MODI TIN PRINTERS P.LTD, MUMBAI V. ITO 8(2)(3), MUMBAI

ITA 994/MUM/2012

• Counselvise Citation: 99419914 RSA 2012
• Duration Of Justice: 3 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-08-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 13-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M RANJANDR
• Assessee Lawyers: LALKAKA
• Keywords: Business income; Depreciation; Business expenditure; Additional evidence
• Section: 143(3); 37

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI R.C.SHARMA, ACCOUNTANT MEMBER ITA NO.994/MUM/2012 ASSESSMENT YEAR: 2007-08 M/S MODI TIN PRINTERS PVT. LTD. PLOT NO.113, 15 TH ROAD, MIDC, ANDHERI (E), MUMBAI-400093 / VS. ITO-8(2)3, MUMBAI ( !'# $ /ASSESSEE) ( % / REVENUE) P.A. NO. AAACM94 39L ITA NO.725 /MUM/2014 ASSESSMENT YEAR: 2004-05 D.C.I.T.8(2), R. NO.216-A, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 / VS. M/S MODI TIN PRINTERS PVT. LTD. PLOT NO.113, 15 TH ROAD, MIDC, ANDHERI (E), MUMBAI-400093 ( % / REVENUE) ( !'# $ /ASSESSEE) P.A. NO.AAACM9439L ITA NO.748/MUM/2014 ASSESSMENT YEAR: 2006-07 ITO.8(2)-3 R. NO.213/216-A, 2 ND FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 / VS. M/S MODI TIN PRINTERS PVT. LTD. PLOT NO.113, 15 TH ROAD, MIDC, ANDHERI (E), MUMBAI-400093 ( % / REVENUE) ( !'# $ /ASSESSEE) P.A. NO.AAACM9439L M/S MODI TIN PRINTERS PVT. LTD. ITA NO.994/MUM/2012 & ORS. CASES 2 !'# $ / ASSESSEE BY SHRI LALKAKA % / REVENUE BY SHRI M. RANJAN-DR & !%' ( $ ) / DATE OF HEARING : 06/08/2015 ( $ ) / DATE OF ORDER: 25/08/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE AS WELL AS THE REVENUE ARE AGGRIEVED BY THE IMPUGNED ORDERS DATED 22/12/2011 (ASSESSMENT YEAR 2 007- 08) AND 29/11/2013 (ASSESSMENT YEARS 2004-05 & 2006 -07) OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI. IN TH E APPEALS OF THE REVENUE, THE COMMON GROUND RAISED PERTAINS TO UPHOLDING THE CLAIM OF THE ASSESSEE TREATING THE COMPENSATION RECEIVED FROM M/S SRL RANBAXY LTD. AS BUSINESS INCOME WITHOUT APPRECIATING THAT THE ASS ESSEE HAS RECEIVED COMPENSATION FOR ALLOWING USER OF THE PROP ERTY AND NOT FOR CARRYING OUT SYSTEMATIC ACTIVITY WHICH IS A PRE- CONDITION FOR BUSINESS, THEREFORE, IT HAS TO BE TAX ED AS INCOME FROM OTHER SOURCES AND FURTHER IGNORING TH E FACT THAT THE ASSESSEE WAS PROVIDING CERTAIN AMENITIES WHICH REPRESENT RUNNING AND MAINTENANCE OF THE PROPERTY AND REGULAR AMENITIES AND FACILITIES FOR OCCUPANTS LIKE ANY OTH ER OWNER. 2. DURING HEARING OF THIS APPEAL, THE LD. DR, SHRI M. RANJAN, ADVANCED HIS ARGUMENTS WHICH ARE IDENTICAL TO THE GROUND RAISED. ON THE OTHER HAND, SHRI LALKAKA, LD . COUNSEL FOR THE ASSESSEE, CLAIMED THAT THE IMPUGNED ISSUE I S COVERED M/S MODI TIN PRINTERS PVT. LTD. ITA NO.994/MUM/2012 & ORS. CASES 3 BY THE DECISION OF THE TRIBUNAL IN THE CASE OF GESC O CORPORATION LTD. VS ACIT (2009) 31 SOT 132 (MUM.), HARVINDRA PAL MEHTA (HUF) VS DCIT (2009) 122 TTJ MU MBAI 163, CIT VS GOEL BUILDERS (2010) 45 DTR (ALL) 318. THIS FACTUAL MATRIX WAS CONSENTED TO BE CORRECT. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACT S, IN BRIEF, ARE THAT THE ASSESSEE RECEIVED THE AMOUNT OF RS.45, 42,300/- ON ACCOUNT OF LETTING OUT OF THE PREMISES FROM M/S ATUL KUMAR & COMPANY ON A MONTHLY RENT OF RS.75,000/- F OR A PERIOD OF TWELVE YEAR. WITH THE PERMISSION FROM THE OWNER OF THE PROPERTY, THE ASSESSEE DEVELOPED AND CONSTRUCTE D THE FIRST FLOOR OF THE PREMISES AND LET OUT THE PREMISE S TO M/S SRL RANBAXY LTD. ALONGWITH FURNITURE, FIXTURE AND F ITTING FOR WHICH THE ASSESSEE RECEIVED RS.45,20,300/- AS COMPENSATION. A SERVICE CENTRE AGREEMENT DATED 23/03/2000 WAS EXECUTED BETWEEN THE ASSESSEE COMPAN Y AND M/S SRL RANBAXY LTD.. THE ASSESSING OFFICER TRE ATED THE AMOUNT AS INCOME FROM OTHER SOURCES ON THE PLEA THA T THE PREMISES WAS LET OUT BY THE ASSESSEE ALONGWITH FURN ITURE AND FIXTURE. ON APPEAL, BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS), THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE WAS CONSIDERED AFTER GETTING A REMAND REPORT FROM T HE ASSESSING OFFICER AND DECIDED IN FAVOUR OF THE ASSE SSEE. THUS, THE REVENUE IS AGGRIEVED AND IS IN APPEAL BEF ORE THIS TRIBUNAL. BEFORE COMING TO ANY CONCLUSION, WE ARE M/S MODI TIN PRINTERS PVT. LTD. ITA NO.994/MUM/2012 & ORS. CASES 4 REPRODUCING HEREUNDER THE RELEVANT PORTION FROM THE IMPUGNED ORDER:- 1.3.1 . GROUND NOS. 1 TO 4 AND ADDITIONAL GROUND OF APPEAL DEAL WITH THE SAME ISSUE 'HENCE ARE DECIDED TOGETHE R. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND CONTENTION OF THE LD, AR OF THE APPELLANT AND ALSO CAREFULLY GONE THR OUGH THE FACTS AND EXPLANATION GIVEN BY THE LD. AR OF THE AP PELLANT AS WELL AS THE LD. AO. IN THIS CASE, THE APPELLANT RAI SED THE CONTENTION BEFORE THE HON'BLE ITAT THAT IT HAD CONS TRUCTED THE PROPERTY ON FIRST FLOOR. TO SUPPORT ITS ARGUMEN T, THE APPELLANT PLACED THE COPY OF THE AGREEMENT AND ITS BALANCE SHEET TO INDICATE THAT IT HAD CONSTRUCTED THE FIRST FLOOR AND GIVEN IT ON LEAVE & LICENSE BASIS TO M/S SPECIALTY RANBAXY LIMITED. IN