ACIT 12(1), MUMBAI vs. SANE & DOSHI ENTERPRISES, MUMBAI

O R D E R PER MAHAVIR SINGH, JM:

This appeal by Revenue arising out of the order of the CIT (A)-23, Mumbai in appeal No. CIT (A)-23/ACIT-12(1)/IT-497/2012-13 dated 07-08-2013. The Assessment was framed by the ACIT circle 12(1), Mumbai for assessment year 2010-11 vide his order dated 31-12-2012 u/s 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’).

2. The only issue in this appeal of Revenue is against the order of CIT (A) directing the AO to treat the rental income received by assessee on letting out of unsold housing stock as income from house property instead of business income treated by AO. For this Revenue has raised following two grounds:-

1. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) was justified in treating the rental income of Rs.3,97,80,791/received on letting out the unsold stock as “income from house property instead of “business „income.”

Towers, which the assessee has finished the construction in assessment year 2002-03. The assessee claimed the following income from house property following:-

“Rental Income: 3,97,80,791 Less Municipal Taxes 16,81,679 Less 30 % of SD 1,14,29,734 Income from house property 2,66,69,378 The assessing officer treated this rental income under the head business income as against declared by assessee as income from house property. Aggrieved, assessee preferred appeal before CIT (A), who deleted the addition by following earlier years decision in assessss’s own case by observing in Para 2.3 & 2.3.1 as under:- “ 2.3 l have considered the faCtS of the cage and the submissions made by the assessee. l have also perused the order of the Ld.CIT(A)„ in the case of the assessee for the A.Y. 2009-10 in Appeal No.CIT(A)-23/ACIT-12(1)IT- 266/2011-12 dated 03/07/2012. I find that an identical facts, Ld. CIT(A) in her order has held as follows : “ 3.3. The Assessing Officer's order, submissions made for the appellant and materials on record have been considered. The ITAT Mumbai in the appellant‟s own case for A.Y.05-06 (in 2006) has in its order dated 20/ 10/2009 followed its own order in the same assessee‟s case in earlier years. Similar issue has come up in the assessment year 2000-01 ITA No.6449/Mum/2006 “E” Bench order dated 11/12/2008 and also by another decision of the 'Mumbai “E1” Bench in ITA No.5232 to 5234/Mum/2007 for the assessment years 2002~03 to 2004-05 order dated .26/2/ 2009 wherein it has been held that the rental income in question can only be considered to be in “income from house property” and followed the bench discussions for the earlier years and reiterated the same decision. The Hon‟ble High Court has dismissed the department‟s appeals holding that the appeals were delayed and that the high Court has no power to condone the delay. Respectfully following the decisions of the ITAT (supra), the Assessing Officer is directed to treat the rental income as “Income from house property. 2.3.1 Issue and facts in the present appeal being identical to the issue and facts in the appeal for the A.Y. 2009-10, respectfully following the order of the Hon‟ble ITAT in the assessee‟s own case for the A.Yrs. upto the A.Y. 2008- 09 and the order of the Ld. CIT(A) for the A.Y. 2009-10, I hold that the rental income of Rs.3,97,80,791/- is to be assessed under the head “Income from House Property” and not under the head “Income from Business and Profession” and deduction u/s 24(a) of the LT. Act, 1961. be allowed from such rental income. Accordingly, the grounds of appeal filed by the assessee are allowed.”

Aggrieved, Revenue is in second appeal before Tribunal.

42. We do not think that any larger question or wider controversy needs to be determined. If the matter was approached in this angle by the Commissioner and in the same factual backdrop, then, there is no justification for taking a contrary view. If two conflicting views of the Commissioner were placed before the Tribunal and the Tribunal found that it had concurred with one of those views and that the view with which it concurred prevails, then, we do not think how the Revenue can raise this issue. The issue has been considered bearing in mind the typical factual background. If the entire interest paid on the partners ‟capital was related to the premises which were let out by the assessee but the construction there of came from the contributions of the partners, then, the interest was due and payable to them. That interest was payable not only in terms of the general principal of partnership and highlighted in the Indian Partnership Act, 1932, but also on the broad consideration u/s 24(b) of the Income Tax Act, 1961. If the income is income from house property and that is a deduction which could be granted from the same we do not think that the Revenue should be permitted t raise this ground. Even otherwise, the finding being consistent with the actual position which is not disputed, then all the more even this ground cannot be considered as a substantial question of law. We do not think any reference is required to the detailed written submissions or the case laws in this regard.

When this was confronted to the learned Senior DR, he fairly conceded the position. In view of the above facts and respectfully following Hon’ble Bombay High Court, we confirm the order of CIT (A). The appeal of Revenue is dismissed.

Order pronounced in the open court on 02 -11-2016.

Sd/ Sd/ (DK RAO) (MAHAVIR SINGH) (ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 02 -11-2016 Sudip Sarkar/Sr.PS