ITO 5(3)(1), MUMBAI V. ROXY THEATRES P.LTD, MUMBAI

ITA 7046/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2944 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 19-11-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH , MUMBAI BEFORE SRI MAHAVIR SINGH, J M AND SRI RAJESH KUMAR , AM ITA NO . 5201 /MUM/201 2 (A.Y.:2009 - 10) M/S. ROXY THEATRE, 5 TH FLOOR, THE JEWEL, MAMA PARMANAND MARG, OPERA HOUSE, MUMBAI 400 004 PAN:AADCR0705P VS. THE INCOME TAX OFFICER, WARD 5(3)(1), ROOM NO.525, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI 400 020 APPELLANT .. RESPONDENT ITA NO.6271/MUM/2013 (A.Y.:2010 - 11) & ITA NO.7046/MUM/2014 (A.Y.:2011 - 12 ) THE INCOME TAX OFFICER, WARD 5(3)(1), ROOM NO.525, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI 400 020 VS. M/S. ROXY THEATRE, 5 TH FLOOR, THE JEWEL, MAMA PARMANAND MARG, OPERA HOUSE, MUMBAI 400 004 PAN:AADCR0705P APPELLANT .. RESPONDENT ASSESSEE BY .. NONE REVENUE BY .. MS. SURABHI SHARMA, DR DATE OF HEARING .. 14 - 09 - 2016 DATE OF PRONOUNCEMENT .. 14 - 09 - 2016 O R D E R PER MAHAVIR SINGH , JM : OUT OF T HE S E THREE APPEAL S, ONE BY THE ASSESSEE AND TWO BY THE REVENUE , THE ASSESSEES APPEAL IN ITA NO.5201/MUM.2012 FOR AY 2009 - 10 IS ARISING OUT OF ORDER OF CIT ( A) - 9, MUM BAI IN AP PEAL NO. CIT(A) - 9/ITO 5(3)(1)/278/2011 - 12 DATED 15 - 05 - 2012, REVENUES APPEAL IN ITA NO.6271/MUM/2013 FOR ASSESSMENT YEAR 2010 - 11 IS ARISING OUT OF THE ORDER OF CIT (A) - 9,MUMBAI IN APPEAL NO.CIT(A) - 9/ITO 5(3)(1)/207/2012 - 13 DATED 10 - 09 - 2013 AND THE OTHER APPEAL OF THE REVENUE IN ITA NO.7046/MUM/2014 FOR ASSESSMENT YEAR 2011 - 12 IS ARISING OUT OF THE ORDER OF THE CIT(A) - 9, MUMBAI IN APPEAL NO.CIT (A) - 9/ITO - 5(3)(1)/482/2013 - 14 DATED 10 - 09 - 2014 RESPECTIVELY . ASSESSMENT S IN ALL THE ABOVE ASSESSMENT YEARS WERE FRAMED BY THE ITO - 5(3 ) ( 1) MUMBAI U/S 143(3) OF THE ITA NO. 5201 /MUM/20 1 2 ITA NO.6271/MUM/2013 ITA NO.7046/MUM/2014 2 INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) VIDE HIS ORDER S DATED 07 - 12 - 2011, 12 - 11 - 2012 AND 29 - 10 - 2013 RESPECTIVELY. 2. THE ONLY COMMON ISSUE IN THE S E THREE APPEAL S, ONE BY THE ASSESSEE FOR ASSE SSMENT YEAR 2009 - 10 AND THE OTHER TWO BY THE REVENUE FOR ASSESSMENT YEAR 2010 - 11 AND 2011 - 12 RESPECTIVELY, IS AS REGARDS TO THE TREATMENT OF INCOME RECEIVED AS RENTAL FROM HOUSE PROPERTY WHETHER THE SAME IS BUSINESS INCOME OR INCOME FROM HOUSE PROPERTY AND CONSEQUENTIAL CLAIM OF EXPENSES. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE COMPANY WAS IN THE BUSINESS OF EXHIBITION OF FILMS AND FOR THIS PURPOSES LET OUT ITS PREMISES WITH SPECIAL CHAIRS, INSTALLING AIR CONDITION, AUDIO, VIDEO AND OTHER EQUIPMENTS FOR RUNNING A THEATRE FOR EXHIBITION OF FILMS. THE ASSESSEE STOPPED ITS BUSINESS OF EXHIBITING FILMS IN FINANCIAL YEAR 2006 - 07 AND THEREAFTER THE ENTIRE THEATRE PREMISES WAS GIVEN ON RENT TO DIFFERENT PARTIES AS UNDER: - (1) M/S. ARSHITA CINEMA PVT. LTD. E XHIBITION OF CINEMATOGRAPHY FILM FOR PUBLIC VIEWING. RS.55,200 PER WEEK FOR 52 WEEKS. (2) M/S.ARSHITA EXHIBITION PVT. LTD. TO SELL ETABLE ARTICLES MONTHLY LICENSE CHARGES RS.11,000/ - FROM 11/5/08 TO 10/04/2009 (3) M/S. EURONET SERVICES INDIA PVT. LTD. ALLOWING TO INSTALL ATM MACHINES MONTHLY LICENSE FEES RS.23,000/ - FOR THE PERIOD 1/1/07 TO 31/3/10. (4) M/S. MARVIN GEMS PVT. LTD. DIAMOND BUSINESS MONTHLY RENT OF RS.6,000/ - W.E.F. 1/09/08 TO 31/08/09. (5) RELIANCE INFRATEL LTD. (MOBILE TOWER) INS TALLATIION & OPERATIONS OF TELECOMMUNICATION, MOBILE TOWER ETC. YEARLY LEASE CHARGES RS.4,00,000 W. E. F. 10/3/08 (6) VODAFONE ESSAR LT D . (MOBILE TOWER) INSTALLATINO & OPERATIONS OF TELECOMMUNICATION, MOBILE TOWER ETC. YEARLY LICENSE FEES RS.4,00,000 W .E.F. 1/5/2008 TO 30/4/2013 THE ASSESSEE DISCLOSED RECEIPTS FROM THE SAID PROPERTY UNDER THE HEAD EXHIBITION CHARGES. ACCORDING TO THE AO, THE RECEIPTS OF THE ASSESSEE ARE NOTHING BUT RENTAL INCOME AND ACCORDINGLY, HE ASSESSED THE SAME AS INCOME FROM HOU SE PROPERTY IN ALL THE THREE YEARS. THE CIT (A) IN ASSESSMENT YEAR 2010 - 11 AND 2011 - 12 CHANGED THE HEAD OF INCOME FROM INCOME FROM HOUSE PROPERTY TO BUSINESS INCOME, BUT IN THE ASSESSMENT YEAR 2009 - 10, HE CONFIRMED THE ACTION OF THE AO IN ASSESSING THE ITA NO. 5201 /MUM/20 1 2 ITA NO.6271/MUM/2013 ITA NO.7046/MUM/2014 3 ABO VE RECEIPTS AS INCOME FROM HOUSE PROPERTY. AGGRIEVED, BOTH THE ASSESSEE AS WELL AS THE REVENUE CAME IN APPEAL BEFORE THE TRIBUNAL. 4. DESPITE NOTICE TO THE ASSESSEE HE HAS NOT REPRESENTED ON THE APPOINTED DATE. AFTER HEARING THE LEARNED CIT DR AND GOIN G THROUGH THE FACTS OF THE CASE, WE FIND THAT RECENTLY THE HONBLE SUPREME COURT IN THE CAS E OF CHENNAI PROPERTIES AND INVESTMENTS LTD. VS CIT (2015) 373 ITR 673 (SC) HAS HELD THAT IF AN ASSESSEE IS HAVING HOUSE PROPERTY AND BY WAY OF BUSINESS HE IS GIVING THE PROPERTY ON RENT AND IF RECEIVING RENT FROM THE SAID PROPERTY , AS HIS BUSINESS INCOME, THE SAID INCOME EVEN IF, IN THE NATURE OF RENT, SHOULD BE TREATED AS BUSINESS INCOME BECAUSE THE ASSESSEE IS HAVING A BUSINESS OF RENTING HOUSE PROPERTY AND THE REN T WHICH HE RECEIVES IS IN THE NATURE OF HIS BUSINESS INCOME. WE FIND THAT , IN ALL THESE THREE APPEALS , THE PRINCIPLE ENUNCIATED BY THE HONBLE SUPREME COURT IN THE CASE OF CHENNAI PROPERTIES (SUPRA) HAS NOT BEEN EXAMINED. ACCORDINGLY, AFTER HEARING THE LEA RNED CIT DR WE ARE OF THE VIEW THAT LET THIS ISSUE BE EXAMINED AFRESH BY THE AO IN TERMS OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CHENNAI PROPERTIES (SUPRA). THE ORDERS OF THE LOWER AUTHORITIES ARE ACCORDINGLY SET ASIDE AND THE APPEAL OF THE ASSESSEE AND THAT OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 5 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AS WELL AS THE APPEALS OF THE REVENUE, ALL ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COU RT ON 14 - 09 - 2016 . SD/ - (RAJESH KUMAR ) ACCONTANT MEMBER MUMBAI, DATED: 14 - 09 - 2016 LAKSHMIKANTA DEKA/SR.PS SD/ - ( MAHAVIR SINGH ) JUDICI AL MEMBER ITA NO. 5201 /MUM/20 1 2 ITA NO.6271/MUM/2013 ITA NO.7046/MUM/2014 4 BY ORDER, ASSISTANT REGISTRAR ITAT, MUMBAI SR.NO. PARTICULARS DATE INITIALS MEMBER CONCERNED 1 DICTATION GIVEN ON 14/09/16 LK DEKA JM 2 DRAFT PLACED BEFORE AUTHOR 16/09/16 3 DRAFT PROPOSED/PLACED BEFORE THE SECOND MEMBER 4 DRAFT DISCUSSE D/APPROVED BY SECOND MEMBER 5 APPROVED DRAFT COMES TO THE SR.PS 6 KEPT FOR PRONOUNCEMENT ON 7 FILE SENT TO THE BENCH CLERK 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT (A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//