Eskay Electronics India Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 6444/DEL/2014

• Counselvise Citation: 644420114 RSA 2014
• Duration Of Justice: 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC 1
• Next Hearing Date: 15-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 25-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DEVI SHARAN SINGH
• Assessee Lawyers: ANIL KUMAR MALHOTRA; LALIT KUMAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH SMC SMC SMC SMC : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA, VICE , VICE , VICE , VICE PRESIDENT PRESIDENT PRESIDENT PRESIDENT ITA NO ITA NO ITA NO ITA NO . .. . 6444/DEL/2014 6444/DEL/2014 6444/DEL/2014 6444/DEL/2014 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2010 2010 2010 2010 - -- - 11 1111 11 M/S ESKAY ELECTRONICS INDIA M/S ESKAY ELECTRONICS INDIA M/S ESKAY ELECTRONICS INDIA M/S ESKAY ELECTRONICS INDIA PVT.LTD., PVT.LTD., PVT.LTD., PVT.LTD., B BB B- -- -86/1, 86/1, 86/1, 86/1, OKHLA INDUSTRIAL AREA, OKHLA INDUSTRIAL AREA, OKHLA INDUSTRIAL AREA, OKHLA INDUSTRIAL AREA, PHASE PHASE PHASE PHASE- -- -II, II,II, II, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 11 1111 110 070. 0 070. 0 070. 0 070. PAN : AABCE1176D. PAN : AABCE1176D. PAN : AABCE1176D. PAN : AABCE1176D. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -11(2), 11(2), 11(2), 11(2), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANIL KUMAR MALHOTRA, CA AND SHRI LALIT KUMAR, ADVOCATE. RESPONDENT BY : SHRI DEVI SHARAN SINGH, SR.DR. DATE OF HEARING : 15.07.2015 15.07.2015 15.07.2015 15.07.2015 DATE OF PRONOUNCEMENT : 03.08.2015 03.08.2015 03.08.2015 03.08.2015 ORDER ORDER ORDER ORDER THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2010-1 1 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XIII, NEW DELHI DATED 11 TH SEPTEMBER, 2014. 2. THE GROUND OF APPEAL OF THE ASSESSEE IS AS UNDER:- THE HONBLE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE LD. ASSESSING OFFICER TO MODIFY THE ASSESSMENT ORDER AND TREAT THE ENTIRE INCOME ASSESSED BY THE LD. ASSESSING OFFICER OF THE ASSESSEE AS INCOME FROM HOUSE PROPERTY AGAINST INCOME FROM OTHER SOURCES ASSESSED BY HIM (DCIT) WHEREAS THE ASSESSEE DECLARED THE SAME AS INCOME FROM BUSINESS. THE ORDER PASSED BY THE HONBLE CIT(A) IS ARBITRARY AND IS NOT FOUNDED ON FAC TS. ITA-6444/DEL/2014 2 3. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE EARLIER YEARS VIZ., ASSESSMENT YEARS 2006-07 AND 2008-09, LEARNED CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND HELD TH AT THE INCOME FROM FACTORY PREMISES SHOULD BE ASSESSED AS INCOME FROM BU SINESS AND THE REVENUE HAS NOT PREFERRED ANY APPEAL AGAINST THE ORDER OF LEARNED CIT(A). HE RELIED ON THE DECISION OF HONBL E APEX COURT IN THE CASE OF CIT VS. VIKRAM COTTON MILLS LTD. [1988] 169 ITR 597 (SC). HE SUBMITTED THAT THE TOTAL AMOUNT RECEIVED FROM THE FA CTORY PREMISES ALONG WITH ITS EQUIPMENTS, FIXTURES ETC. WAS `7 TO `8 L AKHS PER ANNUM ONLY. HE SUBMITTED THAT THE CHAIRMAN OF THE ASSESSEE CO MPANY IS AN IIT QUALIFIED ENGINEER AND IS 88 YEARS OF AGE. HE SUB MITTED THAT THE ASSESSEE HAS TO DISCONTINUE THE BUSINESS SINCE THE YEAR 1988 DUE TO LITIGATION PENDING BEFORE HONBLE DELHI HIGH COURT AND CENTRAL EXCISE AND SALES TAX AUTHORITIES ETC. HE SUBMITTED THAT FOR PROPER UTILIZATION OF THE PREMISES, THE ASSESSEE HAS HANDED OVER ITS ENTIRE FACTORY PREMISES ALONG WITH ITS EQUIPMENTS AND FURNITURE & FIXT URES ETC. AND COULD NOT RESUME THE BUSINESS TILL DATE DUE TO VARIOUS P ENDING LITIGATION BEFORE DIFFERENT COURTS AND, IN FACT, INT ENDS TO RESTART THE BUSINESS AND, THEREFORE, THE INCOME THEREOF SHOULD BE ASSESSED UNDER THE HEAD INCOME FROM BUSINESS. 