M/S. SHRINATH WAREHOUSING CO.,PUNE vs. DEPUTY COMMISSIONER OF WEALTH-TAX,

आदेश / ORDER

PER VIKAS AWASTHY, JM

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-7, Pune dated 09.02.2016 for the assessment year 2011-12.

2 ITA No.1387/PUN/2016 A.Y.2011-12

notice through RPAD. A perusal of the case file shows that the appeal

was first listed for hearing on 17.04.2018. Notice of hearing of appeal

was sent to the assessee through RPAD on 28.02.2018. Since the Bench

did not function on 17.04.2018, the appeal was adjourned to

21.06.2018. On 21.06.2018, none appeared on behalf of the assessee.

Fresh notice of hearing of appeal was sent to the assessee for

21.08.2018. On 21.08.2018, the appeal was adjourned to 30.10.2018.

Despite notice, again none appeared to represent the assessee today. It

appears that the assessee is not keen to pursue his appeal before the

Tribunal. In such circumstances, we are constrained to take up the

appeal for hearing in ex-parte proceedings qua assessee/appellant, with

the assistance of ld. DR and the material available on record.

Commissioner of Income Tax (Appeals) in holding the income earned by

the assessee from renting of warehouse under the head “Income from

House Property” as against the said income declared by assessee under

the head “Business Income”.

assessee is a partnership firm and owns number of warehouses. The

assessee rented part of warehouses to various individuals and entities.

During the period relevant to assessment year under appeal, the

assessee received Rs.1,68,07,517/- as rental income from letting out of

the warehouse. The assessee offered the said income after claiming

expenditure under the head “Business Income”. The Assessing Officer

3 ITA No.1387/PUN/2016 A.Y.2011-12

did not concur with the view of assessee and held the income received

by assessee from letting out of warehouse as “Income from House

Property” and made addition of Rs.43,99,964/- after allowing statutory

deduction.

u/s.143(3) of the Income Tax Act, 1961 ( hereinafter referred to as ‘the

Act’), the assessee filed appeal before the Commissioner of Income Tax

(Appeals). The Commissioner of Income Tax (Appeals) after placing

reliance on the various decisions confirmed the findings of Assessing

Officer and dismissed the appeal of assessee.

supported the order of Commissioner of Income Tax (Appeals). The ld.

DR submitted that rental income received by assessee from letting out of

warehouse has rightly been assessed under the head “Income from

House Property” by the Authorities below.

perused the orders of Authorities below. The solitary issue raised in

ground Nos. 1, 2 and 3 of the appeal is against holding rental income

from letting out of warehouses by assessee under the head “Income from

House Property” as against “Business Income” declared by the assessee.

On the facts of the case as narrated above, the Commissioner of Income

Tax (Appeals) has confirmed the findings of Assessing Officer by

observing as under:

4 ITA No.1387/PUN/2016 A.Y.2011-12

“6.6. I have carefully considered the facts of the case and law apparent from the records. There is no change in the facts of the case from A.Y.2000-01 to A.Y.2010-11 and activity of the appellant remained same i.e. letting out of the godowns. The CIT(A)-II in A.Y.2003-04, 2005-06, 2006-07 and 2007-08 has held that rent received from godowns are to be assessed as income from house property. The contention of the appellant is that appellant has constructed a warehouse as a commercial complex and conducted continuous commercial systematic business activity by providing more than 100 no. of occupants in warehouse on specific terms. The appellant is providing space to tenants and not doing any business activity as such and the case of the appellant is similar to case of Keyaram Hotels (P.) Ltd (Supra) wherein it has been held that letting out of the commercial complex would be assessed as income from house property and not as business income. The decision of the jurisdictional High Court in case of Parekh Traders Vs. CIT (1984) 150 ITR 310 (Bom.) & Maharashtra Fertilizers & Chemicals vs. CIT (1984) 150 ITR 317 (Bom) makes it clear that letting out of the godowns will be income from house property. The Supreme Court in case of East India Housing & Land Development Trust Ltd Vs. CIT (1961) 42 ITR 49 (SC) further, clarifies that income from letting out of godowns will be income from house property. The appellant is also providing services like security guard, electricity in common areas, maintenance of internal road and maintenance of parking facilities etc. On this issue Madras High Court in case of A. R. Complex (Supra) has held that letting of the commercial complex would be income from house property and in respect of services held that authorities should bifurcate receipts which also included service charges and quantified portion of receipts for rendering services and such apportioned amount should be assessed under head 'Income from business' or 'Income from other sources'. 6.7 in view of the above, income from letting out of godowns has to be assessed as income from house property. The income from services provided has to be assessed as income from business or income from other sources. Therefore, Ground No.1 to 4 of the appeal is dismissed.

There is no material available on record contrary to the findings of

Commissioner of Income Tax (Appeals). Therefore, we do not find any

reason to interfere with the impugned order. Accordingly, the grounds

Nos.1 to 3 of the appeal are dismissed.

are general in nature, hence, requires no adjudication.

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In the result, appeal of the assessee is dismissed. 9.

Order pronounced in the open Court after hearing of the appeal on the 30th day of October, 2018.

Sd/- Sd/- R. S. SYAL VIKAS AWASTHY VICE-PRESIDENT JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 30th October, 2018 SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :

अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeals)-7, Pune. 4. The CIT-6, Pune. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “बी” ब�च, 5. पुणे / DR, ITAT, “B” Bench, Pune. गाड� फ़ाइल / Guard File. 6.

// True Copy // आदेशानुसार / BY ORDER,

�नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.