MAHALAXMI ENGINEERING CO. P. LTD, MUMBAI V. ACIT 6(3), MUMBAI

ITA 7029/MUM/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9876 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 17-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T A KHAN
• Section: 143(3)

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI G. S. PANNU , AM & SH. SANDEEP GOSAIN, JM ./ I.T.A. NO . 7029/MUM/2014 ( / ASSESSMENT YEAR: 2010 - 11 ) MAHALAXMI ENGINEERING CO. PVT. LTD. MAHALAXMI ENGG . ESTATE L. J. CROSS ROAD, MAHIM(W), MUMBAI - 4000 16 / VS. ACIT 6(3) R. NO. 522, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI - 400020 ./ ./ PAN NO. A A ACM3986C ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : MS. RUTUJA N. PAWAR / RESPONDENTBY : SHRI T. A. KHAN, DR / DATE OF HEARING : 06/03 /201 8 / DATE OF PRONOUNCEMENT : 07/03/2018 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE P RESENT APPE AL FILED BY THE REVENUE IS AGAINST THE ORDER OF LD. CIT (APPEAL) 12, MUMBAI DATED 25.08.14 F OR AY 2010 - 11 ON THE GROUNDS MENTIONED HEREIN BELOW: - 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 2 I.T.A. NO. 7029 /MUM/201 4 MAHALAXMI ENGINEERING CO. PVT. LTD. (THE CIT(A)) HAS ERRED IN CONCLUDING THAT THE INCOME FROM 'LETTING OUT OF PROPERTY' BY WHATEVER NAME CALLED IS ASSESSABLE IN THE HANDS OF APPELLANT UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) HAS, WITHOUT BRINGING ANY MATERIAL ON RECORD TO SHOW, UPHELD THAT THE MAINTENANCE CHARGES, A CONTRACTUAL OBLIGATION, TO BE ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND NOT AS INCOME FROM OTHER SOURCES. 3. UNDER THE FACTS AND CIRC UMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONCLUDING THAT THE MAINTENANCE CHARGES INCOME HAS BEEN SHOWN UNDER THE HEAD INCOME FROM OTHER SOURCES MERELY TO REDUCE THE TAX LIABILITY BY CLAIMING VARIOUS EXPENSES UNDER SECTION 57(III) A ND IT'S A COLOURABLE DEVICE BY ARTIFICIALLY BIFURCATING INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES. 4. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN RELYING ON VARIOUS JUDICIAL PRONOUNCEMENTS, DISTI NGUISHABLE ON FACTS, TO CONCLUDE THAT THE ASSESSABILITY OF INCOME DERIVED FROM LETTING OUT OF THE PROPERTY UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY'. 3 I.T.A. NO. 7029 /MUM/201 4 MAHALAXMI ENGINEERING CO. PVT. LTD. 5. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN RELYING ON VARIOUS JUDICIAL PRONOUNCEMENTS, DISTINGUISHABLE ON FACTS, TO CONCLUDE THAT THE SERVICE CHARGES / MAINTENANCE CHARGES ETC., ARE CHARGEABLE TO TAX UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' 6. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE L EARNED CIT(A) HAS ERRED IN DISMISSING THE GROUNDS OF INTEREST UNDER SECTION 234C AND 234D AND INITIATION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 7. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR MODIFY ANY OF THE ABOVE GROUNDS OF APPEAL. 2. THE B RIEF FACTS OF THE CASE ARE THAT T HE ASSESSEE IS THE OWNER OF A BUILDING AND IS RECEIVING RENT FROM PREMISES AND OTHER CHARGES IN THE FORM OF MAINTENANCE CHARGES AND ANTENNA CHARGES FROM VARIOUS OCCUPANTS IN THE BUILDING. THE ASSESSEE FILED ITS RETURN OF INCOME ELECTRONICALLY ON 14.09.10 DECLARING TOTAL INCOME OF RS. 78,47,260/ - AND THE SAME WAS DULY PROCESSED U/S 143(1) OF THE I.T. ACT ON 27.05.11. LATER ON THE CASE WAS SELECTED FOR SCRUTINY AND AFTER SERVING STATUTORY NOTICES AND SEEKING REPLY, ORDER OF ASSESSM ENT U/S 143(3) WAS PASSED BY AO THEREBY 4 I.T.A. NO. 7029 /MUM/201 4 MAHALAXMI ENGINEERING CO. PVT. LTD. MAKING THE INCOME FROM LETTING OUT OF PROPERTY BY WHATEVER NAME CALLED IS ASSESSABLE IN THE HAND OF THE ASSESSEE UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND THUS REJECTED THE CLAIM OF VARIOUS EXPENSES. AGGRIEV ED BY THE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE CASE OF BOTH THE PARTIES DISMISSED THE APPEAL OF THE ASSESSEE . NOW BEFORE US, THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BY RAISING THE ABOVE GROUN DS. GROUND NO. 1 TO 6 3. THESE GROUND S RAISED BY THE ASSESSEE RELATES TO CHA LLENGING THE ORDER OF LD. CIT(A) IN CONCLUDING THAT THE INCOME FROM 'LETTING OUT OF PROPERTY' BY WHATEVER NAME CALLED IS ASSESSABLE IN THE HANDS OF APPELLANT UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY , THEREFORE WE THOUGHT IT FIT TO DISPOSE OF THESE GROUNDS BY THIS COMMON ORDER. 4. AT THE VERY OUTSET, LD. AR APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED BEFORE US THAT THE PRESENT CASE IS FULLY COVERED 5 I.T.A. NO. 7029 /MUM/201 4 MAHALAXMI ENGINEERING CO. PVT. LTD. BY THE ORDER OF HON BLE ITAT IN ITA NO. 5670/MUM/14 FOR AY 2009 - 10 IN ASSESSEES OWN CASE WHEREIN THE IDENTICAL GROUNDS RAISED IN THE PRESENT APPEAL HAVE ALREADY BEEN DECIDED ON MERITS. LD. AR FURTHER SUBMITTED THAT THE HONBLE ITAT HAD SET ASIDE THE ORDER PASSED BY LD CIT(A) AND RESTORE ALL THE ISSUES TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINING THEM AFRESH AND T HE ASSESSEE IS ALSO DIRECTED TO FURNISH ALL THE DETAILS BEFORE THE AO TO SUPPORT ITS CONTENTIONS. 5. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS PASSED B Y REVENUE AUTHORITIES. 6. WE HAVE HEARD BOTH THE PARTIES AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. WE FIND THAT THE IDENTICAL GROUND HAS ALREADY BEEN DECIDED BY THE COORDINATE BENCH OF HONBLE ITAT IN ITA NO. 5670/MUM/2014 FOR AY 2009 - 10 IN ASSESSEES OWN CASE. THE OPERATIVE PORTION OF THE ORDER OF HONBLE ITAT CONTAINED IN PARA NO. 2 TO 6 , WHICH IS REPRODUCED BELOW: - 6 I.T.A. NO. 7029 /MUM/201 4 MAHALAXMI ENGINEERING CO. PVT. LTD. 2. THE ASSESSEE HAS RENTED OUT A BUILDING. IT DECLARED RENTAL INCOME O F RS.44.29 LAKHS, RECEIPTS PERTAINING TO MAINTENANCE CHARGES OF RS.1,10,04,000/ - AND RECEIPTS RELATING TO ANTENNA CHARGES OF RS.7,82,852/ - . THE ASSESSEE DECLARED THE RENTAL RECEIPTS UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND DECLARED OTHER TWO RECEIPTS AS INCOME FROM OTHER SOURCES. THE ASSESSEE ALSO CLAIMED VARIOUS EXPENSES AGAINST THE INCOME DECLARED UNDER THE HEAD INCOME FROM OTHER SOURCES. THE AO TOOK THE VIEW THAT THE ASSESSEE HAS SPLIT THE RENTAL INCOME INTO TWO CATEGORIES AND ACCORDINGLY ASSESSED T HE RECEIPTS PERTAINING TO MAINTENANCE CHARGES ALSO UNDER THE HEAD INCOME FROM HOUSE PROPERTY. IN THIS PROCESS, HE ALSO DISALLOWED CLAIM OF VARIOUS EXPENSES. THE LD CIT(A) ALSO CONFIRMED THE SAME AND HENCE THE ASSESSEE HAS FILED THIS APPEAL. 3. THE LD A.R SUBMITTED THAT AN IDENTICAL VIEW WAS TAKEN BY THE AO IN ASSESSMENT YEARS 2006 - 07 AND 2007 - 08, BUT THE SAME WAS REVERSED BY THE LD CIT(A). THE DECISION OF LD CIT(A) WAS CHALLENGED BEFORE THE TRIBUNAL BY THE REVENUE AND THE TRIBUNAL, VIDE ITS ORDER DATED 18 - 12 - 2015 PASSED IN ITA NO.5930/M/2010 & OTHERS, HAS UPHELD THE VIEW TAKEN BY LD CIT(A). ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE TRIBUNAL HAS CONFIRMED THE ORDER PASSED BY LD CIT(A) ONLY ON THE REASONING THAT THE FINDINGS GIVEN BY 7 I.T.A. NO. 7029 /MUM/201 4 MAHALAXMI ENGINEERING CO. PVT. LTD. LD CIT(A) IN THOSE Y EARS WERE NOT CONTROVERTED BY LD D.R. HE SUBMITTED THAT THE LD CIT(A) HAS POINTED OUT IN THIS YEAR THAT THE ASSESSEE HAS FAILED TO FURNISH SEPARATE AGREEMENTS AND DID NOT PROVIDE THE DETAILS OF SERVICES PROVIDED. 4. IN THE REJOINDER, THE LD A.R SUBMITTED T HAT THE MATTERS MAY BE RESTORED TO THE FILE OF THE AO FOR EXAMINING THEM AFRESH IN THE LIGHT OF DECISION RENDERED BY THE TRIBUNAL IN THE EARLIER YEARS, REFERRED SUPRA. THE LD D.R ALSO AGREED TO THE SAME. 5. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) AND RESTORE ALL THE ISSUES TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINING THEM AFRESH. THE ASSESSEE IS ALSO DIRECTED TO FURNISH ALL THE DETAILS BEFORE THE AO TO SUPPORT ITS CONTENTIONS. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED A S ALLOWED FOR STATISTICAL PURPOSES. AFTER HAVING GONE THROUGH THE FACTS OF THE PRESENT CASE AS WELL AS CONSIDERING THE ORDERS PASSED BY REVENUE AUTHORITIES AND HONBLE ITAT AS MENTIONED ABOVE IN ASSESSEES OWN CASE , WE FIND THAT THE IDENTICAL ISSUE S HAVE ALREADY BEEN DECIDED BY THE 8 I.T.A. NO. 7029 /MUM/201 4 MAHALAXMI ENGINEERING CO. PVT. LTD. HONBLE ITAT IN ASSESSEES OWN CASE FOR AY 2009 - 10 IN ITA NO. 5670/MUM/14. T HEREFORE , RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF HONBLE ITAT AND IN ORDER TO MAINTAIN JUDICIAL CONSISTENCY , WE APPLY THE SAME F INDINGS IN THE PRESENT CASE WHICH ARE APPLICABLE MUTATIS MUTANDIS IN THE PRESENT CASE AND IN VIEW OF THE ABOVE FINDINGS, WE RESTORE ALL THE ISSUES TO THE FILE OF THE AO FOR EXAMINING AFRESH AND THEREAFTER PASS AFRESH ORDER OF ASSESSMENT. RESULTANTLY, THESE GROUND RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. GROUND NO. 7 . 7 . THIS GROUND IS GENERAL IN NATURE, THUS REQUIRES NO SPECIFIC ADJUDICATION. 8 . IN THE NET RESU LT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH MARCH . 2018 SD/ - SD/ - ( G. S. PANNU ) (SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 07 . 03 .201 8 SR.PS . DHANANJAY 9 I.T.A. NO. 7029 /MUM/201 4 MAHALAXMI ENGINEERING CO. PVT. LTD. / 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 I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI