M/s Premier Electrical Industries, Chandigarh V. JCIT, Chandigarh

ITA 96/CHANDI/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9074 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 21-03-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 28-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income; Depreciation; Capital expenditure
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER ITA NO. 96/CHD/2015 ASSESSMENT YEAR: 2011-12 M/S PREMIER ELECTRICAL INDUSTRIES, VS THE JCIT, PLOT NO. 147-148, PHASE-1, RANGE-II, INDUSTRIAL AREA, CHANDIGARH. CHANDIGARH. PAN: AABFP0329C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINEET KRISHAN RESPONDENT BY : SHRI SUSHIL KUMAR DATE OF HEARING : 15.09.2016 DATE OF PRONOUNCEMENT : 03.10.2016 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-I CHANDIGARH DATED 01.12.2014 FOR ASSESSMENT YEAR 2011-12. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. 2 3. THE ASSESSEE HAS RAISED SEVERAL GROUNDS OF APPEA L ON WHICH EFFECTIVELY THREE ISSUES ARISE FOR CONSIDE RATION. THE SAME ARE DECIDED AS UNDER. ISSUE NO. 1 4. ON GROUND NO. 6, ASSESSEE CHALLENGED THE DISALLOWANCE OF CLAIM OF LOSS OF RS. 81,538/-. THE ASSESSEE HAD SHOWN LOSS OF RS. 81,538/- UNDER THE H EAD 'BUSINESS OR PROFESSION', BUT IT HAD SHOWN ONLY REN TAL INCOME IN THE INCOME AND EXPENDITURE ACCOUNT, MEANI NG THEREBY NO BUSINESS ACTIVITIES WERE CARRIED OUT BY THE ASSESSEE DURING THE YEAR. THE ASSESSING OFFICER QUESTIONED THE ASSESSEE ON THIS ISSUE AND ASSESSEE HAD SUBMITTED THAT EVEN IF IT HAD NOT EARNED ANY INCOME , EXPENSES CANNOT BE DISALLOWED. THE ASSESSING OFFIC ER NOTICED THAT BUSINESS OF THE ASSESSEE WAS MENTIONED AS RENTING OF PROPERTY AND SO, HE CONCLUDED THAT ASSES SEE WAS NOT CARRYING OUT ANY BUSINESS ACTIVITY AND DISALLOWED LOSS SO CLAIMED UNDER THE HEAD 'INCOME F ROM BUSINESS & PROFESSION'. THE ASSESSEE DID NOT MAKE ANY SUBMISSIONS ON THIS ISSUE BEFORE LD. CIT(APPEALS) THEREFORE, LD. CIT(APPEALS) CONFIRMED THE DISALLOWA NCE AND DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE . 5. AFTER HEARING RIVAL CONTENTIONS, WE ARE OF THE V IEW NO INTERFERENCE IS CALLED FOR IN THE MATTER. THE L D. COUNSEL FOR THE ASSESSEE DID NOT RAISE ANY SPECIFIC SUBMISSIONS ON THIS ISSUE AND EVEN HAVE NOT POINTED OUT 3 ANY MATERIAL FROM THE PAPER BOOK AS TO HOW THE ASSE SSEE WOULD BE ENTITLED FOR CLAIM OF DEDUCTION ON ACCOUNT OF LOSS SO CLAIMED. IN THE ABSENCE OF ANY SPECIFIC SUBMISSION AND PRODUCTION OF SUFFICIENT MATERIAL, W E ARE NOT INCLINED TO INTERFERE WITH THE ORDERS OF AUTHOR ITIES BELOW. THIS ISSUE IS, THEREFORE, DECIDED AGAINST T HE ASSESSEE. GROUND NO. 6 OF APPEAL OF THE ASSESSEE S TANDS DISMISSED. ISSUE NO. 2 6. THE ASSESSEE ON GROUND NO. 7 CHALLENGED THE ORDE R OF LD. CIT(APPEALS) IN DISALLOWING THE CLAIM OF ASS ESSEE UNDER SECTION 24(A) OF THE INCOME TAX ACT AND THERE BY CONFIRMING THE DISALLOWANCE OF RS. 57,10,796/-. ON GROUND NOS. 2, 3 AND 4, THE ASSESSEE ALSO CHALLENGE D THE ORDER OF LD. CIT(APPEALS) IN NOT FOLLOWING PRINCIPL E OF CONSISTENCY AND IN NOT FOLLOWING DECISION OF EARLIE R YEAR IN ASSESSMENT YEAR 2009-10 AND THAT NO NEW SOURCE COULD BE ADDED FOR MAKING THE ADDITION. 7. THE ASSESSEE CHALLENGED THE ORDER OF THE ASSESSI NG OFFICER BEFORE LD. CIT(APPEALS) IN DISALLOWING DEDU CTION UNDER SECTION 24(A) OF THE ACT IN A SUM OF RS. 57,10,796/-. BRIEF FACTS OF THE ISSUE ARE THAT ASS ESSEE HAD LEASED OUT THE LAND AND BUILDING SITUATED AT PL OT NO. 147-148, INDUSTRIAL AREA, PHASE-I CHANDIGARH TO M/S SAROVAR HOTELS PVT. LTD., MUMBAI. THIS COMPANY HAD DEMOLISHED THE WHOLE OF THE OLD STRUCTURE AND 4 CONSTRUCTED A HOTEL BUILDING ON THIS LAND. THE ASS ESSEE HAD DECLARED THE AMOUNT RECEIVED FROM M/S SAROVAR HOTELS PVT. LTD. UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND HAD CLAIMED DEDUCTION OF 30% OF THE AMOUNT I.E. RS. 57,10,796/- UNDER SECTION 24(A) OF THE ACT. THE ASSESSING OFFICER QUESTIONED THE ASSESSEE ABOUT ALLOWABILITY OF DEDUCTION UNDER SECTION 24(A) OF THE ACT AND THE ASSESSEE SUBMITTED THAT THE BUILDIN G WAS GIVEN ON LEASE SO IT WAS ELIGIBLE FOR DEDUCTION UNDER SECTION 24(A) OF THE ACT. THE ASSESSING OFFICER CA LLED FOR INFORMATION UNDER SECTION 133(6) OF THE ACT FROM M/ S SAROVAR HOTELS PVT. LTD. AND NOTICED FROM THE INFORMATION RECEIVED THAT NO STRUCTURE OF OLD BUILD ING EXISTED ON THE SAID PLOT AND THERE EXIST TOTALLY NE W CONSTRUCTION WHICH IS A HOTEL BUILDING AND M/S SARO VAR HOTELS PVT. LTD. WAS CLAIMING DEDUCTION ON THE SAID BUILDING. THE ASSESSING OFFICER ANALYZED LEASE DEE D AND INFERRED THAT RIGHT TO CONSTRUCT ON THE PLOT WAS WI TH M/S SAROVAR HOTELS PVT. LTD. AND SO THE ASSESSEE WAS NO T ELIGIBLE FOR DEDUCTION UNDER SECTION 24(A) OF THE A CT, SINCE IT WAS ALLOWED TO THE OWNER OF THE BUILDING, SO THAT HE COULD CARRY OUT REQUISITE REPAIRS IN THE BU ILDING. 8. THE ASSESSEE CHALLENGED THE ADDITION BEFORE L D. CIT(APPEALS) AND SUMMARIZED WRITTEN SUBMISSION OF T HE 5 ASSESSEE READS AS UNDER : 3.2 DURING THE COURSE OF APPELLATE PROCEEDINGS, TH E LD. COUNSEL FOR THE APPELLANT HAS FILED A WRITTEN SUBMISSION, WHICH IS SUMMARIZED BELOW. (I) THE LAND AND BUILDING WERE GIVEN TO THE LESSEE FOR RUNNING A HOTEL AND IF MODIFICATIONS OR ALTERATIONS OR ADDITI ONS OR CHANGES WERE MADE BY THE LESSEE AT ITS OWN COST, TH E APPELLANT WAS NOT ENTITLED TO ANY BENEFITS. IT HAS ALSO BEEN SUBMITTED THAT NO SUCH DISALLOWANCE WAS MADE IN THE EARLIER YEARS. (II) THE CONSTRUCTED PORTION WAS REFLECTED IN THE B ALANCE SHEET AS ON 31.01.2007 AT RS. 1.70 CRORES AND PROPERTY TA X HAD BEEN PAID AND SO THE ASSESSING OFFICER HAS WRONGLY ASSUM ED THAT ONLY LAND HAS BEEN LEASED OUT. (III) THERE IS NO BAR ON THE CLAIM OF DEPRECIA TION BY THE LESSEE IN RESPECT OF THE BUILDING CONSTRUCTED AFRES H AND THE APPELLANT FIRM IS NOT CLAIMING ANY DEPRECIATION ON ITS OWN VALUE OF BUILDING. (IV) THE CONSTRUCTION WAS TO REVERT TO THE LES SOR ON THE EXPIRY OF LEASE. (V) THE DEDUCTION U/S 24(A) IS STATUTORY AND DOES NOT DEPEND ON THE EXPENSES ACTUALLY INCURRED. MOREOV ER, THE PROPERTY RENTED OUT WAS NOT LAND ALONE, BUT IT WAS APPURTENANT TO THE THEN EXISTING STRUCTURE. (VI) THE CONTRACT DOES NOT TRANSFER THE OWNER SHIP OF THE BUILDING TO THE LESSEE DURING THE LEASE PERIOD WHER E THE OWNERSHIP AGAIN PASSES TO THE LESSOR ON TERMINATION OF LEASE [ANDAVAR CALENDERING MILLS (210 ITR 815)]. (VII) THERE IS NO CONTRADICTION IN THE LESSEE BEING THE BENEFICIAL OWNER DURING THE PENDENCY OF THE PERIOD OF LEASE. RELIANCE HAS BEEN PLACED ON THE JUDGEMENT OF HON'BL E PUNJAB & HARYANA HIGH COURT IN THE CASE OF HARYANA TOURISM CORPORATION LTD (327 ITR 26). 6 9. THE LD. CIT(APPEALS) AFTER CONSIDERING FACTS OF THE CASE IN THE LIGHT OF SUBMISSIONS OF THE ASSESSEE, N OTED THAT ASSESSEE HAD GIVEN ITS LAND AND BUILDING ON LE ASE TO M/S SAROVAR HOTELS PVT. LTD. WHO HAVE DEMOLISHED TH E OLD STRUCTURE AND CONSTRUCTED A HOTEL ON WHICH IT I S CLAIMING DEPRECIATION. THE LD. CIT(APPEALS) ALSO N OTED THAT THE CONSTRUCTION DONE BY M/S SAROVAR HOTELS PV T. LTD. DID NOT BELONG TO THE ASSESSEE, THEREFORE, WHA TEVER AMOUNT IS RECEIVED BY THE ASSESSEE IS FOR LEASING O UT OF THE LAND, SO THE RENT IS TO BE ASSESSED AS 'INCOME FROM OTHER SOURCES' AND NOT 'INCOME FROM HOUSE PROPERTY . THE LD. CIT(APPEALS) ALSO NOTED THAT PRINCIPLE OF R ES- JUDICATA DOES NOT APPLY TO INCOME TAX PROCEEDINGS A ND ACCORDINGLY, DISMISSED THE APPEAL OF THE ASSESSEE. 10. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES. THE LD. COUNSEL FOR THE ASSESSEE REITERAT ED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND SUBMITTED THAT INFORMATION UNDER SECTION 133(6) OF THE ACT ALLEGEDLY RECEIVED FROM THE TENANT WAS NEVER SUPPLIED TO THE ASSESSEE AND NEVER CONFRONTED. THEREFORE, THE SAME CANNOT BE READ IN EVIDENCE AGAI NST THE ASSESSEE. HE HAS RELIED UPON DECISION OF HON'B LE SUPREME COURT IN THE CASE OF KISHAN CHAND CHELA RAM 125 ITR 713. 10(I) THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT DEDUCTION UNDER SECTION 24(A) OF THE ACT 7 IS STATUTORY DEDUCTION AND IS NOT DEPENDANT UPON RE PAIR OF BUILDING ETC., AS IS NOTED BY AUTHORITIES BELOW . HE HAS REFERRED TO THE REGISTERED LEASE DEED DATED 12.03.2007 BETWEEN ASSESSEE AND THE TENANT, COPY OF WHICH IS FILED AT PAGE 61 OF THE PAPER BOOK AND SUBMITTED THAT THE LAND AND BUILDING WAS GIVEN ON R ENT FOR A PERIOD OF 50 YEARS AND THERE ARE CLAUSES PROV IDED IN THE LEASE DEED THAT IN CASE THE LEASE IS NOT REN EWED, THE LESSEE/TENANT SHALL HAND OVER LAND AND BUILDING ALONGWITH ALL CONSTRUCTION TO THE ASSESSEE. HE HAS SUBMITTED THAT THE SCHEDULE-I TO LEASE DEED IS FILE D AT PAGE 79 OF THE PAPER BOOK WHICH SHOWS THAT AT THE T IME OF LETTING OUT OF THE PROPERTY IN QUESTION, THE LAN D ALONGWITH BUILDING AND SUPER-STRUCTURE WAS GIVEN ON RENT TO THE TENANT. HE HAS SUBMITTED THAT IN ASSESSMENT YEAR 2009-10, THE ASSESSEE DECLARED RENT AL INCOME IN RETURN OF INCOME FROM THE SAME TENANTED PROPERTY AND CLAIMED DEDUCTION UNDER SECTION 24(A) OF THE ACT @ 30% OF THE ANNUAL VALUE WHICH HAVE BEEN ACCEPTED BY THE ASSESSING OFFICER IN THE ORDER UNDE R SECTION 143(3) OF THE ACT DATED 13.12.2011, COPY OF WHICH IS FILED AT PAGE 5 OF THE PAPER BOOK, HOWEVER , ASSESSING OFFICER HAS DISALLOWED THE INTEREST UNDER SECTION 24(B) OF THE INCOME TAX ACT. HOWEVER, THE APPEAL OF THE ASSESSEE ON THIS ISSUE HAVE BEEN ALLO WED BY ITAT CHANDIGARH BENCH IN THE CASE OF SAME ASSESS EE IN ITA 77/2013 DATED 30.05.2014 AND INTEREST UNDER 8 SECTION 24(B) HAVE BEEN ALLOWED DEDUCTION BY THE TRIBUNAL. 11. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO DEPARTMENTAL APPEAL HAVE BEEN PREFERRED BEFORE HIGH COURT AGAINST THE SAID DECISION OF THE TRIBUNAL AND DESPITE GIVING OPPORTUNITY TO THE LD. DR TO VERIFY THIS FACT, NO ADVERSE COMMENTS HAVE BEEN OFFERED. HE HA S, THEREFORE, SUBMITTED THAT ISSUE IS COVERED AGAINST THE DEPTT. BY ORDER OF ITAT IN ASSESSMENT YEAR 2009-10 (SUPRA). THE LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT SINCE IN EARLIER YEAR RENTAL INCOME HAS BEEN ASSESS ED UNDER THE HEAD INCOME FROM HOUSE PROPERTY, THEREF ORE, SAME CANNOT BE CHANGED IN SUBSEQUENT YEAR AND RELIE D UPON DECISION OF HON'BLE PUNJAB & HARYANA HIGH COUR T IN THE CASE OF CIT VS HARYANA TOURISM CORPORATION L TD. 327 ITR 26. HE HAS REFERRED TO PB-39 WHICH IS BALA NCE SHEET ON 31.03.2011 AND PB-45 IS BALANCE SHEET AS O N 31.03.2009 IN WHICH THE TENANTED PROPERTY CONSISTS OF LAND AND BUILDING, HAVE BEEN SHOWN IN THE INVESTMEN T. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMIT TED THAT MERELY BECAUSE TENANT HAS RAISED SOME CONSTRUCTION OVER THE DEMISED PROPERTY WOULD NOT BE LEGAL BAR FOR ASSESSEE TO CLAIM RENTAL INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND ASSESSEE IS, THEREFORE, ENTITLED FOR STATUTORY DEDUCTION UNDER S ECTION 24(A) OF THE INCOME TAX ACT. ON THE OTHER HAND, LD . DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW AND 9 SUBMITTED THAT SINCE ASSESSEE WAS NOT OWNER OF THE SUPER STRUCTURE AND OLD CONSTRUCTION HAVE BEEN REMO VED AND NEW CONSTRUCTION HAVE BEEN RAISED BY THE TENANT , THEREFORE, ASSESSEE WOULD NOT BE ENTITLED FOR DEDUC TION UNDER SECTION 24(A) OF THE ACT. 12. WE HAVE CONSIDERED RIVAL SUBMISSIONS. THE ASSESSING OFFICER HAS ANALYZED THE TERMS OF THE LEA SE DEED FOR ARRIVING AT THE DECISION AGAINST THE ASSES SEE. SECTION 24(A) OF THE ACT PROVIDES, DEDUCTION FROM INCOME FROM HOUSE PROPERTY, INCOME CHARGEABLE UN DER THE HEAD INCOME FROM HOUSE PROPERTY SHALL BE COMPUTED AFTER MAKING THE DEDUCTION, (A) A SUM EQUA L TO 30% OF ANNUAL VALUE. IT IS NOT IN DISPUTE THAT PR OPERTY IN QUESTION WAS LET OUT BY THE ASSESSEE TO M/S SARO VAR HOTELS PVT. LTD. (TENANT) VIDE REGISTERED LEASE DEE D DATED 12.03.2007. ACCORDING TO THE DEED, THE TENA NTED PROPERTY CONSISTS OF LAND AND BUILDING AS MENTIONED IN THE SCHEDULE-I WAS LET OUT TO THE TENANT. THE SCHE DULE-I TO THE LEASE DEED ALSO MENTIONED THAT BUILDING BUIL T UP IN THE PLOT IN QUESTION HAVE BEEN LET OUT TO THE TE NANT. AT THE TIME OF GIVING POSSESSION OF THE TENANTED PROPERTY, IT IS ALSO SPECIFICALLY MENTIONED THAT LA ND ALONGWITH BUILDING CONSTRUCTED THEREON, HAVE BEEN HANDED OVER TO THE TENANT FOR THE PURPOSE OF LETTIN G OUT THE PROPERTY. THE PROPERTY IN QUESTION WAS LEASED ON LONG TERM LEASE FOR A DURATION OF 50 YEARS. ACCORD ING TO PARA 1.3 OF THE LEASE DEED, IN CASE THE LEASE DOES NOT GET 10 RENEWED, THE LESSEE AGREES TO HAND OVER LAND/PLOTS/BUILDING ALONGWITH ALL CONSTRUCTION ETC. CARRIED OUT BY THE LESSEE, BACK TO THE LESSOR (ASSE SSEE) WITHIN ONE MONTH FROM THE EXPIRY OF THE LEASE PERIO D. ACCORDING TO CLAUSE 6.2(B) OF THE LEASE DEED, ON EX PIRY OF THE TERM OF THE LEASE, THE LESSEE SHALL WITHIN ONE MONTH HAND OVER PEACEFUL POSSESSION OF THE LAND/PLOTS AND THE STRUCTURE BUILT THEREON TO THE LESSOR (ASSESSEE). 12(I) ACCORDING TO CLAUSE 11.4 OF THE LEASE DEED, U PON EXPIRY OR TERMINATION OF THE LEASE, LESSEE SHALL, W ITHIN ONE MONTH FROM THE EXPIRY OF TERMINATION OF THE LEA SE, HAND OVER THE LAND/PLOTS WITH THE BUILDING THEREON FREE FROM ANY LIEN OR ANY ENCUMBRANCE AND SHALL BE FREE TO REMOVE ITS MOVABLE ASSETS FROM THE HOTEL STRUCTURE OR ANY STRUCTURE CONSTRUCTED ON THE LAND/PLOT. 13. ACCORDING TO THE LEASE DEED ALSO, THE LESSEE (TENANT) SHALL BE AT LIBERTY TO EFFECT AND CARRY OU T AT ITS COST, CONSTRUCTION, RENOVATION, REPAIR ETC. OF THE HOTEL STRUCTURE OR RAISE ANY OTHER CONSTRUCTION. THE TER MS OF THE LEASE DEED BETWEEN ASSESSEE AND THE TENANT, THEREFORE, CLEARLY DISCLOSE THAT THE DEMISED PROPER TY WAS LET OUT TO THE TENANT FOR A LONG PERIOD OF LEASE I. E. 50 YEARS AND AT THE TIME OF LETTING OUT THE PROPERTY I N QUESTION, ASSESSEE HAD LET OUT THE LAND AND BUILDIN G TO THE TENANT WHICH IS ALSO MENTIONED IN THE SCHEDULE- I TO THE LEASE DEED AND AT THE TIME OF HANDING OVER THE 11 POSSESSION. ACCORDING TO THE LEASE DEED, THE LESSEE/TENANT WAS AT LIBERTY TO RAISE ANY TYPE OF CONSTRUCTION IN THE PROPERTY AND THE OTHER CLAUSES OF THE LEASE DEED, AS REFERRED TO ABOVE, CLEARLY SHOW THAT IN CASE LEASE IS NOT RENEWED AFTER 50 YEARS OR THE LEA SE IS TERMINATED, THE LESSEE/TENANT SHALL HAVE TO HAND OV ER THE LAND/BUILDING ALONGWITH ALL CONSTRUCTION CARRIE D OUT THEREON TO THE ASSESSEE. IT WOULD, THEREFORE, CLEA RLY PROVE THAT THE ASSESSEE HAD LET OUT LAND AND BUILDI NG TO THE TENANT ALONGWITH SUPER STRUCTURE AND AT THE TIM E OF VACATING THE PROPERTY IN QUESTION, ASSESSEE WOULD B E ENTITLED FOR RESTORATION OF LAND/BUILDING WITH SUPE R STRUCTURE FROM THE LESSEE. SO LONG TENANCY CONTINUE D, TENANT WAS ENTITLED TO ENJOY THE DEMISED PROPERTY, TENANT COULD CARRY OUT ANY CONSTRUCTION OR REPAIR E TC. IN THE TENANTED PROPERTY. THE BALANCE SHEET OF THE ASSESSEE ALSO SHOWS THAT IN EARLIER YEAR, DEMISED PROPERTY WAS LAND AND BUILDING. THE TENANT SHALL H AVE TO REVERT BACK TO THE ASSESSEE THE BUILDING AND SUP ER STRUCTURE ON EXPIRY OF THE LEASE DEED. THEREFORE, T HE ASSESSEE HAD LET OUT LAND AND BUILDING TO THE TENAN T WITH SUPER STRUCTURE, THEREFORE, THE RENTAL INCOME RECEIVED OUT OF THE LETTING OUT THE DEMISED PROPERT Y, THE SAME INCOME WOULD BE IN THE NATURE OF INCOME FROM HOUSE PROPERTY. IN EARLIER ASSESSMENT YEARS, ASSES SEE HAD DECLARED RENTAL INCOME FROM THE SAME PROPERTY A S INCOME FROM HOUSE PROPERTY WHICH HAVE NOT BEEN DISPUTED BY THE INCOME TAX AUTHORITIES. IN ASSESSM ENT 12 YEAR 2009-10, THE ASSESSEE MADE CLAIM OF DEDUCTION OF 30% UNDER SECTION 24(A) OF THE ACT IN COMPUTING THE INCOME. THE ASSESSING OFFICER PASSED THE SCRUTINY ASSESSMENT ORDER UNDER SECTION 143(3) DATED 13.12.2 011 AND CLAIM OF ASSESSEE HAS NOT BEEN DISPUTED. THE ASSESSING OFFICER, HOWEVER, DID NOT ALLOW DEDUCTION ON ACCOUNT OF INTEREST ON CONVERSION CHARGES PAID TO E STATE OFFICER, CHANDIGARH ADMINISTRATION UNDER SECTION 24 (B) OF THE INCOME TAX ACT. HOWEVER, APPEAL OF THE ASSE SSEE HAS BEEN ALLOWED BY ITAT CHANDIGARH BENCH VIDE ORDE R DATED 30.05.2014 (SUPRA). ACCORDING TO THE ASSESSE E, THE ORDER OF THE TRIBUNAL HAS NOT BEEN CHALLENGED B EFORE HIGH COURT AND ACCEPTED BY THE REVENUE DEPARTMENT. IT WOULD, THEREFORE, CLEARLY PROVE THAT ASSESSEE CLAIM ED STATUTORY DEDUCTION UNDER SECTION 24(A) OF THE ACT IN EARLIER ASSESSMENT YEAR WHICH HAVE NOT BEEN DISPUTE D BY THE INCOME TAX AUTHORITIES AND WHEN INTEREST WAS DISALLOWED UNDER SECTION 24(B) OF THE ACT, IT WAS A LLOWED BY THE TRIBUNAL IN THE CASE OF THE ASSESSEE. THERE FORE, NATURE OF INCOME RECEIVED BY THE ASSESSEE WAS CLEAR LY HELD TO BE INCOME FROM HOUSE PROPERTY AND DEDUCTI ON UNDER SECTION 24 HAS BEEN ALLOWED. THE FINDINGS OF THE TRIBUNAL HAVE REACHED FINALITY AS PER SUBMISSIONS O F THE PARTIES ON IDENTICAL FACTS. THE ASSESSING OFFICER CANNOT BE PERMITTED TO TAKE DIFFERENT VIEW IN SUBSEQUENT Y EAR IN APPEAL ON SAME FACTS. 13 14. HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V HARYANA TOURISM CORPORATION LTD. 327 ITR 2 6 HELD AS UNDER : THE ASSESSEE WAS A PUBLIC SECTOR UNDERTAKING ENGAGE D IN THE BUSINESS OF RUNNING TOURIST COMPLEXES, HOTELS/MOTELS/RESORTS. IT DECLARED RENTAL INCOME OF R S. 1,16,50,981 UNDER THE HEAD 'INCOME FROM HOUSE PROPERT Y' AFTER CLAIMING DEDUCTION UNDER SECTION 24 OF THE INCOM E- TAX ACT, 1961. IT CLAIMED THAT SIMILAR DEDUCTIONS WER E MADE IN THE EARLIER YEARS. AN IDENTICAL ISSUE AROSE IN THE ASSESSMENT YEARS 1997-98, 1998-99 AND 2002-03 AND THE TRIBUNAL HAD ACCEPTED SUCH INCOME AS 'INCOME FROM HO USE PROPERTY'. HOWEVER, THE ASSESSING OFFICER SOUGHT TO A SSESS THE INCOME AS BUSINESS INCOME IN THE ASSESSMENT YEAR 2005-06. THE TRIBUNAL HELD THAT THE ASSESSMENT HAD TO BE MADE AS INCOME FROM HOUSE PROPERTY. THE TRIBUNAL AL SO ALLOWED CLAIMS FOR DEDUCTION AND DEPRECIATION. ON APPE AL TO THE HIGH COURT: HELD, DISMISSING THE APPEAL, (I) THAT ONCE A SIMILAR PROPOSITION HAD BEEN ACCEPTED BY THE REVENUE IN RES PECT OF ASSESSMENT YEAR 1997-98, THEN IT WAS NOT OPEN TO IT TO CHALLENGE A SIMILAR FINDING AND DEVIATE FROM ITS EAR LIER STAND. THE TRIBUNAL WAS RIGHT IN LAW IN HOLDING THAT THE RENTAL INCOME EARNED BY THE ASSESSEE FROM THE LETTIN G OUT OF SHOPS WAS ASSESSABLE UNDER THE HEAD 'INCOME FROM H OUSE PROPERTY' AND NOT INCOME FROM 'PROFITS AND GAINS OF BUSINESS PROFESSION'. 15. IT IS WELL SETTLED LAW THAT PRINCIPLE OF CONSIS TENCY APPLY TO THE INCOME TAX PROCEEDINGS. WE RELY UPON DECISION OF DELHI HIGH COURT IN THE CASE OF A.R.J. SECURITIES PRINTERS 264 ITR 276, DECISION OF MADHYA 14 PRADESH HIGH COURT IN THE CASE OF GODAWARI CORPORAT ION LTD. 156 ITR 835, DECISION OF HON'BLE PUNJAB & HARY ANA HIGH COURT IN THE CASE OF VIKAS CHEMI GUM INDIA 276 ITR 32 AND DECISION OF SUPREME COURT IN THE CASE OF RADHASOAMI SATSANG VS CIT 193 ITR 321. THESE FACTS , THEREFORE, CLEARLY PROVE ON RECORD THAT ASSESSEE HA D LET OUT BUILDING TO THE TENANT AND AT THE TIME OF EXPIR Y OF THE LEASE DEED, ASSESSEE WOULD BE ENTITLED FOR RESTORATION OF POSSESSION OF BUILDING WITH SUPER STRUCTURE, THEREFORE, MERELY THE TENANT HAS RAISED SOME CONSTRUCTION OVER THE DEMISED PROPERTY WOULD NOT DISENTITLE THE ASSESSEE FROM CLAIMING DEDUCTION UND ER SECTION 24(A) OF THE ACT. THE ASSESSEE WOULD ALWAYS BE DEEMED TO BE OWNER OF LAND AND BUILDING SO LET OUT. FURTHER, IF THE TENANT IS CLAIMING DEDUCTION OF DEPRECIATION ON THEIR CONSTRUCTED BUILDING, THERE I S NO BAR IN MAKING CLAIM OF DEDUCTION UNDER SECTION 24(A ) OF THE ACT BY THE ASSESSEE. THE AUTHORITIES BELOW FUR THER DENIED CLAIM OF DEDUCTION UNDER SECTION 24(A) OF TH E ACT ON THE REASON THAT THE SAME IS ALLOWED TO THE OWNER OF BUILDING SO THAT HE COULD CARRY OUT REQUISITE REPAI RS TO THIS BUILDING. THESE FINDINGS OF THE AUTHORITIES B ELOW ARE AGAINST THE PROVISIONS OF SECTION 24(A) OF THE ACT BECAUSE IT IS STATUTORY DEDUCTION AND WOULD NOT DEP END UPON CARRYING OUT OF ANY REPAIR IN THE BUILDING. A SUM EQUAL TO 30% OF THE ANNUAL VALUE IS ALLOWABLE DEDUC TION WITHOUT PROVING OR GIVING ANY EVIDENCE OF ANY REPAI R ETC., THEREFORE, FINDINGS OF AUTHORITIES BELOW ARE WHOLLY 15 INCORRECT AND WOULD NOT HOLD THE ORDERS OF THE AUTHORITIES BELOW. THE LD. COUNSEL FOR THE ASSESSE E ALSO ARGUED THAT THE INFORMATION RECEIVED UNDER SECTION 133(6) FROM THE TENANT WAS NEVER SUPPLIED OR CONFRO NTED TO THE ASSESSEE. WE, AFTER GOING THROUGH THE ORDER S OF AUTHORITIES BELOW DID NOT FIND ANY WHISPER IN THE IMPUGNED ORDERS IF ASSESSING OFFICER HAS SUPPLIED C OPY OF INFORMATION UNDER SECTION 133(6) OF THE ACT TO T HE ASSESSEE BEFORE PASSING ANY ADVERSE ORDERS AGAINST THE ASSESSEE. THEREFORE, ANY MATERIAL COLLECTED AT THE BACK OF THE ASSESSEE AND NOT CONFRONTED TO THE ASSESSEE AND WITHOUT CALLING FOR COMMENTS OF THE ASSESSEE WOULD NOT BE ADMISSIBLE IN EVIDENCE AGAINST THE ASSESSEE. THE ASSESSEE, THEREFORE, RIGHTLY RELIED UPON DECISION O F THE HON'BLE SUPREME COURT IN THE CASE OF KISHAN CHAND CHELA RAM (SUPRA). THERE IS NO OTHER MATERIAL BROUG HT ON RECORD AGAINST ASSESSEE FOR DISALLOWING CLAIM UN DER SECTION 24(A) OF THE ACT. 16. CONSIDERING THE ABOVE DISCUSSION, WE ARE OF THE VIEW THAT AUTHORITIES BELOW WERE WHOLLY UNJUSTIFIED IN DENYING DEDUCTION UNDER SECTION 24(A) OF THE ACT IN FAVOUR OF THE ASSESSEE. THE RENTAL INCOME IS CLEAR LY ASSESSABLE AS INCOME FROM HOUSE PROPERTY IN THE CAS E OF THE ASSESSEE. THEREFORE, ASSESSEE WOULD BE ENTITLE D FOR DEDUCTION UNDER SECTION 24(A) OF THE ACT. 16 17. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE OR DERS OF AUTHORITIES BELOW AND DIRECT THE ASSESSING OFFIC ER TO ALLOW DEDUCTION TO THE ASSESSEE UNDER SECTION 24(A) OF THE ACT IN A SUM OF RS. 57,10,796/-. GROUND NOS. 7 , 2, 3 AND 4 ARE ALLOWED. ISSUE NO. 3 18. ON GROUND NO. 8, ASSESSEE CHALLENGED THE ORDERS OF LD. CIT(APPEALS) IN SETTING ASIDE THE ISSUE OF ALLOWANCE OF INTEREST EXPENSES OF RS. 58,91,669/- CLAIMED UNDER SECTION 24(B) OF THE ACT AND PAYMENT OF RS. 40,37,979/- MADE TO ESTATE OFFICER. THE SAME I SSUE IS ALSO RAISED IN GROUND NO. 5. THE LD. CIT(APPEAL S) CONSIDERED THE ISSUE OF DISALLOWANCE OF INTEREST PA ID OF RS. 58,91,669/- CLAIMED UNDER SECTION 24(B) OF THE ACT AND AGAINST TREATING THE INTEREST EXPENDITURE OF RS . 40,37,979/- PAID TO ESTATE OFFICER AS CAPITAL EXPENDITURE. THE LD. CIT(APPEALS) NOTED THAT SINCE HE HAS ALREADY GIVEN A FINDING THAT RENT RECEIVED BY T HE ASSESSEE IS TO BE ASSESSED AS 'INCOME FROM OTHER SOURCES' THEREFORE, ASSESSEE WOULD NOT BE ENTITLED FOR ANY DEDUCTION UNDER SECTION 24 OF THE ACT. HOWEVER , IN ORDER TO GIVE OPPORTUNITY TO THE ASSESSEE TO PROVE THAT EXPENSES WERE INCURRED WHOLLY AND EXCLUSIVELY FOR T HE PURPOSE OF EARNING THE LEASE MONEY, MATTER WAS REST ORED TO THE ASSESSING OFFICER. 17 19. AFTER HEARING RIVAL CONTENTIONS, WE ARE OF THE VIEW THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY O RDER OF ITAT CHANDIGARH BENCH IN THE CASE OF SAME ASSESSEE FOR ASSESSMENT YEAR 2009-10 IN ITA 77/2013 DATED 30.05.2014 IN WHICH THE TRIBUNAL ALLOWED DEDUCTION ON THIS ISSUE IN FAVOUR OF THE ASSESSEE. THE ORDERS O F AUTHORITIES BELOW ARE SET ASIDE. THE ASSESSING OFF ICER IS, THEREFORE, DIRECTED TO FOLLOW ORDER OF THE TRIB UNAL (SUPRA) AND PASS A CONSEQUENTIAL ORDER ACCORDINGLY. 20. IN THE RESULT, GROUND NOS. 5 AND 8 OF THE APPEA L OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 21. NO OTHER POINT IS ARGUED OR PRESSED. 22. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED, AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (OM PRAKASH KANT) (BHAVNESH SA INI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3 RD OCTOBER, 2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD