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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA, AM & SHRI RAM LAL NEGI, JM
सुनवाई क" तार"ख /Date of Hearing : 06/02/2018 घोषणा क" तार"ख /Date of Pronouncement : 12/04/2018 आदेश / O R D E R Per Shamim Yahya, Accountant Member,: This appeal by the Revenue is directed against the order of Ld. Commissioner of Income Tax (Appeals) -6, dated 19/11/2015 and pertains to Assessment Year 2011-12. 2. The grounds of appeal read as under:- i. The order of the CIT(A) is opposed to law and facts of the case. ii. On the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in holding the lease rental income received by the assessee “business income” as against ‘income 2 Strategic Capital Corporation from house property’ as held by the Assessing Officer, without appreciating that during the year the assessee had not carried out any business activity. iii. On the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in allowing expenses to the tune of `.1,36,41,059/- as against `.36,11,979/- allowed by the Assessing Officer, without appreciating that during the year the assessee has not carried out any business activity.
3. In this case the assessing officer noted the background of the case as follows. That during the course of assessment proceedings vide letter dated 28/01/2014, assessee was asked to explain as to why the rental income should not be assessed under the head house property and interest and other income under the head income from other sources as the assessee has not carried out any business activity during the year. In this regard, assessee vide letter dated 30/01/2014 has stated that the CIT(A) has deleted all the additions/disallowances made in the Assessment Year 2010-11 on similar issue, and the assessee has stated that the order of the CIT(A) for Assessment Year 2010-11 be flowed for this year also.
The Assessing Officer proceeded to decide the issue against the assessee and held as under:-
“It is worthwhile to mention here that from the year 2008 onwards the assessee company was not carrying out any business activity and the assessee is looking out new business activity as per its own admission. Therefore, the rental income has to be taxed under the head income from house property. Even though the CIT(A) has granted relief to the assessee, on this issue. However, the department has not accepted the said decision and further appeal was filed before the Hon. ITAT, Mumbai. On the fact and circumstances of the case reliance is placed on 3 Strategic Capital Corporation the following judicial decisions: i) Gujarat Ginning & Manufacturing Co. Ltd. v/s CIT 205 ITR 314 Baijnath Brijmohan & Sons P Ltd. v/s CIT (Bombay High Court 161 ii) ITR 234 CIT V/s Indian Warehousing Industries Ltd. 258 ITR 93 iii) In view of the above discussion, the rental income is assessed under the head house property and interest income and other income is assessed under the head incomer from other sources. Accordingly, the expenses allowable u/s 57(iii) is allowed against income from other sources. Penalty proceedings u/s 271(1)© rw sec. 274 of the IT Act is initiated separately.
Up on assessee's appeal learned CIT-A noted that the same issue was decided in favour of the assessee by the ITAT in earlier year. The learned CIT-A held as under:- “I have carefully considered the facts of the case and the submissions made by the Ld. Authorized Representative. I have also gone through the order of the Hon’ble ITAT and CIT(A) referred to above. Similar issue had come up for consideration before the Hon’ble ITAT and Ld. Commissioner of Income Tax (Appeals) in appellant’s own case for Assessment Year 2010- 11 and the same was decided in favour of the appellant by them. Respectfully, following the above decisions, the lease charges received by the appellant is liable to be assessed as business income and the expenditure claimed by the assessee is allowed.”
Against above order revenue is in appeal before us.
We have heard the learned departmental representative none appeared on behalf of the assessee despite notice. The learned Departmental representative submitted that though identical issue has been decided by the ITAT in assessee's own case in favour of the assessee he sought to distinguish the same by reference to the latest Apex Court decision in the case of Raj Dadarkar Associates vs ACIT 6455 to 6460 of 2017. 4 Strategic Capital Corporation 7. Up on careful consideration we note that this is the revenues appeal and CIT-A has decided the issue in favour of the assessee by referring to the ITAT order in assessee's own case. The said order of the ITAT has not been produced before us by the revenue. No distinguishing feature has been pointed out between the facts prevailing in the order decided by the ITAT and the present assessment year. In view of the absence of any submission in detail in this regard we are not in a position to examine the same on the touchstone of Hon’ble Apex Court decision referred here in above. 8. Moreover we find that in the present case the issue is not of treatment of income from house property as is the case in the Hon’ble Apex Court decision referred above. The case made out is a temporary lull in the business, which as noted above ITAT has decided in favour of the assessee in earlier year. In absence of any distinguishing feature in the facts of the case in the present assessment year, no infirmity can be said to be there in the order of the learned CIT-A which follows ITAT decision in assessee's own case.
Accordingly in the background of aforesaid discussion and precedent we do not find any infirmity in the order of learned CIT-A. Accordingly we uphold the same.
In the result, this appeal by the revenue stands dismissed.
Order pronounced in the open court on 12/04/2018 (Ram Lal Negi) (Shamim Yahya) "या"यक सद"य / Judicial Member लेखा सद"य / Accountant Member मुंबई Mumbai; "दनांक Dated : 12/04/2018 Shekhar. PS/"न.स.