DCIT, CIR-7(2), KOLKATA, KOLKATA vs. M/S RBA PROPERTIES LTD., KOLKATA

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ITA 598/KOL/2015Status: DisposedITAT Kolkata22 September 2017AY 2011-20123 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the principle of consistency must be observed as the facts and law remained unchanged from earlier assessment years. The CIT(A)'s direction to treat the receipts under 'Income from House Property' was upheld.

What were the facts?

The assessee, engaged in property letting, had its income classified as 'Business Income' in earlier years. Following a CIT(A) order and subsequent Tribunal dismissal of the assessee's appeal, income was assessed under 'Income from House Property'. However, for AY 2011-12, the AO classified certain receipts as 'Income from Other Sources'.

What were the issues?

Whether receipts from property letting, including business arrangement fees and miscellaneous receipts, should be classified under 'Income from House Property' or 'Income from Other Sources', adhering to the principle of consistency.

Which sections of the Income-tax Act were involved?

Section 263

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Income Tax Appellate Tribunal, “B” BENCH: KOLKATA

Hearing: 04.07.2017Pronounced: 22.09.2017

ORDER Per Shri A.T.Varkey, JM

This is an appeal preferred by the revenue against the order of Ld. CIT(A)-3, Kolkata dated 04.03.2015 for AY 2011-12. 2. The main grievance of the revenue is against the order of Ld. CIT(A) directing the AO to compute the business arrangement fee, miscellaneous receipts and other income derived from property under the head “Income from House Property.”

3.

Brief facts of the case are that the assessee is engaged in the activity of letting out of property for a number of years. In the earlier assessment years, the head under which various receipts relating to property were claimed by the assessee as ‘Business Income’, which was accepted by the AO for AY 2005-06. The Ld. CIT exercising his jurisdiction u/s. 263 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) directed the AO to treat the receipts under the head “Income from house property”. The assessee challenged the order of CIT passed u/s. 263 of the Act before the Tribunal and the Tribunal was pleased to dismiss the appeal of the assessee. Thereafter, AY 2005-06 onwards, the AO pursuant to the order of the CIT passed u/s. 263 of the Act assessed the income under the head “Income

2 M/s. RBA Properties Ltd., AY 2011-12 from house property”. Thereafter, all the receipts from the letting out of property were assessed under the head “Income from house property”. Departure from this happened in AY 2009-10, wherein the AO treated the said income from amenities provided to the tenants and facilities such as furniture, air-conditioner and other amenities under the head “Income from other sources” which was challenged by the assessee before the Ld. CIT(A), who was pleased to direct the AO to treat the entire receipt on account of utilities, busness arrangements fee and miscellaneous receipt under the head “Income from house property” which order of Ld. CIT(A) was later upheld by the Tribunal vide order dated 26.08.2014. Meanwhile in this assessment year i.e. AY 2011-12, the AO has taken a view that certain receipts like business arrangement fee, miscellaneous receipts and other income derived from the property under the head “Income from other sources”. We note that the ld. CIT(A) has clearly taken note of the fact that from AY 2005-06 onwards, pursuant to the order of CIT passed u/s. 263 of the Act, the aforesaid entire receipts were taxed under the head “Income from house property”. Thereafter, the assessee claimed the income from house property. When the facts permeating throughout the earlier years are the same, and there is no change in law, principle of consistency has to be observed as held by the Hon’ble Supreme Court in the case of Radhasoami Satsang vs CIT (1992) 193 ITR 321 (SC). We note that the Ld. CIT(A) had given the direction to treat the receipts of the assessee taking into consideration the Tribunal’s order upholding his action for the year 2009-10, therefore, we do not find any infirmity in the order passed by the ld. CIT(A) and so, we confirm the same. The appeal of revenue is dismissed.

4.

In the result, the appeal of revenue is dismissed.

Order is pronounced in the open court on 22.09.2017 Sd/- Sd/- (Waseem Ahmed) (Aby. T. Varkey) Accountant Member Judicial Member

Dated :22nd September, 2017 Jd.(Sr.P.S.)

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