Parija Construction Company Pvt. ltd, Bhubaneswar V. ITO, Bhubaneswar

ITA 650/CTK/2012

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7206 (ITAT-CUTTACK)
• Duration Of Justice: 4 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-02-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 28-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: S ANDEEP K JENA
• Keywords: Reopening of assessment; Business income
• Section: 143(3); 147

Judgement Text

1 ITA NOS.650 & 651/CTK/2012 ASSESSMENT YEARS: 2006 - 07 & 2008 - 09 IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NOS.650 & 651/CTK/2012 ASSESSMENT YEARS : 2006 - 07 & 2008 - 09 M/S. PARIJA CONSTRUCTION CO.PVT.LTD., FLAT NO.107, NIRMALA PLAZA, A - 1, FOREST PARK, BHUBANESWAR. VS. ITO, WARD 1(3), BHUBANESWAR. PAN/GIR NO. AACCP 9612 L (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S ANDEEP K.JENA, AR REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 1 /02 / 2017 DATE OF PRONOUNCEMENT : 1/02 / 2017 O R D E R THESE ARE APPEAL S F ILED BY THE ASSESSEE AGAINST SEPARATE ORDER S OF CIT(A) - 1, BHUBANESWAR , BOTH DATED 10.10.2012 , FOR THE ASSESSMENT YEAR S 2006 - 07 AND 2008 - 09 . 2. IN GROUND NO.(A) OF BOTH THE ASSESSMENT YEARS, THE ASSESSEE HAS CHALLENGED THE REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE I.T.ACT, 1961 2 ITA NOS.650 & 651/CTK/2012 ASSESSMENT YEARS: 2006 - 07 & 2008 - 09 3. AT THE TIME OF HEARING, LD A.R. OF THE ASSESSEE DID NOT PRESS THIS GROUND AND , HENCE SAME IS DISMISSED AS NOT PRESSED. 4. THE COMMON ISSUE INVOLVED IN GROUND NO.( B) OF THE APPEAL IN BOTH THE YEARS UNDER APPEAL IS THAT THE CIT(A) ERRED IN HOLDING THAT THE RENTAL INCOME EARNED FROM THE PROPERTY WAS INCOME FROM HOUSE PROPERTY AND NOT BUSINESS INCOME AS CLAIMED BY THE ASSESSEE. 5. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS EARNED GROSS RENTAL INCOME OF RS.8,32,200/ - IN A.Y. 2006 - 07 AND RS.8,97,656/ - IN A.Y. 200 8 - 09. HE OBSERVED THAT THE ASSESSE E OWNS FOUR FLATS BEARING NOS.A - 101, A - 103, A - 104 AND A - 105 AT NIRMALA PLAZA, 1 ST FLOOR, A - 1, FOREST PARK, BHUBANESWAR. THE SAID PROPERTY WAS PURCHASED FROM M/S. UTKAL BUILDERS (P) LTD., DURING THE YEAR 2001 - 02. HE ALS O FOUND THAT THE LICENSEES WILL BEAR THE COST TOWARDS ELECTRICITY, LIFT CHARGES, COMMON ELECTRICITY CHARGES, WATER CHARGES, SECURITY A ND BUILDING MAINTENANCE CHARGES ETC. THE ASSESSING OFFICER FOUND THAT THE OCCUPANTS WERE NOT SEPARATELY CHARGED FOR SERVI CES RENDERED AND THAT THE PRIME OBJECT OF THE LEASE AGREEMENTS WAS TO LET OUT FOR RENTAL INCOME. RELYING ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SAMBHU INVESTMENT PVT LTD VS CIT, 263 ITR 143 (SC), THE ASSESSING OFFICER HELD THAT THE RENTAL INCOME WAS TO BE ASSESSED AS INCOME FROM HOUSE PROPERTY AND NOT AS INCOME FROM BUSINESS. 3 ITA NOS.650 & 651/CTK/2012 ASSESSMENT YEARS: 2006 - 07 & 2008 - 09 6. ON APPEAL, LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 7. BEFORE ME, LD A.R. OF THE ASSESSEE SUBMITTED THAT IN ASSESSMENT YEAR 2002 - 03, THE ASSESSEE HAD SHOWN THE RENTAL INCOME FROM THE PROPERTY AS INCOME FROM BUSINESS AND SAME WAS ACCEPTED BY THE DEPARTMENT, FOR WHICH, HE PLACED AT PAGE 4 OF THE PAPER BOOK, COPY OF INCOME RETURN OF INCOME. FURTHER, HE SUBMITTED T HAT IN A.Y. 2004 - 05 ALSO, THE ASSESSEE HAD SHOWN THE RENTAL INCOME FROM THE PROPERTY AS BUSINESS INCOME, WHICH WAS ACCEPTED BY THE DEPARTMENT AND HAS FILED AT PAGE 7 OF THE PAPER BOOK, COPY OF THE INCOME TAX RETURN. HE FURTHER SUBMITTED THAT IN ASSESSMENT YEAR 2005 - 06 ALSO, THE ASSESSEE HAD SHOWN THE RENTAL INCOME FROM THE PROPERTY AS INCOME FROM BUSINESS, WHICH WAS ACCEPTED BY THE DEPARTMENT, FOR WHICH, HE FILED AT PAGE 9 OF THE PAPER BOOK, COPY OF THE INCOME TAX RETURN. HE FURTHER SUBMITTED THAT IN A.Y. 2009 - 10, THE ASSESSEE HAD SHOWN THE INCOME FROM THE PROPERTY AS BUSINESS INCOME, WHICH WAS ACCEPTED BY THE DEPARTMENT AND HAS FILED COPY OF INCOME TAX RETURN AT PAGE 15 OF THE PAPER BOOK. HE FURTHER SUBMITTED THAT IN A.Y. 2010 - 11, THE INCOME FROM PROPERT Y SHOWN AS BUSINESS INCOME WAS ACCEPTED BY THE DEPARTMENT AND FILED THE COPY OF INCOME TAX RETURN AT PAGE 19 OF THE PAPER BOOK. HE SUBMITTED THAT IN AN ASSESSMENT MADE UNDER SECTION 143(3) FOR A.Y. 2011 - 12 ORDER DATED 10.2.2014, THE ASSESSING OFFICER HAS ACCEPTED THE INCOME FROM THE PROPERTY AS BUSINESS INCOME , COPY OF WHICH IS PLACED AT 24 OF PAPER BOOK . THEREFORE, HE SUBMITTED THAT THOUGH THE PRINCIPLE OF RES - JUDICATA IS NOT 4 ITA NOS.650 & 651/CTK/2012 ASSESSMENT YEARS: 2006 - 07 & 2008 - 09 APPLICABLE IN THE INCOME TAX PROCEEDINGS BUT CONSISTENCY SHOULD BE MAINTAINED U NTIL AND UNLESS CHANGE IN FACTS ARE SHOWN BY THE DEPARTMENT. FOR THIS PROPOSITION, HE RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF RADHASOAMI SATSANG VS CIT, 193 ITR 321 (SC), WHEREIN, IT HAS BEEN HELD THAT UNLESS THERE IS A MATERIAL CH ANGE IN JUSTIFYING THE REVENUE TO TAKE A DIFFERENT VIEW THE EARLIER VIEW WHICH HAS BEEN SETTLED AND ACCEPTED OF A SEVERAL YEARS SHOULD NOT BE DISTURBED. 8. THE DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND COULD NOT CONTROVERT THE SUBMISSION OF THE AR OF THE ASSESSEE. 9. I FIND IN THE ASSESSMENT YEARS 2002 - 03, 2004 - 05, 2005 - 06, 2009 - 10, 2010 - 11 AND 2011 - 12 , THE DEPARTMENT HAS ACCEPTED THE INCOME FROM THE PRO PERTY IN QUESTION OF THE ASSESSEE AS BUSINESS INCOME AND ONLY IN THE ASSESSMENT YEARS 2006 - 07 AND 2008 - 09, THE DEPARTMENT HAS ASSESSED THE INCOME FROM THE PROPERTY UNDER THE HEAD INCOME FROM HOUSE PROPERTY . THE HONBLE SUPREME COURT IN THE CASE OF RAD HASOAMI SATSANG (SUPRA) HAS HELD THAT THAT UNLESS THERE IS A MATERIAL CHANGE IN JUSTIFYING THE REVENUE TO TAKE A DIFFERENT VIEW THE EARLIER VIEW WHICH HAS BEEN SETTLED AND ACCEPTED OF A SEVERAL YEARS SHOULD NOT BE DISTURBED. STILL FURTHER, THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. EXCEL INDUSTRIES LIMITED, 358 ITR 295 (SC) REITERATED THE LAW LAID DOWN IN RADHASOAMI SATSANG VS CIT (SUPRA) TO HOLD THAT WHERE A FUNDAMENTAL ASPECT PERMEATING THROUGH THE DIFFERENT ASSESSMENT YEARS HAVE BEEN FOUND AS A 5 ITA NOS.650 & 651/CTK/2012 ASSESSMENT YEARS: 2006 - 07 & 2008 - 09 FACT ONCE WAY OR THE OTHER, AND THE PARTIES HAVE ALLOWED THE POSITION TO BE SUSTAINED BY NOT CHALLENGING THE ORDER, IT IS NOT ALLOWED TO CHANGE THE POSITION IN ANY SUBSEQUENT YEAR. HENCE, RESPECTFULLY FOLLOWING THE DECISION IN THE CASE OF RADHASOAMI SAT SANG (SUPRA) AND EXCEL INDUSTRIES LIMITED (SUPRA) , I AM OF THE CONSIDERED VIEW THAT THE INCOME FROM THE PROPERTY TO BE ASSESSED AS BUSINESS INCOME AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 10. THE COMMON GROUND NO.(C) IN B OTH THE ASSESSMENT YEARS REA DS AS UNDER: THAT WITHOUT PREJUDICE TO THE GROUND NO.A & B AS STATED ABOVE THE CIT(A) IS NOT CORRECT IN ALLOWING INTEREST ON BORROWED CAPITAL AMOUNTING RS.177224 IN STEAD OF RS.244,424/ - (IN A.Y. 2006 - 07) AND RS.5,18,571/ - IN A.Y. 2008 - 09). 11. THE AR OF THE ASSESSEE DID NOT MAKE ANY SUBMI SSION ON THE ABOVE GROUND OF APPEAL. HENCE, THE SAME IS DISMISSED FOR WANT OF PROSECUTION. 12. IN THE RESULT, THE APPEAL S FILED BY THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOU NCED IN THE OPEN COURT ON 01/02 / 2017 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 1/02 /2017 6 ITA NOS.650 & 651/CTK/2012 ASSESSMENT YEARS: 2006 - 07 & 2008 - 09 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE ECRETARY ITAT, CUTTACK 1. THE APPELLANT : M/S. PARIJA CONSTRUCTION CO.PVT.LTD., FLAT NO.107, NIRMALA PLAZA, A - 1, FOREST PARK, BHUBANESWAR. 2. THE RESPONDENT. ITO, WARD 1(3), BHUBANESWAR. 3. THE CIT(A) - 1, BHUBANESWAR 4. CIT , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//