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Income Tax Appellate Tribunal, “B” BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the assessee is directed against the order of
the Commissioner of Income Tax (Appeals)(C)-II, Chennai, dated
24.03.2014 and pertains to assessment year 2002-03.
2 I.T.A. No.1937/Mds/14 2. Sh. R. Vijayaraghavan, the Ld.counsel for the assessee,
submitted that the first issue arises for consideration is with regard
to assessment of rental income. According to the Ld. counsel, the
assessee claimed the same as income from business. However,
the Assessing Officer treated the rental income as income from
house property. On appeal by the assessee, the CIT(Appeals)
confirmed the classification made by the Assessing Officer as
income from house property by following the judgment of Madras
High Court in assessee's own case for the assessment year 1986-
The Apex Court in assessee's own case for the assessment
years 1990-91 to 1993-94 examined the issue in respect of the very
same property and reversed the judgment of the High Court by
ruling that letting out the property by the assessee is the business of
the assessee. Therefore, the assessee has rightly disclosed the
income under the head “Income from business”. The subject matter
of the appeal before the Apex Court is in respect of the properties
known as “Chennai House” and “Firhavin Estate”. The very same
properties were subject matter of assessment for the year under
consideration also. Therefore, according to the Ld. counsel, the
judgment of the Apex Court is squarely applicable to the facts of the
case, hence, income on letting out the property has to be assessed
only as income from business.
3 I.T.A. No.1937/Mds/14
On the contrary, Dr. B. Nischal, the Ld. Departmental
Representative, submitted that the assessee has let out the
property to Indian Overseas Bank, MMTC and State Trading
Corporation as a normal owner of the property. According to the Ld.
D.R., when the assessee let out the property as a normal owner, the
income therefrom has to be assessed only as income from house
property. Therefore, according to the Ld. D.R., the CIT(Appeals)
has rightly confirmed the addition.
We have considered the rival submissions on either side and
perused the relevant material on record. Admittedly, the assessee
let out two properties, namely, Chennai House and Firhavin Estate.
The Apex Court in Civil Appeal No.4494 of 2004 examined the
letting out of the very same property in assessee's own case and
found that letting out of the property is in fact the business of the
assessee. Therefore, the assessee has rightly disclosed the
income as “income from business”. The Apex Court further found
that the income cannot be treated as income from house property.
Accordingly, the Apex Court set aside the judgment of the Madras
High Court and restored that of the Income Tax Appellate Tribunal.
By respectfully following the judgment of the Apex Court in
assessee's own case, this Tribunal is of the considered opinion that
4 I.T.A. No.1937/Mds/14 the income from letting out of the property has to be assessed only
as income from business and not as income from house property.
Accordingly, the orders of the lower authorities are set aside and the
Assessing Officer is directed to assess the rental income under the
head “income from business”.
The next ground of appeal is with regard to giving credit for the tax deducted at source to the extent `7,11,914/-.
Sh. R. Vijayaraghavan, the Ld.counsel for the assessee,
submitted that the tax was deducted at source to the extent of `7,11,914/-. However, the Assessing Officer refused to give credit
of the tax deducted at source and levied interest under Sections
234A and 234B of the Act. According to the Ld. counsel, once tax
was deducted, the same has to be given credit.
On the contrary, Dr. B. Nischal, the Ld. Departmental
Representative, submitted that the assessee has not produced any
details with regard to deduction of tax at source. In the absence of
the required details, the CIT(Appeals) has rightly confirmed the
order of the Assessing Officer.
We have considered the rival submissions on either side and
perused the relevant material on record. In the absence of the
5 I.T.A. No.1937/Mds/14 details, the CIT(Appeals) confirmed the order of the Assessing Officer. However, the CIT(Appeals) observed that the assessee is at liberty to produce before the A.O. any material evidence with regard to deduction of tax and seek remedial action. Therefore, the assessee is at liberty to furnish the copies of the TDS certificate issued by the deductor before the Assessing Officer. If the assessee files copy of the TDS certificate, then the A.O. shall consider the same and give credit in accordance with law after giving reasonable opportunity to the assessee. With the above observation, the matter is remitted back to the file of the Assessing Officer.
In the result, the appeal of the assessee is allowed.
Order pronounced on 28th August, 2015 at Chennai.
sd/- sd/- (ए. मोहन अलंकामणी) (एन.आर.एस. गणेशन) (A. Mohan Alankamony) (N.R.S. Ganesan) लेखा सद�य/Accountant Member �या�यक सद�य/Judicial Member
चे�नई/Chennai, �दनांक/Dated, the 28th August, 2015.
Kri.
6 I.T.A. No.1937/Mds/14
आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त (अपील)/CIT(A)(C)-II, Chennai 4. आयकर आयु�त/CIT, Chennai-1, Chennai 5. �वभागीय ��त�न�ध/DR 6. गाड� फाईल/GF.