NAVSARI OIL PRODUCTS P. LTD, MUMBAI V. DCIT CEN CIR 39, MUMBAI

ITA 6576/MUM/2012

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4510 (ITAT-MUMBAI)
• Duration Of Justice: 8 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 30-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: THARIAN OOMMEN LD
• Assessee Lawyers: MADHUR AGARWALLD
• Keywords: Business income; Depreciation; Business expenditure; Rectification of order; Rule of consistency; Capital expenditure
• Section: 143(3); 143(1); 13; 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE HONBLE SHRI AMARJIT SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ ITA NO. 8665/MUM/2010 ( / ASSESSMENT YEAR: 2004-05) & ./ ITA NO. 6576/MUM/2012 ( / ASSESSMENT YEAR: 2007-08) & ./ ITA NO. 8553/MUM/2011 ( / ASSESSMENT YEAR: 2008-09) M/S. NAVSARI OIL PRODUCTS PVT.LTD. C/O VVF LIMITED, PLOT NO.109 SION (EAST), MUMBAI-400 025 / VS. ITO - CC 7(1)(3) AAYKAR BHAVAN MUMBAI 400 020 !' ./ ./PAN/GIR NO. AAACN-1387-N ( '$ /APPELLANT ) : ( %&'$ / RESPONDENT ) ( '$ /APPELLANT ) : ( %&'$ / RESPONDENT ) ASSESSEE BY : SHRI MADHUR AGARWAL-LD.AR REVENUE BY : SHRI THARIAN OOMMEN-LD. DR / DATE OF HEARING : 01/02/2021 / DATE OF PRONOUNCEMENT : 09/02/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEALS BY ASSESSEE FOR ASSESSMENT YEA RS (AY) 2004-05, 2007-08 & 2008-09 CONTEST SEPARATE ORDERS OF LEARNED FIRST APPELLATE AUTHORITY. HOWEVER THE FACTS AS WEL L AS ISSUES ARE 2 MORE OR LESS IDENTICAL AND THEREFORE, THE APPEALS W ERE HEARD TOGETHER AND ARE NOW BEING DISPOSED-OFF BY WAY OF T HIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. THE APPEAL FOR AY 2004-05 ARISES OUT OF ORDER DA TED 17/09/2010 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-41, MUMBAI [CIT(A)], APPEAL NO.DCCC-35/IT .165/10-11. THE ASSESSMENT WAS FRAMED BY LD. ASSESSING OFFICER (AO) U/S 143(3) ON 30/11/2006. THE ONLY GROUNDS URGED BEFORE US ARE GROUND NOS. 2 TO 4 WHICH READ AS UNDER: - GROUND NO. 2: THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE AP PELLANT CONTINUES TO RUN ITS BUSINESS AND GROSSLY ERRED IN CONFIRMING THE ACTION OF THE LEARNED AO OF DISALLOWING RS.42,53,152/- OF RETRENCHMENT COMPENSA TION, WITHOUT APPRECIATING THE FACT THAT SUCH COMPENSATION IS PAI D UNDER SECTION 25F OF INDUSTRIAL DISPUTES ACT AND IS A DEDUCTIBLE EXPENDI TURE. GROUND NO. 3: (I) THE LEARNED CIT(A) GROSSLY ERRED IN CONFIRMIN G THE ACTION OF THE LEARNED AO TO TREAT THE ENTIRE LEASE RENTALS OF RS.30,33,60 0/- INCLUDED UNDER THE HEAD 'INCOME FROM BUSINESS' TO BE 'INCOME FROM PROPERTY' OF RS. 27,00,000/- AND 'INCOME FROM OTHER SOURCES' OF RS.3,33,600/-. (II) WITHOUT PREJUDICE TO ABOVE, THE LEARNED CIT(A ) GROSSLY ERRED IN CONFIRMING THE ACTION OF THE LEARNED AO OF DISALLOWING RS.17,2 9,197/- BEING DEPRECIATION ON ASSETS GIVEN ON LEASE RENTAL, U/S 57(II) OF THE INCOME TAX ACT, 1961. GROUND NO. 4: THE LEARNED CIT(A) GROSSLY ERRED IN CONFIRMING THE ACTION OF THE LEARNED AO OF MAKING AN ADDITION OF NOTIONAL RENTAL INCOME OF RS. 19,60,888/-. 3. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD INCLUDING THE ORDERS OF LOWER AUTHORITIES AND DOCUMENTS PLACED IN THE PAPER BOOK. OUR ADJUDIC ATION TO THE SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCE EDING PARAGRAPHS. 4.1 THE MATERIAL FACTS ARE THAT THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE IS STATED TO BE ENGAGED IN MANUF ACTURING OF FATTY ACIDS ETC. DURING ASSESSMENT PROCEEDINGS, UPO N PERUSAL OF 3 FINANCIAL STATEMENTS, LD. AO FORMED AN OPINION THAT THE ASSESSEE DID NOT CARRY OUT ANY MANUFACTURING ACTIVITY DURING THE YEAR BUT CARRIED OUT ONLY CIRCULAR TRADING TRANSACTIONS WITH ITS ASSOCIATED CONCERNS NAMELY M/S VVF LIMITED. THE ASSESSEE HAD T WO OTHER ASSOCIATED CONCERNS NAMELY M/S R. EXPORTS PRIVATE L IMITED AND M/S VITA SOAPS & SPECIALTIES (A PARTNERSHIP FIRM CL AIMING 100% DEDUCTION U/S 80-IB) (IN SHORT VSS). IT WAS ALLEGED THAT THE ASSESSEE GROUP WAS INDULGING IN COLORABLE TAX AVOID ANCE DEVICES IN ORDER TO INFLATE PROFITS OF CONCERNS CLAIMING 10 0% DEDUCTION U/S 80-IB. 4.2 SINCE THE ASSESSEE DID NOT CARRY OUT ANY MANUFA CTURING ACTIVITY DURING THE YEAR, LD. AO OPINED THAT NO DEP RECIATION COULD BE ALLOWED ON PLANT & MACHINERY SINCE THE SAME WERE NOT USED FOR THE BUSINESS PURPOSES. RATHER THE PREMISES WAS LEAS ED OUT BY THE ASSESSEE ALONG WITH MACHINERY TO M/S VVF ON ONE SID E AND NEW BUILDING CONSTRUCTED BY M/S VSS ON BEHALF OF THE AS SESSEE AND PARTLY LET OUT BY THE ASSESSEE TO M/S VSS. THE LEAS E INCOME THUS EARNED WAS OFFERED AS BUSINESS INCOME WHICH LD. A O PROPOSED TO ASSESS AS INCOME FROM HOUSE PROPERTY IN THE BA CKDROP OF HIS AFORESAID FINDINGS. THE ASSESSEE DEFENDED ITS STAND BY RELYING UPON OBJECT CLAUSE IN ITS MEMORANDUM OF ASSOCIATION WHICH ENABLED THE ASSESSEE TO ENTER INTO ANY ARRANGEMENT CONDUCIVE TO THE COMPANYS OBJECTS. HOWEVER, THIS PLEA COULD NOT CONVINCE LD. AO SINCE THE STATED FACT ALONE WOULD NOT BE DECISIV E TO DETERMINE THE HEADS OF INCOME. 4.3 IT WAS ALSO OBSERVED THAT THE ASSESSEE ENTERED INTO 10 SEPARATE AGREEMENTS WITH ITS ASSOCIATED CONCERNS WH ICH WERE IN 4 THE NATURE OF LEASE AGREEMENTS, MANUFACTURING FACIL ITY LEASE, RENT FOR FACTORY PREMISES ETC. THE BRIEF DETAILS OF THES E AGREEMENTS HAVE BEEN EXTRACTED IN PARA 5.2 OF THE ASSESSMENT ORDER. ALL THESE AGREEMENTS WERE OLD AGREEMENTS ENTERED INTO BY THE ASSESSEE AS EARLY AS 03/06/1989 AND AS LATE AS 01/08/2003. UPON PERUSAL OF THE SAME, LD. AO OPINED THAT THE ASSESSEE HAD BEEN SHED DING ITS BUSINESS PREMISES AND PLANT & MACHINERY IN PHASED M ANNER RIGHT FROM YEAR 1995 TO ITS ASSOCIATED CONCERNS. THE ASSE SSEE DEFENDED ITS STAND OF OFFERING RENTAL / LEASE INCOME AS BUS INESS INCOME BY SUBMITTING THAT IN EARLIER YEARS, THIS POSITION WAS ACCEPTED BY THE DEPARTMENT AT ASSESSMENT LEVEL ITSELF. HOWEVER, IN THE BACKGROUND OF RATIOS OF VARIOUS JUDICIAL PRONOUNCEMENTS HOLDIN G THE FIELD, LD. AO ULTIMATELY HELD THAT RENT RECEIVED FROM BUILDING WAS TO BE ASSESSED UNDER INCOME FROM HOUSE PROPERTY WHEREAS RENT RECEIVED ON MACHINERY AND OTHER ASSET WAS TO BE TAX ED AS INCOME FROM OTHER SOURCES. THE ALTERNATIVE CLAIM THAT THE DEPRECIATION SHOULD BE ALLOWED U/S 57(II) WAS ALSO REJECTED SINC E THE ASSESSEE WAS NOT HIRER OF PLANT, MACHINERY AND FURNITURE ETC . 4.4 PROCEEDING FURTHER, IT WAS NOTED THAT THE ASSES SEE WAS RECEIVING NOMINAL RENT OF RS.10000/- FROM M/S VSS F OR USING THE PREMISES OF 1740.20 SQ. METERS AT DAMAN. M/S VSS HA D MET THE ENTIRE COST OF CONSTRUCTION OF THE LET OUT PREMISES TO THE TUNE OF RS.163.40 LACS WHICH WAS SHOWN UNDER THE HEAD SUNDR Y CREDITORS. IN THE LEASE AGREEMENT, THIS AMOUNT WAS SHOWN AS IN TEREST FREE SECURITY DEPOSIT. HOWEVER, LD. AO, FINDING THE AGRE ED RENT TO BE HIGHLY UNIMAGINABLE, WORKED OUT ADDITIONAL RENT OF RS.19.60 LACS, 5 BEING 12% SIMPLE INTEREST ON INTEREST FREE SECURITY DEPOSIT OF RS.163.40 LACS. 4.5 THE LAST ADDITION WAS ON ACCOUNT OF RETRENCHMEN T COMPENSATION. THE ASSESSEE PAID A SUM OF RS.42.53 L ACS TO CERTAIN EMPLOYEES AS RETRENCHMENT COMPENSATION. THE LD. AO OPINED THAT THE SAME WOULD BRING ENDURING ADVANTAGE OR BENEFIT RESULTING INTO REDUCTION OF RECURRING EXPENDITURE A ND THEREFORE, IT WOULD BE IN THE NATURE OF CAPITAL EXPENDITURE. ALTE RNATIVELY, THE EXPENDITURE WOULD BE AMORTIZED OVER A PERIOD OF 5 Y EARS. IN THE ABSENCE OF ANY SATISFACTORY EXPLANATION FORTHCOMING FROM THE ASSESSEE, THE EXPENDITURE SO CLAIMED WAS FULLY DISA LLOWED U/S 37(1). 4.6 FINALLY, LEASE INCOME FROM BUILDINGS WAS ASSESS ED AS INCOME FROM HOUSE PROPERTY WHEREAS LEASE INCOME F ROM PLANT & MACHINERY WAS ASSESSED AS INCOME FROM OTHER SOURCE S. NO DEDUCTION WAS ALLOWED U/S 57(II). THE DEPRECIATION ON LEASED BUILDING AND PLANT & MACHINERY WAS DENIED. FINALLY THE RETURNED LOSS OF RS.148.18 LACS WAS REDUCED TO RS.51.83 LACS . HOWEVER, THE DETERMINED LOSS WOULD BE INCREASED BY RS.30.33 LACS SINCE THESE RECEIPTS WERE ASSESSED UNDER OTHER HEADS BUT WERE NOT REDUCED FROM BUSINESS INCOME WHILE COMPUTING THE ASSESSEES INCOME. THE NECESSARY DIRECTIONS HAVE ALREADY BEEN ISSUED BY LD. CIT(A) IN PARA 6.1 OF THE IMPUGNED ORDER. 5. THOUGH THE ASSESSEE PREFERRED FURTHER APPEAL ASS AILING THE STAND OF LD. AO IN DISTURBING THE COMPUTATIONS MADE BY THE ASSESSEE, HOWEVER, THE SAME COULD NOT FIND FAVOR WI TH LD. CIT(A) WHO CHOSE TO CONFIRM THE ACTION OF LD. AO IN TOTO EXCEPT FOR 6 DIRECTIONS IN PARA 6.1 OF THE IMPUGNED ORDER AS ENU MERATED BY US IN PRECEDING PARAGRAPHS. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. OUR ADJUDICATION 6. UPON DUE CONSIDERATION, WE FIND THAT THOUGH THER E ARE VARIOUS ALLEGATIONS IN THE ASSESSMENT ORDER THAT THE ASSESS EE GROUP WAS INDULGING IN COLORABLE TAX AVOIDANCE DEVICES, HOWEV ER, THE TRADING RESULTS SHOWN BY THE ASSESSEE HAVE ULTIMATELY BEEN NOT DISTURBED BY LD. AO. WHAT HAS BEEN DONE IS THE FACT THAT RENT AL INCOME FROM BUILDINGS HAS BEEN ASSESSED AS INCOME FROM HOUSE P ROPERTY WHEREAS LEASE INCOME FROM PLANT & MACHINERY HAS BEE N ASSESSED AS INCOME FROM OTHER SOURCES. IN THE PROCESS DEPR ECIATION ON THESE ASSETS HAS BEEN DENIED TO THE ASSESSEE. IT CO ULD ALSO BE OBSERVED THAT BY ACCEPTING THE TRADING RESULTS, LD. AO HAS ACCEPTED THE FACT THAT ASSESSEES BUSINESS WAS CONT INUING DESPITE THE OBSERVATION THAT NO MANUFACTURING ACTIVITY WAS BEING CARRIED OUT BY THE ASSESSEE DURING THE YEAR WHICH IS ALSO EVIDE NT FROM THE FACT THAT EXCEPT FOR DEPRECIATION ALLOWANCE, RETRENCHMEN T COMPENSATION ALONG WITH MINOR DISALLOWANCES, ALL OTHER BUSINESS EXPENDITURE AS CLAIMED BY THE ASSESSEE HAS BEEN ALLOWED BY LD. AO. 7. PROCEEDING FURTHER, WE FIND THAT VARIOUS LEASE A GREEMENTS OF BUILDINGS AND PLANT & MACHINERY, ENTERED INTO BY TH E ASSESSEE, WERE CONTINUING SINCE PAST MANY YEARS AND THE ASSES SEE EARNED RENTAL / LEASE INCOME IN SIMILAR MANNER SINCE AY 19 99-2000 AND OFFERED THE SAME AS BUSINESS INCOME. THE ASSESSEE S STAND HAS ALWAYS BEEN ACCEPTED BY THE DEPARTMENT IN MOST OF O THER YEARS. 7 THE LD. AR HAS TABULATED THE ASSESSMENT POSITION, A LONG WITH DOCUMENTARY EVIDENCES, FOR VARIOUS YEARS IN THE FOL LOWING MANNER:- NO. AY INTIMATION / ASSESSMENT ORDER TOTAL INCOME AS PER RETURN ASSESSED AS PER INTIMATION / ASSESSMENT ORDER ACCEPTED AS BUSINESS INCOME ATTACHED - ITR/ COMPUTATION / INTIMATION / ASSESSMENT ORDER 1 1999-00 INTIMATION U/S. 143(1) 8,41,071 8,41,071 YES 1-3 2 2000-01 NO INTIMATION/ NO ORDER 11,97,846 YES 4-5 3 2001-02 NO INTIMATION/ NO ORDER 4,17,040 YES 6-7 4 2002-03 ASSESSMENT ORDER U/S. 143(3) 12,93,330 12,93,330 YES 8-11 5 2003-04 INTIMATION U/S. 143(1) 11,00,790 11,00,790 YES 12-14 6 2005-06 RECTIFICATION ORDER U/S. 154 AGAINST INTIMATION U/S. 143(1) -15,445 -15,445 YES 15-16 7 2006-07 RECTIFICATION ORDER U/S. 154 AGAINST INTIMATION U/S. 143(1) -7,66,273 -7,66,275 YES 17-18 8 2009-10 ASSESSMENT ORDER U/S. 143(3) NIL 25,48,473 PENDING BEFORE CIT(A) 19-30 9 2010-11 ASSESSMENT ORDER U/S. 143(3) NIL (AFTER SET-OFF OF BROUGHT FORWARD LOSS OF RS. 9,47,198) NIL (AFTER SET-OFF OF BROUGHT FORWARD LOSS OF RS. 9,47,198) YES 31-34 10 2011-12 ASSESSMENT ORDER U/S. 143(3) 2,01,53,083 2,18,78,953 (DENIED SET-OFF OF LOSS OF AY 2004-05 OF RS. 17,25,870/-) YES 35-38 11 2012-13 NO INTIMATION/ NO ORDER 2,85,35,121 39 12 2013-14 ASSESSMENT ORDER U/S. 143(3) 72,11,849 72,11,849 YES 40-43 13 2014-15 INTIMATION U/S. 143(1) -67,11,748 -67,11,748 YES 44-55 14 2015-16 INTIMATION U/S. 143(1) -3,54,56,694 -3,54,56,694 YES 56-67 15 2016-17 INTIMATION U/S. 143(1) 8,72,819 8,72,819 YES 68-79 16 2017-18 INTIMATION U/S. 143(1) NIL (AFTER SET-OFF OF BROUGHT FORWARD LOSS OF RS. 14,61,264) NIL (AFTER SET-OFF OF BROUGHT FORWARD LOSS OF RS. 14,61,264) YES 80-93 17 2018-19 INTIMATION U/S. 143(1) NIL (AFTER SET-OFF OF BROUGHT FORWARD LOSS OF RS. 17,59,914) NIL (AFTER SET-OFF OF BROUGHT FORWARD LOSS OF RS. 17,59,914) YES 94-106 18 2019-20 INTIMATION U/S. 143(1) 15,70,205 15,70,205 YES 107-121 8 IT COULD BE GATHERED THAT RENTAL / LEASE INCOME SO EARNED BY THE ASSESSEE HAS BEEN ACCEPTED BY THE REVENUE AS BUSIN ESS INCOME ALL ALONG SINCE AY 1999-2000 EXCEPT FOR THIS ASSESS MENT YEAR AND AYS 2007-08 & 2008-09. THOUGH UNDISPUTEDLY, THE PRI NCIPLE OF RES - JUDICATA IS NOT APPLICABLE TO INCOME TAX PROCEEDING S BUT THE RULE OF CONSISTENCY WOULD DEMAND THAT ACCEPTED POSITION IS NOT DISTURBED ON IDENTICAL FACTS AS PER THE DECISION OF HONBLE B OMBAY HIGH COURT IN THE CASE OF PCIT V/S. QUEST INVESTMENT ADVISORS PVT. LTD. REPORTED IN [2018] 409 ITR 545 WHEREIN IT HAS BEEN HELD THAT WHEN A PRINCIPLE HAS BEEN ACCEPTED BY THE REVENUE IN EAR LIER YEARS AS WELL AS IN SUBSEQUENT YEARS THEN THE REVENUE IS BOU ND BY IT UNLESS THERE IS A CHANGE IN LAW OR CHANGE IN FACTS THEREIN , WHICH CHANGE HAS TO BE POINTED OUT IN THE ASSESSMENT ORDER. IN S O DOING THE JURISDICTIONAL HIGH COURT FOLLOWED THE JUDGMENT OF THE SUPREME COURT IN BHARAT SANCHAR NIGAM LTD. V/S. UNION OF INDIA REPOR TED IN [2006] 282 ITR 273 WHERE THE COURT HAD DRAWN A DISTINCTION BETWEEN THE PRINCIPLE OF RES JUDICATA AND CONSISTEN CY. THE DECISION OF HONBLE APEX COURT IN RADHASOAMI SATSANG V/S CIT (193 ITR 321) ALSO FAVOR THE SAME PROPOSITION. 8. THEREFORE, ON THE FACTS AND CIRCUMSTANCES, THE A CTION OF LD. AO IN DISTURBING THE RENTAL / LEASE INCOME AS BUSI NESS INCOME COULD NOT BE HELD TO BE JUSTIFIED. ONCE THE ASSESSE ES POSITION HAS BEEN ACCEPTED IN SO MANY PAST AS WELL AS SUCCEEDING YEARS, THERE IS NO REASON TO DISTURB THE SAME ONLY IN FEW YEARS, THE FACTS BEING REMAINING THE SAME. THEREFORE, WE ARE INCLINED TO H OLD THAT THE RENTAL / LEASE INCOME FROM BUILDING AS WELL AS FROM PLANT & MACHINERY WAS ASSESSABLE AS BUSINESS INCOME ONLY. 9 CONSEQUENTLY, THE ASSESSEE WOULD BE ENTITLED FOR DE PRECIATION ON THESE ASSETS. IN SUCH A SCENARIO, THE QUESTION OF D ETERMINING THE NOTIONAL RENTAL INCOME WOULD NOT, AT ALL, ARISE. WE ORDER SO. GROUND NOS.3 & 4 STAND ALLOWED TO THAT EXTENT. 9. SO FAR AS THE ISSUE OF RETRENCHMENT COMPENSATION IS CONCERNED, LD. AR CORRECTLY POINTED OUT THAT THE PA YMENT WAS COVERED BY THE PROVISIONS OF SEC.35DDA AND ACCORDIN GLY, THE SAME SHOULD BE ALLOWABLE IN 5 EQUAL INSTALLMENTS. CONCUR RING WITH THE SAME, WE DIRECT LD. AO TO ALLOW 1/5 TH OF RETRENCHMENT COMPENSATION PAID DURING THE YEAR. GROUND NO.2 STAN D PARTLY ALLOWED. THE APPEAL STAND PARTLY ALLOWED IN TERMS O F OUR ABOVE ORDER. ITA NO.3576/MUM/2012, AY 2007-08 10. THE REGISTRY HAS NOTED A DELAY OF 392 DAYS IN THIS APPEAL. THE CONDONATION OF THE SAME HAS BEEN SOUGHT BY THE ASSE SSEE ON THE STRENGTH OF CONDONATION PETITION DATED 23/10/2012 W HICH IS SUPPORTED BY THE AFFIDAVIT OF DIRECTOR OF THE ASSES SEE COMPANY. IT HAS BEEN SUBMITTED THAT THERE WAS A LAPSE ON THE PA RT OF TAX CONSULTANT IN FLING THE APPEAL WHICH CAME TO LIGHT ONLY DURING ENGAGEMENT OF NEW CONSULTANT. THE LD. AR ALSO RELIE D UPON THE DECISION OF HONBLE APEX COURT IN ANIL KUMAR NEHRU V/S ACIT (101 TAXMANN.COM 191) AS WELL AS IN CIT V/S PROGRESSIVE EDUCATION SOCIETY (102 TAXMANN.COM 402) TO SUPPORT THE CONDONATION OF DELAY. THOUGH LD. DR OPPOSED THE CONDONATION OF DELAY, HOW EVER, UPON PERUSAL OF CASE RECORDS, WE FIND THAT THE ISSUES IN THIS YEAR ARE QUITE SIMILAR TO ISSUE RAISED IN AY 2004-05. THE AP PEAL FOR AY 10 2004-05 HAS BEEN FILED IN TIME. HENCE, IT COULD BE VIEWED THAT THE ASSESSEE HAD INCLINATION TO CONTEST THE ISSUE BY WA Y OF FURTHER APPEAL AND THE PLEA THAT THERE WAS LAPSE ON THE PAR T OF TAX CONSULTANT WAS TO BE ACCEPTED. FINDING THE ARGUMENT S TO BE PLAUSIBLE ONE, WE CONDONE THE DELAY AND PROCEED WIT H ADJUDICATION OF THE APPEAL. 