PARIJA CONSTRUCTION COMPANY PVT. LTD,BHUBANESWAR vs. ITO, BHUBANESWAR

These are appeals filed by the assessee against separate orders of

CIT(A)-1, Bhubaneswar, both dated 10.10.2012, for the assessment years

2006-07 and 2008-09.

challenged the reopening of assessment under section 147 of the I.T.Act,

1961

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ground and, hence same is dismissed as not pressed.

the years under appeal is that the CIT(A) erred in holding that the rental

income earned from the property was income from house property and not

business income as claimed by the assessee.

authorities and materials available on record. The brief facts of the case

are that the Assessing Officer observed that the assessee has earned gross

rental income of Rs.8,32,200/- in A.Y. 2006-07 and Rs.8,97,656/- in A.Y.

2008-09. He observed that the assessee owns four flats bearing Nos.A-

101, A-103, A-104 and A-105 at Nirmala Plaza, 1st floor, A-1, Forest Park,

Bhubaneswar. The said property was purchased from M/s. Utkal Builders

(P) Ltd., during the year 2001-02. He also found that the licensees will

bear the cost towards electricity, lift charges, common electricity charges,

water charges, security and building maintenance charges etc. The

Assessing Officer found that the occupants were not separately charged for

services rendered and that the prime object of the lease agreements was

to let out for rental income. Relying on the decision of Hon’ble Supreme

Court in the case of Sambhu Investment Pvt Ltd vs CIT, 263 ITR 143 (SC),

the Assessing Officer held that the rental income was to be assessed as

income from house property and not as income from business.

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2002-03, the assessee had shown the rental income from the property as

income from business and same was accepted by the department, for

which, he placed at page 4 of the paper book, copy of income return of

income. Further, he submitted that in A.Y. 2004-05 also, the assessee had

shown the rental income from the property as business income, which was

accepted by the department and has filed at page 7 of the paper book, copy

of the income tax return. He further submitted that in assessment year

2005-06 also, the assessee had shown the rental income from the property

as income from business, which was accepted by the department, for

which, he filed at page 9 of the paper book, copy of the income tax return.

He further submitted that in A.Y. 2009-10, the assessee had shown the

income from the property as business income, which was accepted by the

department and has filed copy of income tax return at page 15 of the paper

book. He further submitted that in A.Y. 2010-11, the income from property

shown as business income was accepted by the department and filed the

copy of income tax return at page 19 of the paper book. He submitted that

in an assessment made under section 143(3) for A.Y. 2011-12 order dated

10.2.2014, the Assessing Officer has accepted the income from the

property as business income, copy of which is placed at 24 of paper book.

Therefore, he submitted that though the principle of res-judicata is not

4 ITA Nos. 650 & 651/CT K/ 2012 Asse ssment Years: 2 00 6-0 7 & 20 08- 09

applicable in the income tax proceedings but consistency should be

maintained until and unless change in facts are shown by the department.

For this proposition, he relied on the decision of Hon’ble Supreme Court in

the case of Radhasoami Satsang vs CIT, 193 ITR 321 (SC), wherein, it has

been held that unless there is a material change in justifying the Revenue

to take a different view the earlier view which has been settled and

accepted of a several years should not be disturbed.

controvert the submission of the AR of the assessee.

10, 2010-11 and 2011-12, the department has accepted the income from

the property in question of the assessee as business income and only in

the assessment years 2006-07 and 2008-09, the department has assessed

the income from the property under the head “income from house

property”. The Hon’ble Supreme Court in the case of Radhasoami

Satsang(supra) has held that that unless there is a material change in

justifying the Revenue to take a different view the earlier view which has

been settled and accepted of a several years should not be disturbed. Still

further, the Hon’ble Supreme Court in the case of CIT vs. Excel Industries

Limited, 358 ITR 295 (SC) reiterated the law laid down in Radhasoami

Satsang vs CIT (SUPRA) to hold that where a fundamental aspect

permeating through the different assessment years have been found as a

5 ITA Nos. 650 & 651/CT K/ 2012 Asse ssment Years: 2 00 6-0 7 & 20 08- 09

fact once way or the other, and the parties have allowed the position to be

sustained by not challenging the order, it is not allowed to change the

position in any subsequent year. Hence, respectfully following the decision

in the case of Radhasoami Satsang(supra) and Excel Industries Limited

(supra), I am of the considered view that the income from the property to

be assessed as business income and allow this ground of appeal of the

assessee.

under:

“That without prejudice to the Ground No.A & B as stated above the CIT(A) is not correct in allowing interest on borrowed capital amounting Rs.177224 in stead of Rs.244,424/-(In A.Y. 2006-07) and Rs.5,18,571/- in A.Y. 2008-09).

ground of appeal. Hence, the same is dismissed for want of prosecution.

Order pronounced in the open court on 01/02/2017 in the presence of parties.

Sd/- (N.S Saini) ACCOUNTANT MEMBER

Cuttack; Dated 1/02/2017

6 ITA Nos. 650 & 651/CT K/ 2012 Asse ssment Years: 2 00 6-0 7 & 20 08- 09

B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : M/s. Parija Construction Co.Pvt.Ltd., Flat No.107, Nirmala Plaza, A-1, Forest Park, Bhubaneswar. 2. The Respondent. ITO, Ward 1(3), Bhubaneswar. 3. The CIT(A)-1, Bhubaneswar 4. CIT, Bhubaneswar 5. DR, ITAT, Cuttack BY ORDER, 6. Guard file. //True Copy// SR.PRIVATE ECRETARY ITAT, Cuttack