4. LEARNED DR HAS OPPOSED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE HAS NO INTE NTION TO RUN THE BUSINESS AND THE ASSESSEE COULD NOT RESTART ITS BUSIN ESS AFTER ITS DISCONTINUANCE IN THE YEAR 1988 AND, THEREFORE, T HE INCOME FROM LETTING OUT OF THE FACTORY PREMISES SHOULD BE ASSESSED UND ER THE HEAD INCOME FROM HOUSE PROPERTY. HE RELIED ON THE ORDER OF LEARNED CIT(A). 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PERU SED THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). I FIND THAT IN REPLY TO A QUESTION FROM THE BENCH, THE LEARNED COUN SEL FOR THE ITA-6444/DEL/2014 3 ASSESSEE HAS SUBMITTED THAT THE ASSESSEE COULD NOT RESTART ITS BUSINESS TILL DATE AFTER ITS DISCONTINUANCE IN THE YEAR AS BACK AS 1988. THE CHAIRMAN OF THE ASSESSEE COMPANY IS 88 YEARS OF AGE. I FIND THAT MERELY BECAUSE IN THE PAST THE ISSUE WAS DECIDED IN FAVO UR OF THE ASSESSEE BY THE CIT(A) AND THE REVENUE HAS NOT PREFERRED ANY APPEAL TO THE TRIBUNAL, IT COULD NOT BE SAID THAT THE DEPAR TMENT IS PRECLUDED FROM ASSESSING THE INCOME FROM THE FACTORY UNDER THE RI GHT HEAD OF INCOME. I FIND FROM THE CHART FILED AT PAGE 61 OF THE COMPILATION BY THE ASSESSEE THAT THE TOTAL AMOUNT INVOLVED IN THE LITIGATI ON BEFORE HONBLE DELHI HIGH COURT, DELHI SMALL INDUSTRIAL CORPORATION LTD., SALES TAX AUTHORITIES, CENTRAL EXCISE AUTHORITIES AND MUNICIPAL CORPORATION OF DELHI COMES TO `1.35 CRORES ONLY. THE ASSESSEE IS A CORPO RATE ASSESSEE AND THE LITIGATION AND THE AMOUNT INVOLVED IN THE LITIGATION COULD NOT BE SAID TO BE OF THAT MAGNITUDE THAT THE A SSESSEE COULD NOT RESTART ITS BUSINESS DURING THE PAST 27 YEARS. THE FACTS OF THE CASE LEAD TO THE CONCLUSION THAT THE ASSESSEE IS NO MORE INTE RESTED IN RESTARTING ITS BUSINESS AND HAS LET OUT ITS FACTORY PREMISE S ALONG WITH ITS MACHINERY, FURNITURE AND FIXTURES FOR A FIXED AMO UNT OF RENT AND, THEREFORE, THE ACTION OF LEARNED CIT(A) IN DIRECTIN G TO TREAT THE INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY WAS JUSTI FIED AND NO INTERFERENCE IN THE SAME IS CALLED FOR. IN THIS VIEW OF THE MATTER, THE ORDER OF LEARNED CIT(A) IS CONFIRMED AND THE GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 3 RD AUGUST, 2015. SD/- (G. (G. (G. (G. C. GUPTA C. GUPTA C. GUPTA C. GUPTA ) )) ) VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. ITA-6444/DEL/2014 4 COPY FORWARDED TO: - 1. APPELLANT : M/S ESKAY ELECTRONICS INDIA PVT.LT D., M/S ESKAY ELECTRONICS INDIA PVT.LTD., M/S ESKAY ELECTRONICS INDIA PVT.LTD., M/S ESKAY ELECTRONICS INDIA PVT.LTD., B BB B- -- -86/1, OKHLA INDUSTRIAL AREA, PHASE 86/1, OKHLA INDUSTRIAL AREA, PHASE 86/1, OKHLA INDUSTRIAL AREA, PHASE 86/1, OKHLA INDUSTRIAL AREA, PHASE- -- -II, II,II, II, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 070. 110 070. 110 070. 110 070. 2. RESPONDENT : INCOME INCOME INCOME INCOME TAX OFFICER, TAX OFFICER, TAX OFFICER, TAX OFFICER, WARD WARD WARD WARD- -- -11(2), NEW DELHI. 11(2), NEW DELHI. 11(2), NEW DELHI. 11(2), NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR