Dy. Commissioner of Income Tax, Circle-3, Pune V. M/s. B.B. Associates, Pune

ITA 957/PUN/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79873 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 02-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Business income; Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 957 / P N/ 20 1 3 ASSESSMENT YEAR : 200 8 - 09 DY. COMMISSIONER OF INCOME TAX, CIR CLE 3, PUNE VS. M/S. B.B. ASSOCIATES, 242/1, NEELGIRI, BHANDARKAR INSTITUTE ROAD, PUNE - 411004 (APPELLANT) (RESPONDENT) PAN NO. AACFB5231C APPELLANT BY: SHRI S.P. WALIMBE RESPONDENT BY: SHRI C.H. NANIWADEKAR DATE OF HEARING : 01 - 0 5 - 2014 DA TE OF PRONOUNCEMENT : 29 - 05 - 2014 ORDER PER R.S . PADVEKAR , JM : - THIS APPEAL IS FILED BY THE REVENUE CHALLENGING THE IMPUGNED O RDER OF THE LD. CIT(A) - II, PUNE DATED 14 - 12 - 2012 FOR THE A.Y. 200 8 - 09. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS IN THE APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN HOLDING THAT THE INCOME EARNED BY LETTING OUT THE COMMERCIAL BUILDING AS INCOME FROM HOUSE PROPERTY. 2. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSEE HAD ITSELF TREATED THE BUILDING AS A BUSINESS ASSET BY SHOWING IT AS PART OF STOCK - IN - TRADE WHICH INCIDENTALLY HAVE BEEN CLUBBED WITH OTHER BUILDING ON WHICH THE ASSESSEE HAS EARNED A BUSINESS INCOME. 3. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN NOT APPRECIATING THE FACT THAT THE SERVICES PROVIDED BY THE ASSESSEE TO ITS TENANTS ARE SPECIFIC AND SPECIALIZED SERVICES WHICH ARE NOT PROVIDED BY A LANDLORD TO HIS TENANTS IN ORDINARILY COURSE OF LETTING OUT OF PROPERTY. 2 ITA NO. 957/PN/2013, B.B. ASSOCIATES, PUNE 2. THE FA CTS WHICH ARE REVEALED FROM THE RECORD AS UNDER. THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOPERS. THE RETURN FOR THE YEAR UNDER CONSIDERATION WAS FILED ON 31 - 07 - 2008 DECLARING TOTAL INCOME OF RS.1,03,31,840 / - WHICH WAS ASSESSED B Y THE ASSESSING OFFICER AT RS. 1,41,36,990 / - , AFTER ASSESSING THE RENTAL INCOME AS BUSINESS INCOME INSTEAD OF INCOME FROM HOUSE PROPERTY DECLARED BY THE ASSESSEE. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERVED THAT IN THE A SSESSEE 'S CASE D URING THE SCRUTINY PROCEEDINGS FOR A.Y. 2003 - 04, THE ERSTWHILE ASSESSING OFFICER IN THE ORDER PASSED U/S . 143(3) HAD TREATED THE INCOME FROM HOUSE PROPERTY OFFERED BY THE ASSESSEE, AS BUSINESS INCOME AGAINST WHICH THE ASSESSEE HAD PREFERRED APPEAL AND THE CIT(A) - II, PUNE VIDE ORDER DATED 03 - 10 - 2006 ALLOWED THE APPEAL OF THE ASSESSEE . AGAINST THIS ORDER THE DEPARTMENT HAD FILED APPEAL BEFORE THE HON'BLE ITAT AND THE ITAT VIDE ORDER DATED 03 - 10 - 2008 DISMISSED THE DEPARTMENT'S APPEAL. THEREAFTER, THE DEPARTME NT HAS PREFERRED APPEAL BEFORE THE HON'BLE BOMBAY HIGH COURT. THE ASSESSING OFFICER HAS NOTED IN THE ASSESSMENT ORDER THAT THE DISCUSSION GIVEN IN THE ASSESSMENT ORDER FOR A.Y. 2003 - 04 IN THE ASSESSEE'S CASE MAY BE TREATED AS PART AND PARCEL OF THIS ORDER AND THE INCOME OFFERED BY THE A SSESSEE UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY WAS ASSESSED AS BUSINESS INCOME. FOR THE ALLOWANCE OF DEPRECIATION THE ASSESSING OFFICER GOING BY THE DECISION TAKEN BY THE CIT(A) FOR A.Y. 2003 - 04 IN A SSESSEE 'S CASE, CONTI NUING WITH THE SAME STAND ALLOWED 90% OF THE DEPRECIATION AFTER CONSIDERING 10% OF WDV OF THE BUILDING. 3. ACCORDINGLY, THE ASSESSING OFFICER TREATED THE INCOME DECLARED BY THE ASSESSEE FROM THE BUSINESS AS INCOME UNDER THE HEAD INCOME FROM HOUSE PROPE RTY. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND LD. CIT(A) FOLLOWING THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE A.Y. 2005 - 06 ALLOWED THE ASSESSEES APPEAL. THE LD. 3 ITA NO. 957/PN/2013, B.B. ASSOCIATES, PUNE COUNSEL ALSO FILED THE COPY OF THE TRIBUNAL DECISION WHICH IS PLACED ON RECORD FOR THE A.Y. 2005 - 06. WE HAVE ALSO HEARD THE LD. DR. 4. WE FIND THAT IN THE ASSESSEES OWN CASE FOR THE A.Y. 2005 - 06 , THE TRIBUNAL HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND ORDER OF THE TRIBUNAL IS REPRODUCED IN THE O RDER OF THE LD. CIT(A). WE, THEREFORE, FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). ACCORDINGLY, SAME IS CONFIRM ED . 5. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 - 05 - 2014 . S D/ - SD/ - ( R.K. PANDA ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 29 TH MAY, 20 1 4 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - II, PUNE 4 THE CIT - II, PUNE 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE