DCIT CC 7(2), MUMBAI vs. SHREEJI EXHIBITORS, MUMBAI

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ITA 5511/MUM/2015Status: DisposedITAT Mumbai19 August 2016AY 2011-123 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision that the rental income derived from the shopping mall should be treated as business income, not income from house property. This was based on a previous decision in the assessee's own case for an earlier assessment year.

What were the facts?

The assessee, a partnership firm, constructed a commercial complex and leased out properties within it, including a multiplex. The Assessing Officer treated rental income as income from house property, while the assessee claimed it as business income.

What were the issues?

The primary issue was whether rental income from a commercial complex and multiplex should be taxed as income from house property or as business income.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “I”, MUMBAI

Before: SHRI G.S.PANNU & SHRI AMARJIT SINGH

For Appellant: Shri A.K.Kardam
For Respondent: Shri Shri V. Mohan
Hearing: 19/07/2016Pronounced: 19/08/2016

The captioned appeal filed by the Revenue pertaining to assessment year 2011-12 is directed against an order passed by CIT(A)- 49 Mumbai dated 09/09/2015, which in turn arises out of an order passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 (in short ‘the Act’) dated 14/03/2014.

2.

In this appeal, the only issue relates to the taxability of income received by the assessee from shopping mall. The respondent assessee is a partnership firm, which had constructed a commercial complex and leased out the same. It was also renting multiplex with five screens. The assessee was deriving rentals from various properties in the shopping mall and treated the same as income from business. The Assessing Officer however, following his stand for earlier assessment year of 2010-11, of treated the income so derived as taxable under the head income from house property. The CIT(A) has since disagreed with the Assessing Officer and upheld the plea of the assessee for treating such income as income from business. In coming to such conclusion, the CIT(A) referred to the decision of the Tribunal in assessee’s own case for assessment year 2009-10, which was rendered vide & 2196/M/2013 dated 14/08/2015. The Tribunal in its order dated 14/08/2015(supra) held that income/loss from the property was liable to be taxed as business income/loss in the present case and not under the head income from house property. Against such a decision of the CIT(A), Revenue is in further appeal before the Tribunal.

3.

Before us, it was a common point between the parties that the order of the Tribunal dated 14/08/2015(supra), which has been relied upon by the CIT(A), continues to hold the field as it has not been altered by any higher authority. Therefore, in view of the aforesaid precedent, we find no error on the part of the CIT(A) in upholding the plea of the assessee. Consequently, the appeal of the Revenue is dismissed.

4.

In the result, appeal of the Revenue is dismissed.

Order pronounced in the open court on 19/08/2016

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