THE SAID AGREEMENT, THE APPELLANT HAS B EEN SHOWN AS THE OWNER OF THE PROPERTY HAVING RIGHT, TITLE AN D INTEREST ON THE PLOT OF LAND AND THE BUILDING CONSTRUCTED ON THE FIRST FLOOR THEREON HAVING A GROUND FLOOR ADMEASURING ABO UT 12500 SQ. FT. IT WAS ALSO MENTIONED THEREIN THAT TH E COMPANY HAD ITS OWN COST AND IN ACCORDANCE WITH THE EXTANT RULES, LAWS AND REGULATIONS CONSTRUCTED ON THE EXISTING GROUND FLOOR, THE FIRST FLOOR OF AN AREA APPROXIMATELY 2500 SQ. MT. T HE APPELLANT ALSO CONTENDED THAT' IT HAD GIVEN THE ENT IRE DETAILS ALONGWITH PAPER BOOK SUBMITTED BY IT BEFORE THE HON 'BLE ITAT. THE ENTIRE DETAILS PLACED BY THE APPELLANT BE FORE THE LD. AO REVEALED THAT THE APPELLANT COMPANY HAD ACQUIRED THE RIGHT TO CREATE\THE BUSINESS CENTRE FROM ITS SISTER CONCERN NAMELY M/S ATUL KUMAR & COMPANY. THE APPELLANT COMP ANY INVESTED FUNDS AND CREATED A BUSINESS CENTRE WITH A LL THE FACILITIES. THEREUPON IT HAD ENTERED INTO AN AGREEM ENT WITH MR. SPECIALITY RARIBAXY LIMITED TO PROVIDE FACILITY AS PER THE AGREEMENT. THE OBSERVATIONS OF THE LD. ASSESSING OF FICER THAT IT HAD NOT PAID ANYTHING FOR THE CONSTRUCTION OF TH E PROPERTY IS NOT BORNE OUT OF THE RECORDS' SUBMITTED BY THE A PPELLANT. FURTHER, DURING THE COURSE OF THE APPELLATE PROCEED INGS, I FIND THAT THE APPELLANT ALSO GAVE SEVERAL DETAILS WHICH WERE TREATED BY IT AS ADDITIONAL EVIDENCE. MY LD. PREDEC ESSOR HAD CALLED FOR A REMAND REPORT FROM THE DCIT, RANGE-8(2 ), MUMBAI ON 25/09/2012. M/S MODI TIN PRINTERS PVT. LTD. ITA NO.994/MUM/2012 & ORS. CASES 5 13.2. IN THE REMAND REPORT THE LD. ASSESSING OFFICE R SUBMITTED THAT THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE SHOULD NOT BE ADMITTED RELYING ON THE DECI SION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF RAM PRA SAD SHARMA VS CIT (1979) 119 ITR 867 WHEREIN IT WAS HEL D THAT ACCORDING TO RULE 46A, THE APPELLANT SHOULD NOT BE ENTITLED TO PRODUCE BEFORE THE CIT(A) ANY EVIDENCE WHETHER ORAL OR DOCUMENTARY WHICH WAS NOT PRODUCED IN THE COURSE OF PROCEEDINGS BEFORE THE ASSESSING OFFICER EXCEPT IN SPECIFIED CIRCUMSTANCES. THAT THE SAID OBSERVATIONS OF THE LD . ASSESSING OFFICER IS WITHOUT APPRECIATING THE CONTEXT THAT TH E ADDITIONAL EVIDENCES ARE PRODUCED IN COMPLIANCE TO THE ORDER O F THE HONBLE ITAT. THE HONBLE ITAT HAD DIRECTED THE LD . ASSESSING OFFICER TO CALL FOR THE ADDITIONAL EVIDEN CES TO SATISFY ITSELF THAT THE CONSTRUCTION WAS MADE BY THE APPELL ANT BY INVESTING ITS OWN FUNDS. IT IS ALSO A MATTER OF FA CT THAT THE DOCUMENTS SUCH AS BALANCE SHEET, PROFIT AND LOSS AC COUNT AND OTHER DOCUMENTS EVIDENCING THE CONSTRUCTION WERE AL SO LAID BEFORE THE HONBLE ITAT. HOWEVER, REGARDING THE AD DITIONAL EVIDENCES, THE ITAT HAD SET ASIDE THE MATTER BACK T O THE FILE OF THE LD. ASSESSING OFFICER FOR EXAMINATION. THEREFOR E, THE ADDITIONAL EVIDENCES ARE TO BE TAKEN ON RECORD AND CANNOT BE REJECTED. MOREOVER, THE JUDICIAL PRINCIPLES IN THI S REGARD REQUIRES THAT, IN ANY MATTER WHERE THE ADDITIONAL E VIDENCES ARE REQUIRED TO DECIDE THE MATTER THE SAME MAY BE A DMITTED. THEREFORE, THERE IS NO FORCE IN THE ARGUMENT OF THE LD. ASSESSING OFFICER, THE ADDITIONAL EVIDENCES ARE THE REFORE ADMITTED. 13.3. THE LD, AO SUBMITTED THAT, THE AO VIDE ITS OR DER DATED 29.09.2011 PASSED THE ORDER GIVING EFFECT TO THE OR DER OF THE ITAT U/S. 143(3) R.W.S, 254 OF THE ACT WHEREIN THE COMPENSATION RECEIVED BY THE ASSESSEE COMPANY FROM M/ S. RANBAXY LTD. WAS TREATEDAS INCOME FROM OTHER SOURCE S AS AGAINST THE ASSESSEE'S CLAIM OF BUSINESS INCOME. FU RTHER, THE LD. ASSESSING OFFICER REGARDING THE ADDITIONAL SUBM ITTED BEFORE THE ID. CIT(A) DURING THE APPELLATE PROCEEDI NGS THAT NONE OF THE DOCUMENTS SUBMITTED SERVE THE PURPOSE O F THE M/S MODI TIN PRINTERS PVT. LTD. ITA NO.994/MUM/2012 & ORS. CASES 6 ASSESSEE. NO NEW FACTS OR MATERIAL EVIDENCE HAS BE EN PRODUCED WHICH PROVES THE ASSESSEES POINT OF VIEW. THE AO HAS PROPERLY RECORDED THE REASONS WHILE TREATING TH E COMPENSATION RECEIVED FROM M/S. SRL RANBAXY LTD. AS INCOME FROM OTHER SOURCES AS AGAINST THE ASSESSEE'S CLAIM OF TREATING IT AS BUSINESS INCOME. IT IS CLEAR FROM THE AGREEM NT SIGNED BETWEEN THE ASSESSEE COMPANY AND M/ S. ATULKUMAR & CO. SUBMITTED DURING THE PROCEEDINGS AT THE TRIBUNAL TH AT M/S. ATULKUMAR & CO. IS THE OWNER OF THE BUILDING AND AT THE SAME TIME, THE COMPENSATION RECEIVED FORM M/ S. SRL RANB AXY LTD. IS NOTHING BUT A COMPENSATION RECEIVED IN LIEU OF S UBLETTING OF THE PROPERTY. THE ASSESSEE HAS NOT BROUGHT ANY MATE RIAL EVIDENCE ON RECORD TO ESTABLISH ITS CLAIM. IN FACT, ALL THE DOCUMENTS PRODUCED DURING THE REMAND PROCEEDINGS AS ADDITIONAL EVIDENCE ARE NOTHING BUT SELF CREATED DO CUMENTS MADE BY THE ASSESSEE COMPANY AND ITS SISTER CONCERN S. MOREOVER, THE LEASE IS VALID ONLY FOR 10 YEARS AND FOR ALL PRACTICAL PURPOSE OF THE INCOME TAX ACT, 1961 THE L ESSEE I.E. THE ASSESSEE CANNOT BE TREATED AS DEEMED OWNER OF T HE PREMISE SUBLET TO M/S SRL RANBAXY LTD. THE ASSESSEE HAS RELIED ON LEGAL PRONOUNCEMENTS AND JUDICIALDECISION S TO CORROBORATE ITS POINT AND IT IS SEEN FORM THE RECOR DS AS WELL AS THE JUDICIAL PRONOUNCEMENTS THAT NONE OF THEM SUPPO RTS THE ASSESSEES POINT OF VIEW. THUS, THE LD. ASSESSING O FFICER STATED THAT IT IS FIRST TIME THAT THE CASE HAS BEEN SUBJEC TED TO SCRUTINY AND HENCE THE STAND OF THE ASSESSEE COMPAN Y IS NOT VALID AS IN EARLIER YEARS THE RETURN FILED BY THE A SSESSEE COMPANY WAS ACCEPTED WITHOUT ANY VERIFICATION U/S 1 43(3) OF THE ACT AND HENCE THE ADDITIONAL EVIDENCE FILED DUR ING THE COURSE OF APPELLATE PROCEEDINGS MAY BE REJECTED AND THE CASE MAY BE DECIDED ON ITS MERITS. I THINK THE LD. ASSES SING OFFICER HAS NOT READ THE DECISION OF THE HONBLE ITAT PROPE RLY. THE HONBLE ITAT REQUIRED THE LD. ASSESSING OFFICER TO VERIFY AS TO WHETHER THE CONSTRUCTION IS MADE BY THE APPELLANT T HROUGH ITS OWN FUNDS. THE LD. ASSESSING OFFICER SHOULD HAV E LOOKED INTO THIS MATTER, BUT RATHER LOOKING INTO THE SAID MATTER, THE LD. ASSESSING OFFICER IS HARPING ON THE ISSUE OF OW NERSHIP OF THE PROPERTY WHICH IS NOT IN DISPUTE. THE FACT THA T THE APPELLANT IS NOT THE OWNER OF THE PROPERTY IS CLEAR LY BORNE OUT M/S MODI TIN PRINTERS PVT. LTD. ITA NO.994/MUM/2012 & ORS. CASES 7 OF THE AGREEMENT SUBMITTED BY THE APPELLANT. FURTHE R, THE LEASE AGREEMENT WITH ITS SISTER ORGANIZATION IS ALS O AVAILABLE ON RECORD TO PROVE THIS FACT. TO PROVE THAT THE AP PELLANT HAS INCURRED THE AMOUNT FOR CONSTRUCTION OF THE PROPERT Y, THE APPELLANT HAD PRODUCED DOCUMENTARY EVIDENCES NAMELY THE LEDGER ACCOUNT OF M/S. VISHAKA CONSTRUCTION COMPANY ITS PROFIT AND LOSS ACCOUNT, BALANCE SHEET AND THE CERT IFICATE OF AN ARCHITECT INDICATING THAT THE PROPERTY WAS CONST RUCTED BY THE APPELLANT. THEREFORE, THERE IS NO DOUBT ON THIS ISSUE AND THE SAME STAND IS PROVED BY THE EVIDENCES PLACED ON RECORD. 13.4. THE DISPUTE TO THE MIND THAT ARISES IN THE IN STANT CASE ARE TWOFOLD. FIRSTLY, WHETHER THE PROPERTY IN QUESTION, WAS CONSTRUCTED BY THE APPELLANT OR NOT? SECONDLY, IF THE APPELLANT IS THE OWNER OF THE PROPERTY, CAN INCOME RECEIVED FROM M/S SPECIALITY RANBAXY LIMITED BE TREATED AS INCOME FROM BUSINESS OR INCOME FROM OTHER SOURCES AS IS DONE BY THE LD. ASSESSING OFFICER. I FIND THAT IN ORDER TO PROVE WHETHER THE APPELLANT HAS CONSTRUCTED THE PROPERTY IN QUEST ION OR NOT, THE IMPORTANT ASPECT THAT REQUIRED TO BE SEEN WHO H AD INCURRED THE FUNDS FOR CONSTRUCTION AND WHETHER THE PERMISSION WAS OBTAINED FROM THE COMPETENT AUTHORIT Y TO CONSTRUCT THE PROPERTY. ACCORDINGLY, THE APPELLANT WAS ASKED TO PRODUCE THE APPROVALS THAT WAS OBTAINED FROM MID C REGARDING CONSTRUCTION OF THE BUILDING PLAN. IT WA S FOUND THAT THE APPROVAL WAS GIVEN TO M/S M.S. TUNGARE & A SSOCIATES IN RESPECT OF MODIFIED BUILDING PLAN FOR PROPOSED F ACTORY ON PLOT NO.113 IN MAROL CENTRAL AREA BY M/S ATUL KUMAR & COMPANY. FURTHER, IT IS SEEN THAT THE COMPLETION C ERTIFICATE WAS ALSO ISSUED BY MIDC IN THE NAME OF M/S ATUL KUM AR & COMPANY, THEREFORE IT IS EVIDENT THAT THE APPELLANT HAD THE APPROVAL FOR PROPOSAL. FURTHER, THE BALANCE SHEET OF THE APPELLANT ALSO DOES INDICATE THAT THE BUILDING WAS CONSTRUCTED BY THE APPELLANT, THEREFORE, FROM THE R ECORD IT IS DISCERNIBLE THAT APPELLANT HAD CONSTRUCTED THE BUIL DING. THE APPELLANT HAD ALSO PLACED ON RECORD AGREEMENT BETW EEN M/S ATUL KUMAR & COMPANY, THE APPELLANT SISTER CONCERN AND THE APPELLANT INDICATING THAT M/S. ATUL KUMAR & COMPANY IS THE EXCLUSIVE OWNER OF THE PROPERTY AND HAD CONSTRUCTED THE M/S MODI TIN PRINTERS PVT. LTD. ITA NO.994/MUM/2012 & ORS. CASES 8 BUILDING ON THE GROUND FLOOR. IT WAS ALSO INDICATE D IN THE AGREEMENT THAT THE APPELLANT HAD ITS OWN COST AND I N ACCORDANCE WITH THE APPLICABLE RULES, LAWS AND REGU LATIONS CONSTRUCT ON THE EXISTING GROUND FLOOR BUILDING AND FIRST FLOOR OF AN AREA OF APPROXIMATELY 12500 SQ. FT. FOR BEING USED FOR INDUSTRIAL PURPOSE. IT IS FURTHER EVIDENT FROM THE AGREEMENT THAT THE OWNER HAD GIVEN A LEASE OF 10 YE ARS ON A MONTHLY RENT OF RS.75,000/-. FROM THE FOREGOING THE FACTS ON RECORD, IT IS EVIDENT THAT THE APPELLANT HAD CONSTR UCTED THE PROPERTY. THEREFORE, I FIND THAT THE APPELLANT DURI NG THE COURSE OF THE SECOND ROUND OF THE ASSESSMENT AND AP PELLATE PROCEEDINGS PRODUCED SUITABLE EVIDENCES TO SUPPORT OF ITS CLAIM THAT THE PROPERTY WAS CONSTRUCTED BY THE APPE LLANT AT ITS OWN COST. XXXXXXXXXXXXXXXXXXXX 1.3.9. THEREFORE, THE PREPONDERANCE OF THE JUDICIAL DECISIONS INDICATE THAT THE INCOME FROM SERVICE CEN TRE IS TO BE TREATED AS INCOME FROM BUSINESS AND SAME VIEW WAS HELD BY THE HONBLE BOMBAY HIGH COURT, WHEREIN DISMISSED TH E APPEAL FILED BY THE DEPARTMENT IN THE CASE OF M/S O MSAGAR ENGINEERING PVT. LTD. VS ACIT, ITA NO.2989/MUM/2003 , BENCH-K. IN MY VIEW, THE ENTIRE CONTROVERSY OF TAX ING THE INCOME FROM ONE HEAD TO ANOTHER LOSES SIGNIFICANCE AS THE ENTIRE EXPENDITURE CLAIMED BY THE APPELLANT U/S 37 OF THE ACT ARE TO BE ALLOWED U/S .57 OF THE ACT AS THE EXPENDI TURES ARE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF EARNING THE INCOME. THE ENTIRE EXPENDITURE THAT HAS BEEN I NCURRED BY THE APPELLANT ARE BASICALLY THE DEPRECIATION AND TH E REMUNERATION, HOWEVER EXPENSES SUCH AS ELECTRICITY, BROKERAGE, VEHICLE CHARGES, POSTAL AND TELEPHONE AR E OF INCIDENTAL TO EARNING THE INCOME. SO EVEN IF WE CH ANGE THE HEAD OF THE INCOME MAJORITY OF THE EXPENSES CLAIMED BY THE APPELLANT ARE EVEN OTHERWISE ALLOWABLE IF THE INCOM E IS ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES . HOWEVER, LOOKING TO THE FACTS OF THE APPELLANTS CA SE, THE APPELLANT UNDERTAKING A BUSINESS ACTIVITY WHEREIN T HE INCOME IS NOT THE RENT SIMPLICITER BUT IT INVOLVES MOST OF OTHER ACTIVITIES FOR WHICH SERVICE CHARGES ARE RECEIVED. THEREFORE, THE INCOME OF THE APPELLANT IS TREATED AS INCOME F ROM M/S MODI TIN PRINTERS PVT. LTD. ITA NO.994/MUM/2012 & ORS. CASES 9 BUSINESS AND THE LD. ASSESSING OFFICER IS DIRECTED TO ALLOW THE EXPENSES CLAIMED BY THE APPELLANT. IN VIEW OF THIS , THE LD. ASSESSING OFFICER IS DIRECTED ACCORDINGLY TO ALLOW THE EXPENSES CLAIMED BY THE APPELLANT. THESE GROUNDS OF APPEAL A RE THUS ALLOWED. 2.2. WE NOTE THAT WHILE COMING TO A PARTICULAR CONCLUSION, THE LD. COMMISSIONER OF INCOME TAX (APP EALS) DULY CONSIDERED THE AGREEMENT AND THE BALANCE SHEET INDI CATING THAT THE ASSESSEE CONSTRUCTED THE FIRST FLOOR AND G AVE THE SAME ON LEASE AND LICENSE BASIS TO M/S SRL (M/S. SPECIAL ITY RANBAXY LTD.). IN THE AGREEMENT, THE ASSESSEE WAS SHOWN AS THE OWNER OF THE PROPERTY HAVING RIGHT AND INTEREST ON THE PLOT OF LAND AND THE BUILDING CONSTRUCTED ON THE FIRST F LOOR THEREON HAVING A AREA ABOUT 12500 SQ. FT. THE ASSESSEE COMP ANY INVESTED FUNDS AND CREATED A BUSINESS CENTRE WITH A LL FACILITIES AND THEREAFTER IT ENTERED INTO AN AGREEMENT WITH M/ S SRL TO PROVIDE FACILITIES AS PER AGREEMENT. IT IS NOTED T HAT THE TRIBUNAL SENT THE ADDITIONAL EVIDENCE, FILED BEFORE IT, TO THE FILE OF ASSESSING OFFICER FOR EXAMINATION. THE ASSESSIN G OFFICER PASSED THE ASSESSMENT ORDER U/S 143(3) R.W.S 254 OF THE ACT PURSUANT TO GIVING EFFECT TO THE ORDER OF THE TRIBU NAL. WE NOTE THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) A NALYZED THE MATTER WITH RESPECT TO CONSTRUCTION OF THE PROP ERTY AND ALSO THE OWNERSHIP OF THE PROPERTY AND FOUND THAT T HE COMPLETION CERTIFICATE BY MIDC WAS IN THE NAME OF M /S ATUL KUMAR & COMPANY, THUS, THE ASSESSEE HAD THE APPROVA L AND THE BALANCE SHEET OF THE ASSESSEE ALSO INDICATED TH AT THE BUILDING WAS CONSTRUCTED BY THE ASSESSEE AND THUS, M/S ATUL KUMAR & COMPANY WAS EXCLUSIVE OWNER OF THE PROPERTY . IN M/S MODI TIN PRINTERS PVT. LTD. ITA NO.994/MUM/2012 & ORS. CASES 10 VIEW OF THE ASSESSMENT MADE BY THE DEPARTMENT, EVEN FOR THE SAKE OF CONSISTENCY, THE INCOME SHOULD HAVE BEEN AS SESSED AS INCOME FROM BUSINESS. OUR VIEW IS FORTIFIED BY THE DECISION IN THE CASE OF ACIT VS SAPTARISHI SERVICES LTD. 265 IT R 379 (GUJ.). SIMILARLY, IN CIT VS PATESHWARI ELECTRICAL ASSOCIATED INDUSTRIES PVT. LTD (282 ITR 61) (ALL.) HELD THAT T HE RECEIPT FROM THE S.B.I. WAS BUSINESS INCOME AND THE NECESSA RY EXPENDITURE INCURRED ON THE PROPERTY WAS ALLOWABLE AS BUSINESS EXPENDITURE. IN THE CASE OF HARVINDER PAL METHA (HUF) VS DCIT 19 DTR 523 (MUMBAI TRIBUNAL.) HELD TH AT RECEIPT FROM ACTIVITY OF PROVIDING THE SERVICE OF B USINESS CENTRE ALONGWITH VARIOUS FACILITIES LIKE RECEPTIONIST AND TELEPHONE OPERATOR, COMMON WAITING/GUEST ROOM WITH ATTACHED T OILET, CENTRAL AIR CONDITIONING SERVICES OF ATTENDANCE, TE LEPHONE, FAX MACHINE, FURNITURE, ETC ARE ASSESSABLE AS BUSINESS RECEIPTS AND NOT UNDER THE HEAD INCOME FROM HOUSE PROPERTY O R INCOME FROM OTHER SOURCES AS THE OBJECT OF THE ASSE SSEE IS TO RUN THE BUSINESS CENTRE BY EXPLOITING THE PROPERTY AND NOT MERELY LETTING OUT THE SAME. THE HONBLE JURISDICT IONAL HIGH COURT TOOK IDENTICAL VIEW IN M/S OMSAGAR ENGINEERIN G PVT. LTD. VS ACIT, THUS, WE FIND NO INFIRMITY IN THE IMP UGNED ORDER DIRECTING THE ASSESSING OFFICER TO TREAT THE INCOME AS INCOME FROM BUSINESS AND FURTHER ALLOWING THE CLAIMED EXPE NDITURE. BOTH THE APPEALS OF THE REVENUE, ARE THEREFORE, DIS MISSED, BEING ON IDENTICAL FACTS/ISSUES. 3. NOW, WE SHALL TAKE UP APPEAL OF THE ASSESSEE (I TA NO.994/MUM/2012) (ASSESSMENT YEAR 2007-08). WE NOTE THAT WHILE DISPOSING OFF THE APPEAL OF THE REVENUE (SUPR A), WE HAVE M/S MODI TIN PRINTERS PVT. LTD. ITA NO.994/MUM/2012 & ORS. CASES 11 DISMISSED THE APPEAL OF THE REVENUE ON IDENTICAL IS SUE, THUS, ON IDENTICAL PLEA, THIS APPEAL OF THE ASSESSEE IS A LLOWED. FINALLY, THE APPEALS OF THE REVENUE ARE DISMISSED A ND THAT OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 06/08/2015. SD/ - (R.C.SHARMA) SD/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER & ' /MUMBAI; *! DATED : 25/08/2015 F{X~{T? P.S/. !. . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,-. / THE APPELLANT 2. /0-. / THE RESPONDENT. 3. & 1$ ( +, ) / THE CIT, MUMBAI. 4. & 1$ / CIT(A)- , MUMBAI 5. 3%4 /$!' , +,) +' 5 , & ' / DR, ITAT, MUMBAI 6. 6 7' / GUARD FILE. / BY ORDER, 03,$ /$ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , & ' / ITAT, MUMBAI