Income Tax Appellate Tribunal - Kolkata
Lci ( India) Ltd., Kolkata vs Department Of Income Tax
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IN THE INCOME TAX APPELLATE TRIBUNAL,
KOLKATA 'A' BENCH, KOLKATA
Before Shri Pramod Kumar (Accountant Member),
and Shri George Mathan (Judicial Member)
I.T.A. No .: 1142/ Kol . / 2011
Assessme nt year : 20 07-08
Deputy Commi ssione r of Income Tax,
Circl e-8, Kol kata .............App ell an t
Vs.
M/ s. LCI (India) Ltd.,
75C, Pa rk Street, 2 n d floor,
Kolka ta-700 016 .........R espo ndent
[ PAN : A AA CL 5 741 Q]
Appearances by:
S.P. Lahiri, for the appellant
S.M. Surana, for the respondent
Date of co ncluding t he hea ri ng : May 1 7, 20 12
Date of prono unci ng the o rde r : May 1 7, 20 12
O R D E R
Per George Mathan :
1. This is an appeal filed by the Revenue against the order of ld.
Commissioner of Income Tax(Appeals)-VIII, Kolkata in Appeal No. 480/CIT(A.)-VIII/Kol./Cir-8/09-10 dated 14.06.2011 for the assessment year 2007-08.
2. In revenue's appeal, the Revenue has raised the following ground:-
"That on the facts and circumstances of the case and in law, the ld. CIT(A) erred in holding that the income earne d by way of rent from letting out godowns on monthly rent is assessable as income from business I . T. A . N o . : 11 4 2 / K o l . / 2 0 11 A s s e s s m e nt y e a r : 2 0 0 7- 0 8 Page 2 of 6 instead of income from house property as assessed by the Assessing Officer for assessment year 2007-08".
3. It was submitted by the ld. D.R. that the assessee is a Company which is deriving rental income from godown. It was submitted that the assessee has claimed rental income received on the four godowns as income from business. It was the submission that Assessing Officer had after verifying the details held that the rental income from the godowns was liable to be assessed only under the head "income from house property". Consequently the assessment had been completed under section 143(3) on 31.12.2009 assessing the rental income from four godowns as income from house property. It was the submission that the assessee had filed an appeal before ld. CIT(Appeals), who had vide his order dated 14.06.2011 held that the income from the godowns was liable to be assessed only under the head "business". The submission of ld. D.R. that the reason given by the ld. CIT(Appeals) was that in the earlier and subsequent assessment year, the revenue had held the rental income from the godowns as business income declared by the assessee. It was the submission by ld. D.R. that re- assessment year is separate and the law as is correctly prevailed has to be applied for the assessment year. It was the submission that the assessee having been relied only on rental income, the same is liable to be under the head "income from house property". It was the submission that the order of ld. CIT(Appeals) was liable to be reversed.
4. In reply, ld. A.R. for the assessee drew our attention to pages 5-7 of the paper book filed by the assessee, which is a cop y of the assessment order for the assessment year 1999-2000 passed under I . T. A . N o . : 11 4 2 / K o l . / 2 0 11 A s s e s s m e nt y e a r : 2 0 0 7- 0 8 Page 3 of 6 section 143(3) r.w. s. 147, wherein warehousing/ rental income of the assessee had been assessed under the head "business" as disclosed by the assessee. It was the submission of ld. A.R. that the said assessment order was dated 17.11.2006. He further drew ou r attention to page 36 of the paper book, which is a copy of the assessment order for the assessment year 2006-07, wherein the income of the assessee has been assessed under the head "business". It was the submission that under the assessment year the income of the assessee was only rental income. It was the submission that the said assessment order is dated 31.12.2010, which is subsequent to the assessment order passed for the impugned assessment year under appeal. He also drew our attention to page 21 of the pap er book, which is a copy of the assessment order for assessment year 2004-05, wherein also rental income of the assessee has been assessed under the head "income from business". It was the submission that for the assessment year 2004-05 also, the date of the order was 31.12.2010. It was the submission that for the earlier and subsequent assessment year, the incomes of the assessee from the letting out of the godowns have been accepted and assessed under the head "income from business" as disclosed by the assessee. It was further submission of ld. A.R. that the assessment order which has been passed subsequently was also reopened the assessment. It was also the submission that even after completing the assessment for subsequent years assessing the income of the assessee under the head "business income", the revenue has decided to file an appeal against the order of ld. CIT(Appeals) for the assessment year 2007-08. It was the submission that in view of the decision of the Hon'ble Supreme Cou rt in the case of Radhosami Satsang -vs.-CIT reported in 193 ITR 321, the assessee is entitled to the principle of consistency as the facts remain the same for I . T. A . N o . : 11 4 2 / K o l . / 2 0 11 A s s e s s m e nt y e a r : 2 0 0 7- 0 8 Page 4 of 6 all these assessment years. It was the submission that the order of ld. CIT(Appeals) may be sustained.
5. We have heard the rival contentions, perused the material on record and duly considered factual matrix of the case in the light of the applicable legal p osition. Perusal of the assessment orders for the earlier and subsequent assessment years clearly show that section 148 notices have been issued to treat the income from leasing out of the godowns as income from house property as against income from business as disclosed by the assessee. It was further noticed that after the issuance of notice under section 148 and after considering the evidences produced, the Assessing Officer has accepted the claim of the assessee that income from the leasing out of the godowns is liable to be assessed only under the head "income from business". The impugned assessment year under appeal being assessment year 2007-08 seems to be only assessment year in which the income of the assessee has been assessed under the head "income from house property" as against the head "income from business". It was also noticed that after passing correct assessment order for the impugned assessment year, earlier assessment as well as subsequent assessment years have been completed accepting the claim of the assessee that income is liable to be assessed under the head "income from business". Therefore, in view of the decision of the Hon'ble Supreme Cou rt in the case of Radhosami Satsang (supra), wherein it has been held that even though the principles of res judicata have no application in income-tax proceedings, the principles of consistency should be followed, and wherein Their Lordships had taken note of the earlier Hon'ble Supreme Court's decision in the case of Parashuram Pottery Works Co. Ltd. -vs.-
I . T. A . N o . : 11 4 2 / K o l . / 2 0 11 A s s e s s m e nt y e a r : 2 0 0 7- 0 8 Page 5 of 6 ITO reported in [1977] 106 ITR 1 at page 10, wherein it was observed that "we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issue s should not be reactivated be yond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other sphere s of human activity". Undoubtedly every assessment year is an independent unit and what is decided in due assessment year may or may not be applied to the following years, however, where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. In the present case, we are dealing with a situation in which after passing the impugned order on 31.12.2009, this very Assessing Officer on 31.12.2010 holds the view that income from letting of godowns is to be treated as business income. Once so is the view taken by the Assessing Officer in assessee's own case for subsequent year, there cannot be any good reason for the Assessing Officer to challenge CIT (A)'s holding so. As a matter of fact, in view of the principle of consistency alone, the appeal of the revenue must fails.
6. In the result, the appeal of the revenue is dismissed. The order is dictated and pronounced in the open court immediately upon conclusion of hearing today on 17 t h day of May, 2012.
Sd/- Sd/-
Pramod Kumar Geor ge Mathan
(Accountant Member) (Judicial Member)
Kolkata, the 17 t h day of May, 2012
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Copies to : (1) Th e app ell ant
(2) Th e respon dent
(3) CIT
(4) CIT(A)
(5) Th e D ep artment al Rep resentativ e
(6) Guard File
By order etc
Assis tant Registrar
Income Tax Appe llate Tribunal
Kolkata benches, Kolkata
Laha/Sr. P.S.