NARENDRAPAL GUPTA, MUMBAI V. ASST CIT CEN CIR 30, MUMBAI

ITA 6634/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3256 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 03-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER & SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.6634/MUM/2014 ASSESSMENT YEAR : 2011-12 SHRI NARENDRAPAL GUPTA, RAJA BAHADUR BLDG., 1 ST FLOOR, 28 B S MARG, FORT, MUMBAI- 400 023 PAN AAXPG2396L VS. ASST. CIT CEN CIR.30, MUMBAI (APPELLANT) RESPONDENT) APPELLANT BY : SHRI J P BAIRAGRA RESPONDENT BY : SHRI SANJEEV JAIN DATE OF HEARING : 3 0 .0 5 .201 6 DATE OF PRONOUNCEMENT : 08 .0 6 . 201 6 O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER THIS APPEAL BY ASSESSEE IS ARISING OUT OF THE ORDE R OF THE CIT(A) 39, MUMBAI, IN APPEAL NO.CIT(A)-39/IT-178/2013-14 DATED 15.01.2014. THE ASSESSMENT WAS FRAMED BY THE ACIT CEN. CIR 30, MUMB AI, FOR A.Y. 2011-12 VIDE HIS ORDER DATED 31.12.2013 U/S. 143(3) OF THE INCOME TA X ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(A) CONFIRMING THE ACTION OF THE AO IN TREATING LEASE RENTALS RECEIVED FOR FURNITURE AS TAXABLE UNDER THE HEAD INCOME FROM OT HER SOURCES INSTEAD OF INCOME DECLARED BY THE ASSESSEE AS INCOME FROM HOUSE PROP ERTY. ITA NO.6634/MUM/2014 SHRI NARENDRA PAL GUPTA 2 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE GON E THOUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND FROM THE CASE R ECORDS THAT THE AO ASSESSED THE INCOME DECLARED BY THE ASSESSEE FROM LEASE RENTALS RECEIVED FOR FURNITURE AS INCOME FROM OTHER SOURCE AS AGAINST DECLARED BY THE ASSES SEE AS INCOME FROM HOUSE PROPERTY. AGGRIEVED THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A), WHO JUST BY FOLLOWING EARLIER YEARS DECISION CONFIRMED THE ACTI ON OF THE AO VIDE PARA 3 & 4 OF HIS ORDER, WHICH READ AS UNDER: 3. THE ONLY GROUND RAISED IN THE APPEAL IS WITH RE GARD TO THE ACTION OF THE AO IN BRINGING TO TAX THE RENTAL INCOME FROM LEASE OF FURNITURE AND FIXTURES UNDER THE HEAD INCOME FROM OTHER SOURCES . THIS ISSUE HAS BEEN DEALT WITH BY ME FOR THE IMMEDIATELY PRECEDING YEAR , IN ORDER NO.CIT(A)39/AC.CC.30/IT-67/2012-13 DATED 11.03.2013 , WHEREIN IT HAS BEEN HELD AS UNDER:- I HAVE PERUSED THE TWO AGREEMENTS PRODUCED BY THE APPELLANT. IT IS SEEN THAT ONE AGREEMENT HAD BEEN ENTERED INTO FOR LEASE OF FURNITURE AND FIXTURES DATED 19.04.2008. AS PER TH E SAID AGREEMENT, THE APPELLANT/OWNER GAVE ON HIRE FURNITU RE, FIXTURES, ELECTRICAL ITEMS, A LIST OF WHCH HAS BEEN SET OUT A S PER THE SCHEDULE APPENDED TO THE AGREEMENT. AS PER SEC.56( 2)(II), THE INCOME FROM MACHINERY, PLANT OR FURNITURE LET OUT O N HIRE, IS CHARGEABLE UNDER INCOME FROM OTHER SOURCES. HENCE, FURNITURE AND FIXTURE AS SPELT OUT IN THE SEPARATE FURNITURE AND FIXTURES HIRE AGREEMENT HAS BEEN LEASED OUT AND HENCE, AS PE R LAW, IS ASSESSABLE UNDER THE HEAD OTHER SOURCES. HENCE, I DECLINE TO INTERFERE WITH THE ACTION OF THE A.O. 4. THERE IS NO DIFFERENCE IN THE FACTS FOR THE IMPU GNED YEAR AND HENCE, I AM OF THE VIEW THAT NO INTERFERENCE WITH T HE FINDING OF THE EARLIER YEAR IS WARRANTED. THE ACTION OF THE A.O I S CONFIRMED. AGGRIEVED AGAINST THE ACTION OF THE CIT(A), THE ASS ESSEE CAME IN SECOND APPEAL BEFORE THE TRIBUNAL. 4. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSES SEE FAIRLY STATED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST TH E REVENUE BY THE TRIBUNALS ITA NO.6634/MUM/2014 SHRI NARENDRA PAL GUPTA 3 DECISION IN THE ASSESSEES OWN CASE FOR THE IMMEDIA TELY PRECEDING YEAR I.E. A.Y. 2010 -11 IN ITA NO. 3269/MUM/2013 DATED 03.02.2016, WHEREIN THE TRIBUNAL HAS TREATED THE INCOME AS INCOME FROM HOUSE PROPERTY BY OBSERVING AS UNDER: 6. HAVING HEARD THE RIVAL CONTENTIONS, WE ARE OF T HE VIEW THAT THERE IS MERIT IN THE CONTENTIONS OF THE ASSESSEE. IT IS A W ELL SETTLED PROPOSITION OF LAW THAT SUBSTANCE WILL PREVAIL OVER THE FORM. WE H AVE NOTICED THAT THE ASSESSEE HAS ENTERED INTO TWO SEPARATE AGREEMENTS W HILE LEASING OUT THE PREMISES, VIZ., ONE FOR LEASING OUT THE PREMISES AN D ANOTHER ONE FOR LEASING OUT FURNITURE AND FIXTURES. THE LEASE AGREE MENT ENTERED FOR LEASING OUT THE FURNITURE AND FIXTURES CONTAINS A L IST OF ITEMS COVERED BY IT. A PERUSAL OF THE SAID LIST WOULD SHOW THAT THEY ARE AMENITIES ATTACHED WITH THE BUILDING ONLY. FOR THE SAKE OF CONVENIENCE , WE EXTRACT BELOW THE LIST OF ITEMS WHICH HAVE BEEN NAMED AS FURNITURE A ND FIXTURES: I. TWO LOCKABLE SINGLE WARDROBES IN EVERY ROOM; II. MODULAR KITCHEN IN KITCHEN; III. WATER PURIFIER (WITH 24 MONTHS WARRANTY); IV. SLIDING COVERING NICHE AREAS IN EACH BEDROOM; V. INTERCOM SYSTEM; VI. INSTALLATION OF SAFETY GRILLS ON ALL WINDOWS IN THE SAID BUILDING; VII. PROVISION OF ONE-LITER HOT WATER INSTANT GEYSER IN BATHROOMS (WITH 24 MONTHS WARRANTY); VIII.TUBE LIGHTS AND FANS; IX. PLASTER OF PARIS WORK DONE IN THE FLATS; X. STILT CAR PARKING SPACES : 9 (NINE )NOS.; XI. OPEN CAR PARKING SPACES: 60 (SIXTY) NOS. XII. 24 HRS SECURITY GUARDS PRESENCE AT THE COMPOUN DS MAIN GATE, AT THE GROUND FLOOR LOBBY ENTRANCE THE BUILDING AND IN THE CAR PARKING AREAS. THERE WOULD BE 3 GUARDS OF M/S TRIGLTD WORKING 8 HOURS SHIFT EACH AT THE ENTRANCE OF LOBBY OF THE BUILDING. A CAREFUL PERUSAL OF THE DETAILS GIVEN ABOVE WOULD SHOW THAT THEY ARE IN THE NATURE OF AMENITIES ONLY AND HENCE, IN OUR VIEW THE DECISION RENDERED BY THE HONBLE HYDERABAD BENCH OF THE TRIB UNAL IN THE CASE OF G RAGHURAM (SUPRA) SHALL SQUARELY APPLY TO THE FACT S OF THE PRESENT CASE. IN ADDITION TO THE ABOVE, WE NOTICE THAT THE CO-ORD INATE BENCHES OF THE ITA NO.6634/MUM/2014 SHRI NARENDRA PAL GUPTA 4 TRIBUNAL HAS ALSO TAKEN IDENTICAL VIEWS IN THE CASE OF UNIQUE CONSTRUCTION AND DEVELOPERS (SUPRA) AND ALSO IN THE CASE OF MRS. MANJU GUPTA (SUPRA). ACCORDINGLY, WE ARE OF THE VIEW THAT THE LEASE RENT RECEIVED BY THE ASSESSEE FOR THE BUILDING AS WELL AS FURNITURE AND FIXTURES, WHICH ARE IN THE FORM OF AMENITIES ONLY, SHOULD BE ASSESSED AS I NCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 7. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD. CIT( A) AND DIRECT THE AO TO ASSESS THE ENTIRE LEASE RENTAL INCOME RECEIVE D UNDER BOTH THE AGREEMENTS AS INCOME UNDER THE HEAD INCOME FROM HO USE PROPERTY. RESPECTFULLY FOLLOWING THE TRIBUNAL DECISION IN THE ASSESSEES OWN CASE FOR THE IMMEDIATELY PRECEDING YEAR, WE ALLOW THE CASE OF TH E ASSESSEE. 5. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 8 TH JUNE 2016. SD/- SD/- (RAJESH KUMAR) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED : 8 TH JUNE, 2016. SA COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE C I T(A), MUMBAI. 4. THE C I T 5. THE DR, B BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI