DCIT 3 (1)(1), MUMBAI vs. BANZAI ESTATES PVT. LTD., MUMBAI

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ITA 7268/MUM/2018Status: DisposedITAT Mumbai05 February 2020AY 2012-134 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the CIT(A) followed a binding decision of the Tribunal for earlier assessment years, and the revenue failed to provide any contrary material or evidence of reversal by a higher forum, the CIT(A)'s order was correct.

What were the facts?

The assessee offered rental income from its property as 'Income from House Property'. The Assessing Officer (AO) sought to tax it under 'Income from Business', relying on earlier years' assessments. The CIT(A) directed the AO to treat it as 'Income from House Property', following a previous tribunal decision.

What were the issues?

Whether rental income from a property owned by the assessee should be taxed as 'Income from House Property' or 'Income from Business', especially when the assessee's business involves leasing properties.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI

Before: HON’BLE SHRI MAHAVIR SINGH, VP & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

For Appellant: Shri Rohit Golecha- Ld. AR
For Respondent: Ms. Kavita P. Kaushik-Ld.DR, Shri Rohit Golecha- Ld. AR

आयकरअपील सं./ (िनधा"रण वष" / Assessment Year: 2012-13) DCIT – 3(1)(1) M/s. Banzai Estates Pvt. Ltd. Room No. 607, 6th Floor, बनाम/ 49, Bajaj Bhavan Aaykar Bhavan, M.K. Road, Nariman Point Vs. Mumbai – 400 020. Mumbai – 400 021. "थायीलेखासं./जीआइआरसं./PAN/GIR No. AAACB-6915-C (अपीलाथ"/Appellant) (""थ" / Respondent) : Revenue by : Ms. Kavita P. Kaushik-Ld.DR Assessee by : Shri Rohit Golecha- Ld. AR सुनवाई की तारीख/ : 23/01/2020 Date of Hearing घोषणा की तारीख / : 05/02/2020 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by revenue for Assessment Year [in short referred to as ‘AY’] 2012-13 contest the order of Ld. Commissioner of Income- Tax (Appeals)-9, Mumbai, [in short referred to as ‘CIT(A)’], Appeal No. CIT(A)-9/Cir.4/TR-71/2015-16 dated 10/10/2018 on following grounds of appeal: -

1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was right in treating the rental income derived from the premises owned by 2 M/s. Banzai Estates Pvt. Ltd. Assessment Year :2012-13 the assessee in MBC Tower, Chennai as income assessable under the head “Income from House Property”, without appreciating that income earned from the said premises has been derived from exploitation of properties for commercial business activities which is in the nature of business income assessable under the “Income from Business” as per the ratio laid down by the Hon'ble Apex Court in the case of Shambhu Investments vs CIT in 263 ITR 143 (SC)?

2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was right in treating the rental income derived from letting out properties taken on lease from others as income assessable under the head “Income from House Property”, without appreciating that the assessee is following the business module of taking properties on rent and sub-letting the same after furnishing & providing entire gamut of facilities associated with such properties to various parties which is nothing but a business venture and is assessable under the head “Income from Business”?

3. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was right in treating the rental income derived from letting out properties (owned and taken on lease from others) as income assessable under the head “Income from House Property”, without appreciating that the rental income from the said properties was further advanced for purchase of another property instead of repaying the existing loan on said property which indicates the prudent business approach of the assessee?

4. The appellant prays that the order of CIT(A) on the above grounds be set aside and that of Assessing Officer be restored.

2.

The Learned Authorized Representative for assessee (AR), at the outset, submitted that Ld. CIT(A) has merely followed the decision of this Tribunal rendered in assessee’s own case for AYs 2008-09, 2009-10 and 2010-11, & ors., common order dated 31/05/2017 and therefore, the issue is squarely covered in assessee’s favor by earlier order of the Tribunal. The revenue could not place on record any material to establish that the said decision is not applicable to the factual matrix or the said decision has subsequently been reversed by any higher judicial forum, in any manner. 3.1 In the above background, we find that the assessee being resident corporate assessee stated to be engaged in hiring and leasing of properties was assessed for year under consideration u/s 143(3) on 3 M/s. Banzai Estates Pvt. Ltd. Assessment Year :2012-13 14/03/2015 wherein the loss was determined at Rs.456.71 Lacs as against returned loss of Rs.529.63 Lacs filed by the assessee on 27/09/2012. 3.2 During assessment proceedings, it transpired that the assessee earned rental income of Rs.304.86 Lacs from self-owned property situated at MBC Tower, TTK Road, Chennai and offered the same as Income from House Property. The Ld.AO, relying upon assessment of earlier years, chose to tax the same under the head Profit & Gains from Business / Profession. 3.3 The Ld. CIT(A), following the cited decision of this Tribunal in assessee’s own case for AYs 2008-09 to 2010-11 common order dated 31/05/2017, directed Ld. AO to assess the same under the head Income from House Property as offered by the assessee. Aggrieved the revenue is under further appeal before us. 4. As evident from above-stated factual matrix, the Ld. CIT(A) has merely followed the binding decision of this Tribunal for earlier years and therefore, no fault could be found in the same. The revenue is unable to establish that the said decision is not applicable to the given factual matrix or the said decision has subsequently been reversed by any higher judicial forum, in any manner. Therefore, respectfully following the consistent view of Tribunal, we dismiss the appeal.

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