M/s. Kirpa Ram Bros. (HUF), New Delhi V. ACIT, New Delhi

MA 77/DEL/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6917 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 24-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: B K ANAND
• Keywords: Business income; Rule of consistency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI (FRIDAY) BEFORE SHRI R.P. TOLANI AND SHRI B.C. MEENA M.A. NO. 77/DEL/2011 ( IN ITA NO.3153/DEL/10 ) ASSTT. YR: 2007-08 KIRPA RAM BROS. HUF, VS. ACIT, CIR. 32(1), C-153, DEFENCE COLONY, NEW DELHI. NEW DELHI. PAN/GIR NO. AEHK1408C ( APPLICANT ) ( RESPONDENT ) APPLICANT BY : SHRI B.K. ANAND CA. RESPONDENT BY: SHRI R.S. NEGI SR. DR O R D E R PER R.P. TOLANI, J.M : THIS IS ASSESSEES MISC. APPLICATION U/S 254(2) OF THE I.T. ACT, 1961, PRAYING FOR RECALLING OF ITAT ORDER DATED 22-12-201 0 PASSED IN THE ABOVE CAPTIONED APPEAL. 2. IT IS CONTEND THAT RATIO OF DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. A.R.J. SECURITIES PRINTERS 264 ITR 276, HAS NOT BEEN CONSIDERED BY THE ITAT IN ITS ORDER DATED 22-12-201 0, THOUGH IT WAS CITED. IT IS CONTENDED THAT THOUGH PRINCIPLE OF RES-JUDICATA DOES NOT APPLY TO INCOME- TAX PROCEEDINGS, NEVERTHELESS CONSISTENCY SHOULD BE MAINTAINED IN THE ABSENCE OF ANY FRESH FACTS IN SUBSEQUENT YEARS. LEA RNED COUNSEL CONTENDS THAT THIS IS MISTAKE APPARENT FROM RECORD. RELIANCE IS PLACED ON THE RATIO OF 2 DECISION OF HONBLE SUPREME COURT IN THE CASE OF AC IT VS. SAURASHTRA KUTCH STOCK EXCHANGE LTD. (2008) 305 ITR 227 FOR TH IS PROPOSITION. 3. LEARNED DR ON THE OTHER HAND VEHEMENTLY ARGUES T HAT THE ITAT HAS CONSIDERED ALL ASPECTS OF THE MATTER INCLUDING THE ASPECT OF CONSISTENCY IN PARAS 6 & 7 OF ITS ORDER. LEARNED COUNSEL HAS NOT D ISPUTED THE FACT THAT HE WAS UNABLE TO GIVE ANY SATISFACTORY REPLY DURING HE COURSE OF HEARING BEFORE THE ITAT ABOUT THE TREATMENT OF HOUSE-PROPERTY INC OME AS BUSINESS INCOME. SPECIFIC QUERY WAS RAISED BY THE BENCH, LEARNED COU NSEL WITHOUT GIVING ANY EXPLANATION MERELY STATED THAT THE SAID INCOME BE TREATED AS BUSINESS INCOME ON THE BASIS OF CONSISTENCY. WHEN THE LEARNE D COUNSEL WAS UNABLE TO GIVE ANY REPLY ABOUT ADOPTING OF HEAD OF INCOME AS BUSINESS INCOME, IT CANNOT BE SAID THAT ITAT DID NOT ADVERT TO CASE LA W. THERE IS NO MISTAKE IN THE ORDER OF ITAT AS BEING POINTED OUT BY THE LEARN ED COUNSEL, WHICH AMOUNTS TO REVIEW OF ORDER. FURTHER, ITAT HAS CLEAR LY HELD IN PARA 7 AS UNDER: WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. WE HAVE SEEN THE PROFIT AND LO SS ACCOUNT OF THE ASSESSEE EXCEPT RENTAL INCOME FROM TGI RESTAURA NT, ASSESSEE HAS NO OTHER MAJOR INCOME. THERE IS NO EVIDENCE OF BUSINESS OF LETTING PROPERTIES EXCEPT LETTING UP ONE TENANTED P ROPERTY, WHICH CAN NEVER BE CALLED A BUSINESS OF THE ASSESSEE. LD. COUNSEL FOR THE ASSESSEE ONLY CONTENDS THAT IT IS THE OLD BUSIN ESS OF THE ASSESSEE AND THE INCOME AHS BEEN TAXED AS BUSINESS INCOME ON THE RULE OF CONSISTENCY. IN OUR VIEW THE ASSESSMENT AHS BEEN FRAMED AGAINST THE EXPRESS PROVISIONS OF LAW, WE AR E SURPRISED TO SEE THE WAY THIS ASSESSMENT AHS BEEN FRAMED. PRI NCIPLES OF RES-JUDICATA DO NO APPLY TO INCOME TAX PROCEEDINGS. FURTHER A PATENT MISTAKE OF LAW CANNOT BE REGULARIZED OR ALLO WED IN THE PRETEXT OF CONSISTENCY. IT IS THE DUTY OF THE ITAT TO ENSURE THAT A FAIR AND PROPER ASSESSMENT IS FRAMED IN ACCORDAN CE WITH LAW. 3 THE ASSESSEE HAS EARNED NO INCOME EXCEPT BY WAY OF RENT TERMED AS LICENSE FEE BY LETTING UP THIS TENANTED P ROPERTY. THE LICENSE FEE IS NOTHING BUT THE RENT RECEIVED FROM L ETTING OUT FO IMMOVABLE PROPERTY HELD BY THE ASSESSEE AS TENANT SITUATE AT CONNAUGHT PLACE AS MENTIONED ABOVE. THE RENTAL INCO ME BY WHATEVER NAME CALLED IS TO BE ASSESSED AS INCOME FR OM HOUSE PROPERTY AND CANNOT BE ASSESSED UNDER THE HEAD INC OME FROM BUSINESS. 3.1. ITAT HAS CONSIDERED ALL THE ASPECTS OF THE MAT TER. INABILITY OF LEARNED COUNSEL TO GIVE ANY JUSTIFICATION AND ITAT HAVING D EALT WITH THE ASPECT OF CONSISTENCY, THERE IS NO MISTAKE IN THE ORDER OF TH E TRIBUNAL IN TERMS OF SEC. 254(2). THE APPLICATION AMOUNTS TO REVIEW OF THE OR DER, WHICH IS NOT PERMISSIBLE, HENCE LIABLE TO BE REJECTED. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H THE RELEVANT MATERIAL AVAILABLE ON RECORD. ITAT HAS PASSED A VER Y SPEAKING ORDER. AT THE TIME OF HEARING OF THE APPEAL, SPECIFIC QUERY WAS R AISED BY THE BENCH FROM ASSESSEES COUNSEL, AS TO HOW HOUSE PROPERTY INCOM E HAS BEEN TREATED AS BUSINESS INCOME BY ASSESSEE. LEARNED COUNSEL FAILED TO GIVE ANY FACTUAL EXPLANATION AND PLEADED ONLY ON THE BASIS OF CONSIS TENCY. IF THE ASSESSEES COUNSEL IS UNABLE TO EXPLAIN THE FACTS AND THE JUST IFICATION OF A CLAIM, IT CANNOT BE HELD THAT ASSESSEES CASE SHALL BE ALLOWE D WITHOUT LOOKING FACTS AND ON THE BASIS OF CONSISTENCY IGNORING MATERIAL F ACTS. IN THE CASE OF A.R.J. SECURITIES PRINTERS (SUPRA), THERE WAS AN ISSUE ABO UT CLAIM OF DEDUCTION U/S 80-I AND NOT ABOUT HEAD OF INCOME WHICH WAS DULY EX PLAINED BY THE ASSESSEE. THE APPLICABILITY OF PRINCIPLE OF CONSIS TENCY WILL DEPEND UPON THE ISSUE IN QUESTION AND THE PLEADINGS WHICH ASSESSEE S COUNSEL ADVANCES BEFORE THE COURT. IN THE ABSENCE OF ANY MATERIAL AR GUMENT, IT CANNOT BE HELD, AS BEING PROPOSED BY LEARNED COUNSEL, THAT THERE WA S A MISTAKE APPARENT 4 FROM THE RECORD. THE APPLICATION AMOUNTS TO REVIEW OF THE TRIBUNALS ORDER, WHICH IS NOT PERMISSIBLE U/S 254(2). ACCORDINGLY, P RESENT APPLICATION MOVED BY THE ASSESSEE IS LIABLE TO BE REJECTED. 5. IN THE RESULT, MISCELLANEOUS APPLICATION IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON 12-08-2011. SD/- SD/- ( B.C. MEENA ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 12-08-2011. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR