ASSISTANT COMMISSIONER OF INCOME TAX-1(1)(1), MUMBAI vs. AMAZIA DEVELOPERS PVT LTD, MUMBAI

Aforesaid appeals by revenue for Assessment Years [AY in short] 2009-10 & 2011-12 contest separate orders of learned first appellate authority. However, the facts as well as issues are identical in both the appeals. Therefore, the appeals were heard together and are now being disposed-off by way of this common order for the sake of convenience & brevity. First, we take up appeal for AY 2009-10 wherein following ground has been raised by the revenue: - Whether on the facts and the circumstances of the case and law, the ld. CIT(A) was right in treating assessee’s leased rental income as Business Income instead of Income from House Property ?

The Ld. AR advanced argument in support of impugned order by drawing attention to the orders of Tribunal in earlier years whereas Ld. DR justified the action of Ld. AO. We have carefully heard the rival submissions and perused relevant material on record. Our adjudication to the subject matter of appeal would be as given in succeeding paragraphs. 3.1 An assessment was framed against the assessee u/s 143(3) r.w.s. 147 on 23/12/2016. The assessee is a resident corporate assessee and stated to be engaged as a property developer. The original assessment for the year was already completed u/s 143(3) on 29/12/2011 accepting revised returned loss of Rs.704.56 Lacs. 3.2 However, the case was reopened due to assessment order for AY 2010-11 passed u/s 143(3) r.w.s. 263 wherein a view was taken that the leased rental income was to be assessed as ‘Income from House Property’. To adopt the same view in this year, the case was reopened for this year as per due process of law.

We find that the whole basis of reopening the case for the year is the fact that an assessment was framed for AY 2010-11 u/s 143(3) r.w.s. 263 of the Act wherein a view was taken that the leased rental income was to be assessed as ‘Income from House Property’. To adopt the same view, the case was reopened. We find that the appeals for AY 2010-11 was subject matter of adjudication before this Tribunal vide & 5348/Mum/2017 common order dated 04/09/2019, the copy of which is on record. As it could be seen from the said order, the returned loss filed by the assessee was accepted u/s 143(3). However, consequent to revisional order passed u/s 263, the Ld. AO assessed the rental income as ‘Income from House Property’ in an order passed u/s 143(3) r.w.s.

However, upon further appeal, Ld. CIT(A), following his own order for AY 2012-13, held that income should be treated as ‘Business Income’. The revenue preferred further appeal against the same before this Tribunal wherein the bench, vide para-9 of the order, dismissed revenue’s appeal for the reasons stated therein. One of the reasons was application of rule of consistency. Consequently, the assessee’s appeal assailing the invocation of jurisdiction u/s 263 was not adjudicated. Proceeding further, we find that in AY 2012-13 also, while framing assessment u/s 143(3), the rental income was assessed as ‘Income from other sources’. However, learned first appellate authority, vide order dated 20/04/2016, reversed the stand of Ld. AO and held that income was to be assessed as business income. No further appeal was preferred by the department against the said order. Subsequently, a revision order was passed u/s 263 on 27/03/2017 which was subject matter of challenge by the assessee before this Tribunal vide ITA No.2499/Mum/2017 order dated 08/05/2019. The bench noted that since the order of Ld. AO already stood merged with appellate order, subsequent order passed u/s 263 would not be valid and accordingly, quashed the revision.

On the basis of above orders, it could be seen that the issue on merits in AY 2010-11 stood covered in assessee’s favor wherein the rental income has finally been accepted as ‘Business Income’. The issue in AY 2012-13 has also attained finality since no appeal was preferred by the department against appellate order for that year. The revisional order passed u/s 263 has already been quashed by the Tribunal. For the stated reasons, no infirmity could be found in the impugned order. Therefore, revenue’s appeal stand dismissed.

Facts are pari-materia the same in AY 2011-12. The assessee was reassessed u/s 143(3) r.w.s. 147 on 14/11/2017 on similar lines as in AY 2009-10. The Ld. CIT(A) allowed assessee’s appeal on similar lines and directed Ld. AO to assess the rental income as ‘Business Income’. Aggrieved, the revenue is in further appeal before us. Since the fact as well as issue is pari-materia the same as in AY 2009- 10, our findings as well as adjudication as contained in therein shall mutatis-mutandis apply to this year also. Resultantly, the appeal stand dismissed.

Both the appeals stands dismissed.