BAKUL INVESTMENT P.LTD, MUMBAI V. ITO 2(1)(1), MUMBAI

ITA 649/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2806 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 30-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: KRIT KAMDAR; PARTHA TAMBDAY
• Keywords: Business income; Opportunity of being heard; Principle of natural justice

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SANJAY ARORA , AM ./ I.T.A. NO. 649/MUM/2015 ( / ASSESSMENT YEAR: 2008 - 09) BAKUL INVESTMENTS PRIVATE L IMITED, 63, SONAWALA BUILDING, BOMBAY SAMACHAR MARG, FORT, MUMBAI - 400 001 / VS. ITO - 2(1)(1), ROOM NO. 561, 5 TH FLOOR, AAYKAR BHAVAN, M. K. MARG, MUMBAI - 400 020 ./ ./ PAN/GIR NO. AAACB 2438 C ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI KRIT KAMDAR & SHRI PARTHA TAMBDAY / RESPONDENT BY : SHRI JAVED AKHTAR / DATE OF HEARING : 23.6.2016 / DATE OF PRONOUNCEMENT : 30 . 6.20 16 / O R D E R PER SANJAY ARORA, A. M.: THIS A PPEAL BY THE ASSESSEE CONTEST THE LEVY OF CONFIRMATION OF THE PENALTY BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 4 , MUMBAI (CIT(A) FOR SHORT) VIDE ITS ORDER DATED 18.11.2014 , I.E., AS LEVIED U/S. 271 ( 1 ) (C) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) BY THE ASSESSING OFFICER (A.O.) VIDE HIS ORDER DATED 15.3.2013 FOR THE ASSESSMENT YEAR (A.Y.) 2008 - 09. 2 ITA NO. 649/MUM/2015 (A.Y. 2008 - 09) BAKUL INVESTMENTS PRIVATE LIMITED VS. ITO 2. THE ISSUE ARISING IN THIS APPEAL IS THE HEAD OF INCOME WHERE - UNDER THE INCOME BY WAY OF L EASE RENT AND/OR LEAVE AND LICENSE FEE ARISING TO THE ASSESSEE IS TAXABLE, I.E., EITHER AS BUSINESS INCOME, AS RETURNED BY THE ASSESSEE, OR AS INCOME FROM HOUSE PROPERTY , AS BEING PRESSED BY THE REVENUE . A ND FOR WHICH I T RELIES ON THE PROVISION OF SECTION 27(IIIB) R/W S. 269UA(F) OF THE ACT IN - AS - MUCH AS THE PROPERTY LEASED IS BY WAY OF SUB - LEASE, WITH THE PARENT LEASE BEING FOR 99 YEARS, I.E., WAY BEYOND THE THRESHOLD LIMIT OF 12 YEARS PRESCRIBED FOR A LEASE E TO BE CONSIDERED AS A DEEMED OWNER , AND WHO IS TO BE CONSIDER AS AN OWNER FOR THE PURPOSES OF CHAPTER IV - C OF THE ACT. 3. AT THE OUTSET, IT WAS SUBMITTED BY THE LD. AUTHORIZED REPRESENTATIVE (AR), THE ASSESSEES COUNSEL , THAT THE ASSESSMENT FOR A.YS. 2001 - 02 TO 2010 - 11, I.E., INCLUDING THE CURRENT YE AR, HAVE SINCE BEEN SET ASIDE TO THE FILE OF THE A.O. QUA , AMONG OTHERS , THE SAID ISSUE , BY THE T RIBUNAL VIDE ITS ORDER DATED 02.12.2015 (COPY ON RECORD). THAT BEING THE CASE, THE IMPUGNED PENALTY SHALL NOT SURVIVE. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) CONCEDED TO THIS BEING THE POSITION, FURTHER STATING THAT THE REVENUE SHOULD BE ALLOWED LIBERTY TO LEVY PENALTY AFRESH, I.E., IN THE SET ASIDE PROCEEDINGS. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATERIAL ON RECORD, INCLUDING THE TRIBUNALS ORDER S UPRA. THE TRIBUNAL , NOTING THE CONTENTIONS OF BOTH THE PARTIES , SET ASIDE THE MATTER BACK TO THE FILE OF THE A.O. TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW VIDE PARA 6 OF ITS ORDER, WHICH READS AS UNDER: 6. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED PRECEDENTS AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. ON HEARING BOTH THE PARTIES AND THE ARGUMENTS PUT FORTH BY BOTH THE LD REPRESENTATIVES ON BOTH THE ABOVE MENTIONED ISSUES ( FIRST AND THIRD ISSUES) IN THE ASSESSEES APPEALS FOR THE AYS UNDER CONSIDERATION, WE ARE OF THE OPINION THAT THE FIRST AND THE THIRD ISSUES RELATING TO THE CORRECT HEAD OF INCOME 3 ITA NO. 649/MUM/2015 (A.Y. 2008 - 09) BAKUL INVESTMENTS PRIVATE LIMITED VS. ITO SHOULD BE REMANDED TO THE FILE OF THE AO TO DECIDE THEM AFRESH IN THE LIGHT OF THE ABOVE MENTIONED JUDGMENT OF THE APEX COURT (SUPRA) (*) . WE ORDER ACCORDINGLY. AO SHALL GRANT A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER THE SET PRINCIPLES OF NATURAL JUSTICE. ACCORDINGLY, RELEVANT GROUNDS RAISED IN THE ASSESSEE S APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. (*) CHENNAI PROPERTIES AND INVESTMENTS LTD. VS. CIT [2015] 373 ITR 673 (SC) THOUGH THE LD. AR ARGUED THE APPEAL ON MERITS AS WELL, THE F ACT OF THE MATTER IS THAT THE ASSESSMENT OF THE IMPUGNED INCOME IS SET ASIDE , SO THAT IT DOES NOT SURVIVE, AND THERE IS THEREFORE NO QU ESTION OF LEVY OF PENALTY IN ITS RESPECT . THE PL EA BY THE LD. DR WITH REGARD TO LIBERTY BEING EXTENDED TO THE REVENUE, THE SAME IS SUPERFLUOUS IN - AS - MUCH AS THERE IS NO ESTOPPEL AGAINST LAW AND , SURELY , THE REVENUE, WHERE IT CONSIDERS PROPER, COULD INITIATE PENALTY PROCEEDINGS, WHICH ARE SEPARATE AND DISTINCT PROCEEDINGS FROM THE QUANTUM PROCEEDINGS . WE, ACCORDINGLY , ALLOWING THE ASSESSEES PLEA FOR A SET ASIDE OF THE IMPUGNED PENALTY, DIRECT SO QUA THE PENALTY LEVIED ON THIS INCOME . WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE ASSESSEES APPEAL IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON JUNE 30 , 201 6 SD/ - (S ANJAY ARORA) / A CCOUNTANT MEMBER MUMBAI ; DATED : 30 . 0 6 .201 6 . . ./ ROSHANI , SR. PS 4 ITA NO. 649/MUM/2015 (A.Y. 2008 - 09) BAKUL INVESTMENTS PRIVATE LIMITED VS. ITO / 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 F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI