AVIJIT MOITRA,MUMBAI vs. D.C.I.T. CIR. 34(1), MUMBAI

These are two appeals relating to the same assessee pertaining to the assessment year 2010–11. While Revenue’s appeal is against the order dated 12th April 2017, passed by the learned Commissioner of Income Tax (Appeals)–2, Mumbai, the appeal filed by the assessee arises out of the order passed by the learned Commissioner of Income Tax under section 263 of the Income-tax Act, 1961 (for short "the Act").

./2017 Revenue’s Appeal

3 Amazia Developers Pvt. Ltd.

i) Interest expenditure should have been disallowed due to non–deduction of tax at source; ii) Income of ` 76,00,850, on account of difference in total income as per Profit & Loss account and computation of income was not assessed to tax;

4 Amazia Developers Pvt. Ltd. iii) Rental income was assessed as business income instead of income from house property thereby resulting in allowance of various expenses.

Thus, on the aforesaid basis, learned CIT ultimately held the assessment order to be erroneous and prejudicial to the interests of Revenue and set it aside with a direction to the Assessing Officer to frame a fresh assessment order in accordance with his observations. In pursuance to the direction of learned CIT, the Assessing Officer framed a fresh assessment, wherein, he treated the lease rental income received by the assessee as income from house property.

infrastructure facility for claiming deduction under section 80IA(4) of the Act at the hands of the earlier owner and the said benefit was not passed on to the assessee. He further observed, the assessee had been consistently offering the lease rental income received from the IT park as income from business and the Department has accepted the claim of the assessee in assessments completed under section 143(3) of the Act. He further observed, while deciding the issue in assessment year 2012–13, he has accepted assessee’s claim of lease rental income as business income. Thus, following his own order for the assessment year 2012–13, he held that the lease rental income received by the assessee should be treated as income from business.

taxability of lease rental income as income from house property. He submitted, while completing the assessment for the assessment year 2012–13, the Assessing Officer had initially treated the lease rental income as income from other sources. However, while deciding assessee’s appeal on the issue, learned Commissioner (Appeals) accepted assessee’s claim of lease rental income as business income. He submitted, the aforesaid decision of learned Commissioner (Appeals) was accepted by the Department. He submitted, when learned CIT revised the assessment order for the assessment year 2012–13 raising identical issue of treating the lease rental income as income from house property, the Tribunal while deciding assessee’s appeal in ITA no.2499/Mum./2017, dated 8th May 2019, has quashed the revision order passed under section 263 of the Act by accepting assessee’s claim that income from lease rental is to be treated as business income. He submitted, since in all other assessment years assessee’s claim of business income has been accepted by the Department, applying the rule of consistency, in the impugned assessment year also the lease rental income has to be assessed as income from business. In support of such contention, he relied upon the decision of the Tribunal in DCIT v/s E–city Project Construction Pvt. Ltd., ITA no.8390/Mum./2010 & Ors., dated 30th July 2014. He submitted, the aforesaid decision of the Tribunal holding that rule of 7 Amazia Developers Pvt. Ltd. consistency should be applied was approved by the Hon'ble Jurisdictional High Court while dismissing Department’s appeal in & Ors., vide judgment dated 18th July 2017. Without prejudice to the aforesaid submissions, the learned Authorised Representative submitted, even CBDT, vide Circular no.16 of 2017, dated 25th April 2017, has held that income from industrial Park/SEZ established under various schemes framed and notified under section 80IA(4)(iii) of the Act is liable to be treated as income from business. Thus, he submitted, there is no reason to interfere with the decision of learned Commissioner (Appeals).

character of business income. This fact has been clarified by the CBDT, vide Circular no.16 of 2017, dated 25th April 2017. Even, otherwise also, facts on record reveal that the assessee is consistently claiming the lease rental income from IT park as income from business. The aforesaid claim of the assessee was accepted by the Assessing Officer in the assessments completed under section 143(3) of the Act in the assessment years 2009–10 and 2011–12. Even, in the original assessment completed under section 143(3) of the Act for the impugned assessment year also, the Assessing Officer had accepted assessee’s claim. Notably, while completing the assessment under section 143(3) of the Act for the assessment year 2012–13, the Assessing Officer treated the income from lease rental as income from other sources. However, while deciding assessee’s appeal for the said assessment year, learned Commissioner (Appeals) accepted assessee’s claim of lease rental income as business income. It is also evident, the aforesaid decision of learned Commissioner (Appeals) has been accepted by the Department. More importantly, the assessment order passed under section 143(3) of the Act for Assessment Year 2012-13 was revised under by the learned CIT on identical reasoning on the basis of which he passed the order under section 263 of the Act for the impugned assessment year. However, while deciding assessee’s appeal in the order referred to above, the Tribunal quashed the order passed

9 Amazia Developers Pvt. Ltd. under section 263 of the Act and accepted assessee’s claim of lease rental as business income. Thus, applying the rule of consistency also, assessee’s claim of lease rental as income from business and profession has to be accepted. In view of the aforesaid, we do not find any infirmity in the order of learned Commissioner (Appeals) on the issue. This ground is dismissed.

10 Amazia Developers Pvt. Ltd. omitted to claim interest expenditure, though, it was incurred in the year under consideration. Therefore, he filed a computation before the Assessing Officer to rectify the mistake and allow the expenditure. However, the Assessing Officer did not allow assessee’s claim on the ground that the interest expenditure was not claimed in the return of income filed under section 139(1) of the Act. Learned Commissioner (Appeals) observed, in the order passed under section 154 of the Act, the Assessing Officer has not any dispute regarding allowability of interest expenditure to the assessee. He further found that for rectifying the said mistake, the assessee also filed a revised return of income under section 139(5) of the Act, which has not been taken cognizance by the Assessing Officer. Thus, he held that the disallowance made by the Assessing Officer purely on technical reason is not sustainable. Accordingly he allowed assessee’s claim.

ground raised by the Department is not maintainable. Without prejudice, the learned Authorised Representative submitted, assessee’s claim being borne out from record and as per revised return of income, could not have been disallowed merely on technical reason that the assessee had not claimed it in the return of income filed under section 139(1) of the Act. Thus, he submitted, this ground should be dismissed.

aggrieved with the decision of learned Commissioner (Appeals) in respect of both the appeals filed by the assessee, it should have filed two separate appeals, as the issue arising out of two separate proceedings cannot be clubbed in a single appeal. For this reason alone, ground no.2 raised by the Revenue deserves to be dismissed, as, the present appeal is to be treated as originating from the assessment order passed under section 143(3) r/w section 263 of the Act. Accordingly, ground no.2 is dismissed.

This appeal by the assessee is against order dated 26th March 17. 2015, passed by the learned Commissioner of Income Tax–1, Mumbai, under section 263 of the Act for the assessment year 2010–11.

13 Amazia Developers Pvt. Ltd. section 263 of the Act, the Assessing Officer has treated the lease rental income received by the assessee as income from house property as against assessee’s claim of business income. Notably, while deciding assessee’s appeal against the assessment order passed under section 143(3) r/w section 263 of the Act, learned Commissioner (Appeals) has allowed assessee’s claim of lease rental income being treated as business income. The aforesaid decision of learned Commissioner (Appeals) has also been upheld by us while deciding Revenue’s appeal in ITA no.5348/Mum./2017, in the earlier part of the order. That being the case, the present appeal is of mere academic importance. Further, there is delay of 678 days in filing the appeal. Of course, the assessee has filed an application supported by an affidavit seeking condonation of delay. However, considering the fact that this appeal has become academic in view of our decision in Revenue’s appeal being ITA no.5348/Mum./2017, we do not find the necessity to deal with the issue of condonation of delay and the merits of the appeal. For the aforesaid reason the appeal is dismissed.