BOMBAY GAS COMPANY LTD,MUMBAI vs. DCIT 1(1), MUMBAI

The only issue in dispute arising in the present appeal is with regard to the decision of the Departmental Authorities in assessing the income received from rent, compensation and service charges as 2 M/s. Bombay Gas Company Ltd. income from house property instead of income from business and profession.

Brief facts are, the assessee, a company, is engaged in the business of gas distribution in certain areas of Greater Bombay through its network of underground pipe line. It also derives income from sub letting rented premises as well as finance and investment activity. For the assessment year under dispute, assessee filed its return of income on 13th October 2010, declaring total income of ` 1,67,38,874. During the assessment proceedings, the Assessing Officer noticed that the income received by the assessee from rent, compensation and service charges of premises let out was shown under the head income from business and profession. The Assessing Officer noticed that in the preceding assessment year such income received by the assessee was treated as income from house property by the Assessing Officer. He also noted that in the assessment year 2003–04, the Tribunal has approved the aforesaid view of the Assessing Officer. Thus, following the decision on the issue in the earlier assessment years, the Assessing Officer treated the income received from rent, compensation and service charges amounting to ` 2,22,00,612 as income from house property. After allowing statutory deduction he added back an amount of ` 1,55,40,429. Though, the assessee challenged the aforesaid addition before the learned

The learned Authorised Representative admitting the fact that in assessment years 2003–04, 2004–05 and 2007–08, the issue has been decided against the assessee by the Tribunal and assessee’s appeals are pending before the Hon'ble Jurisdictional High Court, submitted that assessee is not the owner of the premises which were sub tenanted or let out. He submitted, the City Civil Court vide its order dated 12th October 2012, has held that the assessee is a monthly tenant of the premises let out by it to others. He submitted, in view of such finding of the City Civil Court it cannot be said that the provisions of section 27(iiib) r/w 269UA(f) of the Act are applicable to the assessee. The learned Authorised Representative submitted, though, the order of the City Civil Court and certain other evidences were produced before the learned Commissioner (Appeals) to impress upon the fact that in view of such evidences the decision of the Tribunal in assessment year 2003–04 may not be applicable, however, the learned Commissioner (Appeals) completely ignored the evidences produced by the assessee. The learned Authorised Representative submitted, while deciding identical dispute arising in assessee’s own case for assessment year 2008–09 and 2009–10, though, the Tribunal

The learned Departmental Representative submitted that the issue may be restored to the Assessing Officer for fresh adjudication keeping in view the directions of the Tribunal for assessment year 2008–09 and 2009–10.

We have considered rival submissions and perused materials on record. It is evident from facts on record that the issue whether the rent, commission and service charges received from sub–letting the premises is a recurring dispute between the parties from the past years. It is also a fact on record that in assessee’s own case for 5 M/s. Bombay Gas Company Ltd. assessment year 2003–04, 2004–05 and 2007–08, the Tribunal has decided this particular issue in favour of the department, against which the assessee has preferred appeals before the Hon'ble Jurisdictional High Court which are still pending. However, when identical dispute came up for consideration before the Tribunal in assessee’s own case for assessment year 2008–09 and 2009–10 in ITA no.6212/Mum./ 2011 and others dated 7th March 2018, the Tribunal after taking cognizance of the orders of the City Civil Court, the Hon'ble Jurisdictional High Court and Estate Officer filed by way of additional evidence, restored the issue to the Assessing Officer for fresh adjudication keeping in view the additional evidences filed by the assessee. In the impugned assessment year also in course of hearing before the learned Commissioner (Appeals) the assessee had submitted similar additional evidences for consideration of the learned Commissioner (Appeals) and to impress upon the fact that by virtue of these additional evidences holding the assessee as a monthly tenant, the decision of the Tribunal in earlier assessment years cannot be followed. It is apparent on record, learned Commissioner (Appeals) has totally ignored such evidences filed by the assessee. Therefore, keeping in view the decision of the Tribunal in assessee’s own case for assessment year 2008–09 and 2009–10 as referred to above, we restore the issue to the file of the Assessing Officer for de novo adjudication after due opportunity of being heard to the assessee. It is 6 M/s. Bombay Gas Company Ltd. made clear, the Assessing Officer must consider all the evidences including the orders of the City Civil Court, the Hon'ble Jurisdictional High Court and the Estate Officer on merit and decide the issue accordingly. Grounds are allowed for statistical purposes.

In the result, assessee’s appeal is allowed for statistical purposes. Order pronounced in the open Court on 29.08.2018