THAT THE ASSESSEE HAS NOT FILED COPY OF MEMORANDUM OF ASSOCIATION OF ASSESSEE COMPANY FOR THE REASONS BEST KNOWN TO THEM. THE AUDIT REPORT FILED BY THE ASSESSEE REVEALS THAT NATURE OF BUS INESS OR PROFESSION IS BOAT PLEASURE, CRUISING, RENTING OF PROPERTIES [PARA 8(A)] AND THERE IS NO CHANGE IN THE NATURE OF BUSINESS OR PROFESSION [ PARA 8(B) PAGE 32OF PB]. THE RATIO OF THE VARIOUS DECISIONS IS NOT APPLICABLE AS THE FACTS OF THE PRESENT CA SE ARE AT VARIANCE. WE HAVE SEEN THAT THE ORDER OF LD CIT (A) IS REASONED ONE AND DOES NOT REQUIRE ANY INTERFERENCE AT OUR END. THE FACTS OF THE VARIOUS DECISIONS RELIED BY THE ASSESSEE ARE AT VARIANCE AND THE RATIO OF THESE DECISIONS ARE NOT APPLICABLE ON THE FACTS OF THIS CASE. HENCE, THE GROUND OF APPEAL RAISED BY ASSESSEE IS DISMISSED. NO ORDER AS TO COST. 13 I.T.A. NO. 6368 & 6369/MUM/2017 M/S SEA SCAN MARINE SERVICES PVT. LTD. 9. LD. AR FURTHER SUBMITTED THAT ASSESSEE HAS DECLARED THE INCOME EARNED BY THE ASSESSEE AS RENTAL INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND NOT BUSINESS INCOME. FOR THAT PROPOSITION, SHE RELIED UPON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VRS. NEW INDIA INDUSTRIES LTD. (1993) 201 ITR 208 (GUJ) . 10 . ON THE OTHER HAND , LD DR RELIED ON THE ORDER PASSED BY REVENUE AUTH ORITIES AS WELL AS ORDER OF ITAT FOR AY 2010 - 11 AND SUBMITTED THAT THE FACTS ARE SIMILAR TO THE PRESENT CASE AND THERE IS NO CHANGE IN THE FACTS OF THE CURRENT YEAR ALSO, THEREFORE HE SUPPORTED THE FINDING OF LD. CIT(A). 11 . CONSIDERED THE RIVAL SUBMISSIO NS AND MATERIAL PLACED ON RECORD. WE NOTICE THAT DUE TO CHANGE IN GOVERNMENT POLICY ON RUNNING OF MARITIME TRAINING FACILITY, TH E ASSESSEE WAS FORCED TO LET GO ITS BUSINESS TO ITS SISTER CONCERN, A NON - PROFIT SECTION 25 COMPANY. IT IS FACT THAT ASSESSEE WI LL NEVER IN THE NEAR FUTURE CAN RUN THE TRAINING FACILITY. WE NOTICE THAT AS FAR AS THIS FACT IS CONCERNED, THERE IS NO DISPUTE. THE OBJECTION AND OBSERVATION EXPRESSED BY LD. CIT(A) IS TOWARDS THE DETAILS WHICH THE 14 I.T.A. NO. 6368 & 6369/MUM/2017 M/S SEA SCAN MARINE SERVICES PVT. LTD. ASSESSEE FAILED TO SUBMIT ON THE DEPRECI ATION, WHICH THE ASSESSEE CLAIMED OVER THE YEARS BEFORE TRANSFERRING THE FACILITY TO ITS SI STER CONCERN. WHAT IS RELEVANT IS THE NATURE OF TRANSACTION AND CLAIM UNDER INCOME TAX ACT. IN THE GIVEN CASE, THE ASSESSEE HAD A FACILITY AND WHICH ASSESSEE CANNOT UTILIZE THE SAME FOR ITS BUSINESS PURPOSES. IT IS FORCED ON THE ASSESSEE TO TRANSFER THE SAME TO A NON - PROFIT ORGANIZATION. IN THIS SITUATION, ASSESSEE CAN ONLY SELL THE SAME OR LET THE FACILITY BE GIVEN ON RENT. IT HAS SELECTED THE SECOND OPTION. AS PER T HE NATURE OF TRANSACTION, IT FALLS UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 12. THE TAX AUTHORITIES HAVE APPREHENSION THAT ASSESSEE MAY CLAIM ADDITIONAL BENEFIT BY CLAIMING REGULAR DEPRECIATION FOR THE SAME ASSETS UNDER BLOCK OF ASSETS AND ALSO DEDUCTIO N U/S 24(A) OF THE ACT. WE DO AGREE WITH THE TAX AUTHORITIES CONSIDERING THE FACT THAT ASSESSEE COULD NOT BRING ON RECORD THE DETAILS OF ASSETS, WHICH ARE GIVEN ON RENT. IT COMES DOWN TO FIND THE SAME. WE, IN OUR OPINION, ASSESSEE SHOULD BE GIVEN ON E MORE OPPORTUNITY TO SUBSTANTIATE AND SUBMIT THE DETAILS OF ASSETS, WHICH WAS GIVEN ON RENT AND A DECLARATION THAT IT IS NOT CLAIMING ANY ADDITIONAL 15 I.T.A. NO. 6368 & 6369/MUM/2017 M/S SEA SCAN MARINE SERVICES PVT. LTD. DEPRECIATION. THEREFORE, WE ARE REMITTING THIS ISSUE BACK TO THE FILE OF AO TO ASCERTAIN THE DETAILS FROM THE ASS ESSEE. IF THE ASSESSEE FAILS TO SUBSTANTIATE THE DETAILS, T HEN AO MAY DISALLOW THE DEPRECIATION OF THE RELEVANT BLOCK OF ASSETS, WHICH WAS LET OUT. IT MAY INCLUDE OTHER ASSETS ALSO, IT IS THE RESPONSIBILITY OF THE ASSESSEE TO COME CLEAR AND WE DIRECT AO TO ALLOW THE CLAIM U/S 24(A) OF THE ACT. IT IS NEEDLESS TO SAY THAT ASSESSEE MAY BE GIVEN PROPER OPPORTUNITY OF BEING HEARD. ACCORDINGLY, GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 1 3 . THE OTHER APPEAL OF ASSESSEE IN ITA NUMBER 6369/M UMBAI/2017 , THE FACTS IN THIS APPEAL ARE SIMILAR TO THE FACTS IN ITA NUMBER 6368/MUMBAI/2017 , THEREFORE, THE GROUNDS RAISED IN THIS APPEAL ARE ALSO ALLOWED FOR STATISTICAL PURPOSES . 1 4 . IN THE NET RESULT, BOTH THE APPEAL S FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH FEB 2020 . SD/ - SD/ - (RAVISH SOOD ) (S. RIFAUR RAHMAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 10 . 02 .2020 SR.PS. DHANANJAY 16 I.T.A. NO. 6368 & 6369/MUM/2017 M/S SEA SCAN MARINE SERVICES PVT. LTD. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI