CHENNAI PROPERTIES AND INVESTMENTS LIMITED,CHENNAI vs. ACIT, CHENNAI

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. 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.

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 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 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.