11. AS STATED, THE ASSESSEE IS, MORE OR LESS, SIMIL ARLY AGGRIEVED IN THIS YEAR. WHILE FRAMING ASSESSMENT U/S 143(3) O N 31/12/2009, THE LEASE INCOME IS PROPOSED TO BE ASSESSED AS INC OME FROM OTHER SOURCES. CONSEQUENTLY, 90% OF MAJOR EXPENDITURE CO MPRISING-OFF OF SALARIES, ADMINISTRATION AND RENT ETC. HAS BEEN DISALLOWED. THE SET-OFF OF BUSINESS LOSSES HAS BEEN DENIED. THE STA ND OF LD. AO, UPON CONFIRMATION BY LD. CIT(A), IS IN FURTHER CHAL LENGE BEFORE US. 12. SINCE FACTS ARE IDENTICAL IN THIS YEAR, FOLLOWI NG OUR ADJUDICATION FOR AY 2004-05, WE HOLD THAT RENTAL / LEASE INCOME WAS TO BE ASSESSED AS BUSINESS INCOME ONLY. CONSEQUENTLY, T HE ASSESSEE WOULD BE ENTITLED FOR DEDUCTION OF BUSINESS EXPENDI TURE AS WELL AS SET-OFF OF CARRY FORWARD LOSSES. THE LD. AO IS DIRE CTED TO RE- COMPUTE THE INCOME IN TERMS OF OUR ABOVE ORDER. THE APPEAL STAND ALLOWED IN TERMS OF OUR ABOVE ORDER. ITA NO.8553/MUM/2011, AY 2008-09 13. THE FACTS IN THIS YEAR ARE QUITE IDENTICAL TO A Y 2007-08. WHILE FRAMING ASSESSMENT U/S 143(3) ON 23/11/2010, THE LE ASE INCOME IS PROPOSED TO BE ASSESSED AS INCOME FROM OTHER SOURC ES. CONSEQUENTLY, SALARY EXPENSES TO THE EXTENT OF 75%, REPAIRS TO BUILDING FOR RS.1.73 LACS AND PROFESSIONAL FEES OF RS.0.19 LACS HAS BEEN DISALLOWED BY LD. AO WHICH HAS BEEN CONFIR MED BY LD. 11 CIT(A). THE SET-OFF OF BUSINESS LOSSES HAS ALSO BEE N DENIED. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 14. SINCE FACTS ARE IDENTICAL AS IN AY 2007-08, FOL LOWING OUR ADJUDICATION FOR THAT YEAR, WE HOLD THE RENTAL / LE ASE INCOME WAS TO BE ASSESSED AS BUSINESS INCOME ONLY. CONSEQUENTLY , THE ASSESSEE WOULD BE ENTITLED FOR DEDUCTION OF SALARY EXPENDITURE, REPAIRS TO BUILDING AND PROFESSIONAL FEES AS WELL A S SET-OFF OF CARRY FORWARD LOSSES. THE LD. AO IS DIRECTED TO RE-COMPUT E THE INCOME IN TERMS OF OUR ABOVE ORDER. THE APPEAL STAND ALLOWED IN TERMS OF OUR ABOVE ORDER. CONCLUSION 15. THE APPEAL FOR AY 2004-05 STANDS PARTLY ALLOWED WHEREAS THE REMAINING TWO APPEALS STAND ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED ON 09 TH FEBRUARY, 2021. SD/- SD/- (AMARJIT SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER /ACCOUNTANT MEMBER MUMBAI; DATED : 09/02/2021 SR.PS, KASARLA THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. %&'$ / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT CONCERNED 5. ,-%. , . , / DR, ITAT, MUMBAI 6. -/01 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.