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Income Tax Appellate Tribunal, AGRA (SMC
Before: SHRI A. D. JAIN
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA (SMC) BENCH: AGRA
BEFORE SHRI A. D. JAIN, JUDICIAL MEMBER
I.T.A No. 229/Agra/2016 (ASSESSMENT YEAR-2008-09)
Ravi Kumar Agarwal, Vs.. ITO (2)4, C/o M/s Bharat Talkies, Agra 29/3, Raja Mandi, Agra PAN No. AABHR 0525 C (Revenue) (Assessee)
Assessee by Shri Pankaj Gargh, Advocate Revenue by Shri Waseem Arshad, Sr. DR.
Date of Hearing 21.08.2017 Date of Pronouncement 25.10.2017
ORDER This is assessee’s appeal for Assessment Year 2008-09, raising the following grounds: “1. Because the Ld. CIT(A) has erred both in law and on facts in confirming the action of the Assessing Officer in assessing the income from commercial building named "Bharat Talkies" as rental income under the head income from house property as against the income shown under the head income from business. The Assessing Officer has legally erred in ignoring the direction of the Hon’ble ITAT which has been wrongly and illegally confirmed by Ld. CIT(A).
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Because the Ld. CIT(A) has erred both in law and on facts in confirming the action of the Assessing Officer in assessing the income from parking space, of commercial building named "Bharat Talkies" as income from other sources as against the income shown under the head income from business. The Assessing Officer has legally erred in ignoring the direction of the Hon'ble ITAT which has been wrongly and illegally confirmed by Ld. CIT(A). 3. Because the Ld. CIT(A) has wrongly, illegally and arbitrarily confirmed the disallowance made by the Assessing Officer as claimed vide Income & Expenditure Account of Bharat Talkies Associates. 4. Because the Ld. CIT(A) has erred both in law and on facts in confirming the action of the Assessing Officer in not allowing set off of unabsorbed brought forward depreciation. 5. Because without prejudice to the grounds as taken above the statutory deduction should have been allowed from the income from parking space.” 2. Vide order dated 28.12.2010, the Assessing Officer assessed the rent of portion of cinema building as income from house property and rent received for parking area as income from other sources. The Assessing Officer also disallowed the expenses claimed in the profit & loss account. By virtue of order dated 17.01.2013, the ld. CIT(A) dismissed the asessee’s appeal. The Tribunal, vide his order dated 05.09.2013 (APB, pages 1 to 9), restored the appeal to the Assessing Officer, observing as follows:
I.T.A No. 271/Agra/2013 3
“8. On consideration of rival submission. I am of the view the matter requires reconsideration at the level of the A.O. The assessee’s written submission quoted above clearly suggested that the case of the assessee has not been properly appreciated in the light of the regular assessment order passed by A.O. in earlier years 2006-07 and 2007-08 under Section 143(3) of the Act. It is contended that since the facts and circumstances are same as have been considered in earlier years, therefore, the A.O. should not have deviated from stand in taking a different view unless the A.O. has brought some new or different facts on record, Ld. CIT(A) failed to note that even if copies of the assessment order of the earlier years have not been furnished before him but the assessment order passed in earlier years under Section 143(3) of the Act are part of the record of the revenue, therefore, should been summoned before taking any adverse view against the assessee. It is well settled law that even if principle of res-judicata does not apply to the income tax proceeding but the principle of consistency shall have to be followed by the Revenue Authorities, unless different facts & adverse material is brought on record against the assessee. In the same facts and circumstances of the case, Revenue Authority could have taken a different view provided the facts available on record are also taken in the consideration. Therefore, principle of consistency shall have to be followed by the Income fax Authority in the same facts and circumstances of the case. ! am fortified in my view by the judgments of Hon'ble M.P. High Court in the case of CIT Vs. Godavari Corporation Ltd., 156 JTR 835 (MP), decision of Hon’ble Supreme Court in the case of Union of India Vs. Satish Panalai Shah 249 ITR 221 (SC), decision of Hon'ble Punjab & Haryana High Court in the case of CIT Vs. Vilkas Chemi Gum India 276 ITR 32 and decision of Hon'ble Supreme Court in the case of Radha Swami Satsang Vs. CIT, 193 ITR 32 and decision of Hon’ble Supreme Court in the case of Radha Swami Satsang Vs. CIT, 193 ITR 321.
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On consideration of the return of income, the computation of income, profit and loss account of the year consideration and earlier \ears, and assessment order passed under Section 143(3) of the Act in earlier years as mentioned above, would reveal that there may not be any change in the facts and circumstances of as have been contended by the assessee. Therefore, the income tax authority should not have deviated from the stand already taken on the same facts case of these assessee. The matter therefore, requires reconsideration at the level of the Assessing Officer. Ld. Counsel for the assessee also contended that intention have to be seen at the time of giving property on rent in the facts and circumstances of the case and relied upon the decisions reported in 123 JTR (Alld) 343, 20 ITR 451 (SC). Since I am of the view, the matter requires reconsideration on Ground Nos. 1 and 2, therefore. Ground No.3 and 4 of the appeal of the assessee would be dependent upon finding given by the A.O. on Ground Nos. I and 2. I accordingly set aside the orders of the authorities below and restore all the four grounds to the file of the A.O. with direction to re-decide these grounds in accordance with law as observed in ibis order and the A.O. shall give reasonable opportunity of being heard to the assessee.” 3. In the second round, which has brought the assessee before us again, the Assessing Officer, made a similar addition as earlier, vide order dated 27.01.2015, whereas the ld. CIT(A) has dismissed the assessee’s appeal by passing the impugned order dated 22.03.2016.
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I have heard the parties and have perused the material on record. As per the record, upto Assessment Year 2007-08, the assessee carried on the business of exhibition of films in the building/cinema theater, i.e., “Bharat Talkies”. Since there were losses in the year under consideration, the business of film exhibition was stopped w.e.f. 31.03.2007. From the preceding years, a portion of the cinema building was let out to M/s Roop Maya Shoe Last Industries (P) Ltd. The receipt of rent was shown as business income, as also in the year under consideration. The parking space of the cinema building was also let out during the year and the rent was, again, shown as business income. 5. The Ld. CIT(A), while dismissing the assessee’s appeal, has observed that the assessee has not given the building to anybody for running of cinema hall and only a part thereof has been rented out and is being used as an administrative office by the tenant; that as such, the building is not being used for commercial exploitation of running of cinema hall/ film studio; that as such, the rental income has rightly been taxed by the Assessing Officer as income from house property; and that likewise, the parking space has not been
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used for parking of vehicles of visitors to the cinema hall and as such,
the income there-from has also been rightly taxed as income from
other sources.
It is seen that apropos the building, for Assessment Years
2006-07 & 2007-08, rent received, shown as business income by the
assessee, was accepted by the department and no addition was
made. Facts for the year consideration have not undergone any
change from those present in the said earlier years. Therefore, the
observation of the CIT(A) that if in the earlier years, any decision has
been taken by the Assessing Officer without considering a particular
fact, the same mistake is not to continue, is not appropriate, since the
facts in the year under consideration, as observed, are the same as
those for the earlier years. The principle of res-judicata may not be
applicable, but in the unchanged facts over the years, as accepted by
the Department itself, consistency needs to be maintained. Therefore,
the Assessing Officer is directed to treat the rent from the building as
business income, as shown by the assessee.
So far as regards the income from parking space, it is not
refuted that the parking space is appertenant to the building and so,
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the income there-from also requires to be treated as business
income. The Assessing Officer is directed accordingly.
Considering the issue of disallowance of expenses claimed in
the profit & loss account and disallowance of brought forward
unabsorbed depreciation, the ld. CIT(A) has not given any finding on
these aspects, though Grounds Nos. 6 & 7 were specifically taken
before the CIT(A) by the assessee. The Assessing Officer is directed
to decide these issues afresh in the light of our conclusion arrived at
with regard to the treatment of the income from the letting out of the
cinema building and the parking space. Ordered accordingly.
In the result, the appeal is partly allowed.
Order pronounced in the open court on 25/10/2017.
Sd/- (A.D. JAIN) JUDICIAL MEMBER Dated 25/10/2017 Aks/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR
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Date 1. Draft dictated 23.10.2017 PS 2. Draft placed before author 25.10.2017 PS 3. Draft proposed & placed before the second member JM/AM 4. Draft discussed/approved by Second Member. JM/AM 5. Approved Draft comes to the Sr.PS/PS PS/PS 6. Kept for pronouncement on 25.10.2017 PS 7. File sent to the Bench Clerk 26.102017 PS 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order.