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Income Tax Appellate Tribunal - Mumbai

Asst Cit 9(2)(2), Mumbai vs E- City Real Estate P.Ltd, Mumbai on 23 January, 2019

               IN THE INCOME TAX APPELLATE TRIBUNAL
                    MUMBAI BENCHES "E", MUMBAI

BEFORE SHRI SHAMIM YAHYA (AM) AND SHRI RAM LAL NEGI (JM)

                         ITA No. 4990/MUM/2017
                        Assessment Year: 2013-2014
                                    &
                         ITA No. 4991/MUM/2017
                        Assessment Year: 2014-2015

The Asst. Commissioner of Income                  M/s E-City Real Estates Pvt. Ltd.,
Tax - 9(2)(2),                                    844/4, Fun Republic Shah,
Room No. 665A, 6th Floor,                         Industrial Estate, Off New Link
Aayakar Bhavan, M.K. Road,                 Vs.    Road, Andheri (West),
Mumbai - 400020                                   Mumbai - 400053

                                                  PAN: AAJCS5879F
             (Appellant)                                   (Respondent)

                              Revenue by : Shri R. Manjunatha Swamy (DR)

                              Assessee by : Shri Jay Bhansali (AR)

                  Date of Hearing:           22/11/2018
           Date of Pronouncement:            23/01/2019


                                   ORDER

PER RAM LAL NEGI, JM

These appeals have been filed by the revenue against the two orders dated 28.04.2017 passed by the Commissioner of Income Tax (Appeals) (for short 'the CIT (A)')-16, Mumbai, for the assessment years 2013-14 and 2014-15 respectively, whereby the Ld. CIT (A) has partly allowed the appeals filed by the assessee against assessment orders passed u/s 143 (3) of the Income Tax Act, 1961 (for short 'the Act').

2. Brief facts of the case are that the assessee company engaged in the business of acquiring immovable property and construction development and building "Family Entertainment Cum Malls" across India and leasing properties 2 ITA Nos. 4990 & 4991/MUM/2017 Assessment Years: 2013-14 and 2014-15 (short term and long term), licensing etc., filed its return of income for the assessment year under consideration declaring the total loss at Rs. 17,64,83,379/- . Subsequently, revised return was filed declaring the loss at Rs. 17,51,81,992/- after making disallowance u/s 14A of the Act. In response to the statutory notices, the authorized representative of the assessee attended the assessment proceedings and furnished the details called for. The assessee had shown income under the head operating income (rent) amounting to Rs. 30,08,07,763/-, maintenance charges recovered of Rs. 8,68,67,368/- (rent received by the lessee) in respect of some facilities provided by it to the lessee's as per the agreement. Since, the assessee had taken all the receipts under the head income from business, the AO asked the assessee to show cause as to why the lease rental income should not be assessed under the head income from house property. The assessee submitted that the operational income received from the said activity and other service charges was consistently offered to tax as its business income in the earlier years and the same was accepted by the department as business income. Therefore, the said income has been claimed as 'profits and gains from the business'. The assessee further relied upon the decision of the ITAT rendered in its own cases pertaining to the earlier assessment years in support of its submissions. However, the AO rejecting the contention of the assessee treated the said income as income from house property.

3. In the first appeal, the Ld. CIT (A) relying on the decisions of the ITAT rendered in the assessee's own cases for the A.Ys. 2009-10, 2010-11 and the order passed by the Ld. CIT (A) pertaining to the assessment year 2011-12 and 2012-13 allowed the appeal of the assessee and decided the issue in favour of the assessee. The revenue is in appeal before the Tribunal against the said order passed by the Ld. CIT (A).

ITA Nos. 4990 & 4991/MUM/2017 Assessment Years: 2013-14 and 2014-15

4. The revenue has challenged the impugned order passed by the Ld. CIT (A) on the following grounds:-

(i) "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred on facts and in law in not upholding the action taken by the AO in treating the rental income from Operating Family Entertainment Center cum Mall and Maintenance Charges under the head "Income from House Property" against the assessee's claim of "Profit and Gains from Business or Profession?"

(ii) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred on facts and in completely ignoring the decision of the Hon'ble Supreme Court in the case of shambhu Investment (P) Ltd. 129 Taxman 17 (SC) wherein it is held that income derived by an assessee by letting out the property is assessable as income from property and not business income?"

5. At the outset, the Ld. counsel for the assessee submitted that the issue involved in the present appeal is squarely covered by the decisions of the ITAT rendered in the assessee's own case for the earlier assessment years including the assessment years 2011-12 and 2012-13. The Ld. counsel further pointed out that the Hon'ble Bombay High Court has dismissed the appeal filed by the revenue against the findings of the ITAT, in the assessee's own appeals for the A.Y. 2007-08 to 2010-11. Since, the order passed by the Ld. CIT (A) is in accordance with the decision of the Hon'ble High Court, there is no merit in the appeal of the revenue.

6. On the other hand, the Ld. Departmental Representative (DR) did not controvert the facts stated by the Ld. counsel.

We have perused the material on record and also gone through the orders passed by the coordinate Bench in the assessee's own case as well as the judgment of the Hon'ble High Court passed in the assessee's own case ITA No. 319 of 2015, 1289 of 2016, 1331 of 2016 and 201 of 2015. We notice that the 4 ITA Nos. 4990 & 4991/MUM/2017 Assessment Years: 2013-14 and 2014-15 coordinate Bench has decided the identical issue in favour of the assessee in assessee's own case ITA No. 5503/Mum/2016 pertaining to the A.Y. 2011-12 relying on the decision of the Tribunal rendered in the assessee's own case for the earlier assessment years and the judgment of the Hon'ble High Court passed in the assessee's own case for the A.Ys. 2007-08 to 2010-2011 referred above. Similarly, the coordinate Bench has decided the identical issue in favour of the assessee in assessee's own appeal ITA No. 914/Mum/2017 for the A.Y. 2012-13 by following the decision of the coordinate Bench rendered in the assessee's own cases for the earlier assessment years.

7. Since, the Hon'ble Bombay High Court has dismissed the appeals filed by the revenue against the findings of the coordinate Benches in the assessee's own case for the A.Ys. 2007-08 to 2010-11 and upheld the findings of the Tribunal and since the findings of the Ld. CIT (A) in the present case is in accordance with the findings of the coordinate Bench confirmed by the Hon'ble High Court, we find no reason to interfere with the decision of the Ld. CIT (A). Hence, we uphold the order passed by the Ld. CIT (A) and dismiss the appeal of the revenue.

The facts and the issues involved in the present appeal is identical to the facts and issue involved in the present case except the amount which was treated as profit and gains from the business by the assessee. Hence, we do not consider it necessary to mention the remaining facts of the case.

2. The revenue has raised the following grounds of appeal against the impugned order passed by the Ld. CIT (A):-

(i) "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred on facts and in law in not upholding the action taken by the AO in treating the rental income from Operating Family Entertainment Center 5 ITA Nos. 4990 & 4991/MUM/2017 Assessment Years: 2013-14 and 2014-15 cum Mall and Maintenance Charges under the head "Income from House Property" against the assessee's claim of "Profit and Gains from Business or Profession?"

(ii) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred on facts and in law in completely ignoring the decision of the Hon'ble Supreme Court in the case of shambhu Investment (P) Ltd. 129 Taxman 17 (SC) wherein it is held that income derived by an assessee by letting out the property is assessable as income from property and not business income?"

3. Since, the issue involved in the present case is identical to the issue involved in the assessee's own case for the A.Y. 2013-14 and since we have dismissed the appeal of the revenue pertaining to the assessment year 2013- 14, consistent with our findings, we dismiss the present appeal filed by the revenue for the same reasons.

In the result, both the appeals filed by the revenue for assessment years 2013-14 and 2014-15 are dismissed.

Order pronounced in the open court on 23rd January, 2019.

             Sd/-                                                  Sd/-

     (SHAMIM YAHYA)                                         (RAM LAL NEGI)
 ACCOUNTANT MEMBER                                       JUDICIAL MEMBER
मुंबई Mumbai; दिन ुं क Dated: 23/01/2019

Alindra PS
                                    6
                                                         ITA Nos. 4990 & 4991/MUM/2017
                                                   Assessment Years: 2013-14 and 2014-15

आदे श प्रतितिति अग्रे तिि/Copy of the Order forwarded to :

1. अपील र्थी / The Appellant

2. प्रत्यर्थी / The Respondent.

3. आयकर आयक्त(अपील) / The CIT(A)-

4. आयकर आयक्त / CIT

5. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, मुंबई / DR, ITAT, Mumbai

6. ग र्ड फ ईल / Guard file.

आदे शानु सार/ BY ORDER, सत्य दपि प्रदि //True Copy// उि/सहायक िं जीकार (Dy./Asstt. Registrar) आयकर अिीिीय अतिकरण, मुं बई / ITAT, Mumbai