Income Tax Appellate Tribunal - Mumbai
Vaishnav S. Puri (Huf), Mumbai vs Department Of Income Tax on 9 April, 2013
आयकर अपीलीय अिधकरण,
अिधकरण मुंबई
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES 'F' MUMBAI
सव[ौी आय.पी. बंसल, Ûयाियक सदःय /एवं
एवं ौी राजेÛि, लेखा सदःय
BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND
SHRI RAJENDRA, ACCOUNTANT MEMBER
आयकर अपील सं. / ITA No. 693/Mum/2012
िनधा[रण वष[ /Assessment Year 2007-08
A.C.I.T. 19(3), Vaishnav S. Puri (HUF),
Room No. 305, 3rd Floor, (Prop Kaks International)
Piramal Chambers, Parel Vs. NCL Building, 8th Floor,
MUMBAI-400 012. Bandra Kurla Complex,
Bandra (E),
MUMBAI.
PAN: AACHP 9479 P
(अपीलाथȸ /Appellant) (ू×यथȸ / Respondent)
Revenue by : Shri Om Prakash Meena
Assessee by : Shri Aasifa Khan
सुनवाई कȧ तारȣख / Date of Hearing : 09-04-2013
घोषणा कȧ तारȣख / Date of Pronouncement : 19-04-2013
आदे श / O R D E R
PER RAJENDRA, A.M.
The present appeal is directed against the order dt.08-11-2011 passed by the CIT(A)-30, Mumbai. Following are the Grounds of Appeal:
(1)On the fact and in the circumstances of the case and in law the Learned CIT(A) has erred in holding the income from running of business centre as 'Income from Business' and not 'Income from House Property' by following the decision of the Ld. CIT(A) in the assessee's own case for AY. 2003-04 to 2006-07 without relying upon the Supreme Court's decision in the case of CIT Vs. Shambhu Investments Pvt. Ltd., reported in 263 ITR 143.
(2)On the fact and in the circumstances of the case and in law the Learned CIT(A) has failed to appreciate the facts that the Hon'ble ITAT has decided the issue against the assessee for AY. 2003-04 to 2006-07 and upheld the action of the Assessing Officer.
(3)"On the fact and in the circumstances of the case and in law the Learned CIT(A) has erred in deleting the addition in annual value of the rented properties on account of notional interest on Security Deposit and advanced rent received by following the decision of the Ld. CIT(A) in the assessee's own case for A.Y. 2003-04 to 2006-07 without appreciating the decision of Supreme Court in the case of Bhagwandas Jain Vs. Union of India reported in 128 ITR 315 and decision of the Hon'ble ITAT in the case of Tivoli Investment and Trading Co. Pvt Ltd., reported in 90 ITD 163 Mumbai.2 ITA No. 693/Mum/2012
Vaishnav S. Puri (HUF) The appellant prays that the order of the CIT(A) on the above ground be set aside and that of the AO may be restored.
(5) The appellant craves leave to amend or alter any ground or add a new ground which may be necessary."
2. Assessee-HUF, engaged in the business of providing facilities of business center with infrastructure facilities, filed its return of income on 29.10.2007declaring total income of Rs.1.84 Crores. Assessing officer (AO) finalised the assessment order u/s.143(3) of the Income-tax Act,1961 (Act),on 21.12.2009, determining the total income at Rs.2.08Crores.
Order U/s. 158A(6) of the Act on Ground Nos. 1 & 2 of the Revenue:
2.1. First two Grounds of appeal pertain to treating income from business; in respect of providing business centre as 'Income from House Property'. During the assessment proceedings AO found that the appellant was engaged in the business of providing business centre and other related services, that it had received service charges from providing business centre facilities amounting to Rs. 3,13,47,736/- for the year under consideration. After perusing the agreements for rents AO held that the assessee was basically interested to have the rental income from the said premises.
He held that income earned by the assessee-HUF had to be assessed under the head 'Income from House Property' and not under the head business income.
2.2. Against the order of the AO assessee preferred an appeal before the First Appeal Authority (FAA). After considering the submission of the assessee and the order of the AO FAA held that issue of business income or rental income was decided in favour of the assessee by his predecessors while adjudicating the appeals for the AYs.2003-04 to 2006-07. Following the orders of the earlier AYs., he held that income from the business center has to be assessed under the head income from business.
2.3. Before us, Departmental Representative (DR) submitted that matter was decided against the assessee-HUF by the Tribunal for the earlier AYs., that following the same, these grounds should be dismissed. Authorised Representative (AR) submitted that against the order of the ITAT assessee had filed appeal before the Hon'ble Bombay High Court and Hon'ble Court had admitted the appeal vide its order dated 08-02-2013(Income Tax Appeal nos.,1411of 2011,1412 of 2011,1413 of 2011 and 456 of 2012.) Assessee filed Form No.8 as per rule 16 of ITAT Rules,1963 in this regard and made a declaration u/s.158A(1) of the Act. In the declaration following submissions were made:
I, Vaishnav S. Puri, son of Shri Shorilal Puri being the Karta of Vaishnav S Puri Hindu Undivided Family do hereby declare:
1.That the following question(s) of law are pending in the case of Vaishnav S Puri HUF before the High Court in an appeal under section 260A of the Income tax Act, 1961 in respect of the assess- ment years 2003 -04 to 2006-07.
A copy of the question of law referred to the High Court for the Assessment Years 2003-04 to 2006-07 is enclosed herewith.
3 ITA No. 693/Mum/2012Vaishnav S. Puri (HUF)
2.That the said question of law is identical with the question of law arising in the case Vaishnav S Puri HUF in respect of the assessment year 2007-08 which is pending before the Hon'ble Income Tax Appellate Tribunal.
3.That if the Income Tax Appellate Tribunal agrees to apply to the case referred to in paragraph 2 above the final decision on the question of law in the case referred to in paragraph 1 above, the assessee mentioned in paragraphs 1 and 2 above, shall not raise the said question of law in the case referred to iii paragraph 2 above in appeal before any appellate authority or for a reference before the High Court under section 260A or the Supreme Court under Section under Section 261or in appeal before the Supreme Court under Section 257.
Along with the above declaration, assessee has submitted the order of the Hon'ble High Court which is dt. 11-01-2013 in Income Tax Appeal No. 1411/2011 in which the following question has been passed:
Heard Admit on the following reframed substantial question of law:
"whether on the facts and circumstances of the case the receipts under various agreements are income from business or income from other sources or income from house property"
2. to be heard along with Income Tax Appeal No. 3343 of 2009. According to the declaration, it is the case of the assessee that identical question of law is pending before the Hon'ble High Court. Therefore, an order under Sub-Section 3 of Section 158(A) should be passed as the assessee shall not raise such question of law in the present case and final decision on question of law should be applied. Copy of the declaration was also given to ld. DR who did not object that the question of law arises in Ground Nos. 1 & 2 is identical to the question of law raised by the assessee before Hon'ble High Court.
In this view of the situation, after hearing both the parties, we admit the claim of the assessee under the provisions of Sub-Section (3) of 158(A) and decide these grounds against the assessee with the direction that whenever question of law raised by the assessee before Hon'ble High Court in earlier years is replied the same decision will apply to these grounds. In other words, if the earlier view taken by ITAT in respect of AYs. 2003-04 to 2006-07 is upheld then this order of the Tribunal will stand on these grounds and if the order of the Hon'ble High Court on this question is otherwise than applying the same, this order of the Tribunal will be modified by the AO. With these directions, Ground Nos. 1 & 2 filed by the Revenue is disposed-off under the provisions of Sub-Section (6) of Section 158(A) and these grounds of Revenue are allowed.
Order U/s. 254(1) on other Grounds:
3. Next effective Ground of appeal is about deleting of addition, made by the AO, on account of notional interest on Security Deposit and advanced rent received. During the assessment proceedings AO found that the assessee; for the AY under consideration; had received total security of Rs.1.55 Crores for different properties, that rent received was very nominal, that same was received in form of security and advance rent. Finally he made an addition of Rs.15,58,700/-
4 ITA No. 693/Mum/2012Vaishnav S. Puri (HUF) (10% of the deposits) to the income of the assessee-HUF.
3.1. Against the order of the AO assessee preferred an appeal before the FAA. He held that issue of notional interest on deposits/advances was decided in favour of the assessee by his predecessors while deciding the appeals for the AYs. 2003-04 to 2006-07. Following the orders of the earlier AYs., he deleted the addition made by the AO.
3.2. Before us, DR submitted that FAA had not considered the judgments of the Hon'ble Apex Court delivered in the case of Bhagwandas Jain(128ITR315) and the decision of the Trivoli Investment and Trading Co. Pvt. Ltd.(90ITD163). AR submitted that Commissioner of Income-tax -19, Mumbai had filed appeals against the order of the Tribunal for the same issue in assessee's own case, that Hon'ble High Court had dismissed the appeal filed by the Department vide order dtd.04-07-2012.
3.3. We have heard the rival submissions and perused the material on record. It is found that Hon'ble jurisdictional High Court had framed the following question in assessee's own case while deciding the Appeal Nos. 2196 of 2011, 2202 of 2011, 2205 of 2011 and 385 of 2012.
Whether on the facts and circumstances. of the case and in law, the Tribunal was justified in upholding the order of the CIT(A) holding that the notional interest income on the security deposit / Advance rent cannot be included in the income from property for the purpose of section 23(1) (a) of the Income Tax Act, 1961?"
Above-referred question was answered in favour of the assessee by the Hon'ble Court by holding the following :
"The question as raised does not arise in this case. It was not contended by the appellant that the amount receivable under Section 23(1) (a) was higher than the rent actually received. It is an admitted position that the property has been let and the matter is therefore governed by Section 23(1) (b) of the Act. The question is therefore answered against the appellant-revenue by the judgment of this Court in Commissioner of Income Tax versus J. K. Investors (Bombay) Ltd 248 ITR 723."
Respectfully following the above order of the jurisdictional High Court we decided last ground of appeal in favour of the assessee.
As a result, appeal filed by the AO stands Partly allowed. पǐरणामःवǾप िनधा[रण-अिधकारȣ Ʈारा दाǔख़ल कȧ गई अपील आंिशक Ǿप से मंज़ूर कȧ जाती है .
Order pronounced in the open court on 19th April, 2013 आदे श कȧ घोषणा खुले Ûयायालय मɅ Ǒदनांक 19 अूैल,2013 को कȧ गई ।
Sd/- Sd/-
(आय.पी. बंसल / I.P. BANSAL) (राजेÛि / RAJENDRA)
Ûयाियक सदःय / JUDICIAL MEMBER लेखा सदःय / ACCOUNTANT MEMBER
मुंबई/Mumbai, Ǒदनांक/Date: 19th April, 2013
TNMM
5 ITA No. 693/Mum/2012
Vaishnav S. Puri (HUF)
आदे श कȧ ूितिलǒप अमेǒषत/
षत Copy of the Order forwarded to :
1. Appellant
2. Respondent
3. The concerned CIT (A)
4. The concerned CIT
5. DR "F" Bench, ITAT, Mumbai
6. Guard File
स×याǒपत ूित //True Copy//
/ BY ORDER,
आदे शानुसार
उप सहायक पंजीकार Dy./Asst.
उप/सहायक Registrar
अिधकरण मुंबई / ITAT, Mumbai
आयकर अपीलीय अिधकरण,