Income Tax Appellate Tribunal - Mumbai
Bombay Gas Co.Ltd, Mumbai vs Dcit 1(1), Mumbai on 20 December, 2018
1 ITA Nos.112 /Mum/2016 & 781/Mum/2016 M/s. Bombay Gas Company Ltd.
Assessment Year :2011-12 आयकर अपीलीय अिधकरण "बी"
ायपीठ मुंबई म ।
IN THE INCOME TAX APPELLATE TRIBUNAL "B" BENCH, MUMBAI माननीय ी सी. एन. साद, ाियक सद एवं माननीय ी मनोज कुमार अ वाल ,ले खा सद के सम ।
BEFORE HON'BLE SHRI C.N. PRASAD, JM AND HON'BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं./ I.T.A. No.112/Mum/2016 (िनधा रण वष / Assessment Year: 2011-12) Bomba y Gas Co. Ltd. Dy. Commissioner of बनाम/ Empire House, A.K. Naik Marg Income tax -1 (1) Fort, Mumbai-400 001. Vs. Aaykar Bhavan, Mumbai. थायीले खासं ./जीआइआरसं ./PAN/GIR No. AAACB-5863-D (अ पीलाथ#/Appellant) : ( $थ# / Respondent) & आयकरअ पील सं./ I.T.A. No.781/Mum/2016 (िनधा रण वष / Assessment Year: 2011-12) Dy. Commissioner of Income Bomba y Gas Co. Ltd.
बनाम/
tax -1 (1) Empire House,A.K. Naik Marg
Aaykar Bhavan, Mumbai. Vs. Fort, Mumbai-400 001
थायीले खासं ./जीआइआरसं ./PAN/GIR No. AAACB-5863-D (अ पीलाथ#/Appellant) : ( $थ# / Respondent) Assessee by : Manish V. Shah & Ms. Foram Bhanushali- Ld. ARs Revenue by : Mrs. Neelima V. Nadkarni - Ld.DR सुनवाई की तारीख/ : 13/12/2018 Date of Hearing घोषणा की तारीख / : 20/12/2018 Date of Pronouncement 2 ITA Nos.112 /Mum/2016 & 781/Mum/2016 M/s. Bombay Gas Company Ltd.
Assessment Year :2011-12 आदे श / O R D E R Per Manoj Kumar Aggarwal (Accountant Member)
1. These cross appeals for Assessment Year [AY] 2011-12 contest the order of Ld. Commissioner of Income-Tax (Appeals)-2, Mumbai, [CIT(A)], Appeal No. CIT(A)-2/IT/13/DCIT-1(1)/2014-15 dated 20/11/2015 on separate grounds of appeal.
2. The assessee being resident corporate entity has been assessed u/s 143(3) on 10/03/2014 at Rs.12.82 Crores after certain additions / adjustments / disallowances as against returned income of Rs.12.11 Crores e-filed by the assessee on 29/09/2011. 3.1 The assessee is aggrieved by the fact that income received by the assessee by way of rent & service charges offered as Business income has been assessed as Income from House Property. Both the representatives converge on the point that this issue was to be restored back to the file of Ld. Assessing Officer [AO] in line with the directions given by Tribunal in assessee's own case for AYs. 2008-09 to 2010-11. Upon perusal, we concur with the same. 3.2 In view of the admitted position, the matter stand remitted back to the file of Ld. AO for re-adjudication on similar lines as directed by the Tribunal in earlier AYs. For ease of reference, the relevant portion of the order of Tribunal in ITA No.3907/Mum/2016 for AY 2010-11 dated 29/08/2018 could be extracted as follows: -
6. We have considered rival submissions and perused materials on record. It is evident from facts on record that the issue whether the rent, commission and service charges received from sub-letting the premises is a recurring dispute between the parties from the past years. It is also a fact on record that in assessee's own case for assessment year 2003-04, 2004-05 and 2007-08, the Tribunal has decided this 3 ITA Nos.112 /Mum/2016 & 781/Mum/2016 M/s. Bombay Gas Company Ltd.
Assessment Year :2011-12 particular issue in favour of the department, against which the assessee has preferred appeals before the Hon'ble Jurisdictional High Court which are still pending. However, when identical dispute came up for consideration before the Tribunal in assessee's own case for assessment year 2008-09 and 2009-10 in ITA no.6212/Mum./ 2011 and others dated 7th March 2018, the Tribunal after taking cognizance of the orders of the City Civil Court, the Hon'ble Jurisdictional High Court and Estate Officer filed by way of additional evidence, restored the issue to the Assessing Officer for fresh adjudication keeping in view the additional evidences filed by the assessee. In the impugned assessment year also in course of hearing before the learned Commissioner (Appeals) the assessee had submitted similar additional evidences for consideration of the learned Commissioner (Appeals) and to impress upon the fact that by virtue of these additional evidences holding the assessee as a monthly tenant, the decision of the Tribunal in earlier assessment years cannot be followed. It is apparent on record, learned Commissioner (Appeals) has totally ignored such evidences filed by the assessee. Therefore, keeping in view the decision of the Tribunal in assessee's own case for assessment year 2008-09 and 2009-10 as referred to above, we restore the issue to the file of the Assessing Officer for de novo adjudication after due opportunity of being heard to the assessee. It is made clear, the Assessing Officer must consider all the evidences including the orders of the City Civil Court, the Hon'ble Jurisdictional High Court and the Estate Officer on merit and decide the issue accordingly. Grounds are allowed for statistical purposes."
Resultantly, the assessee's appeal stands allowed for statistical purposes.
4. So far as the ground number-1 of revenue's appeal is concerned, it is also an admitted position that this issue stood squarely covered in assessee's favor by the order of this Tribunal in assessee's own case vide common order ITA No.6212/Mum/2011 for AY 2008-09 & ITA No.1187/Mum/2013 for AY 2009-10 dated 07/03/2018 wherein similar ground was raised by the revenue. The assessee has been saddled with addition of Rs.12.50 Lacs, being 5% interest on optionally convertible debentures of Rs.250 Lacs issued by an entity namely Ultra Power Equipment Private Limited. The assessee did not credit the same to Profit & Loss account in view of the fact that the issuer had requested for 4 ITA Nos.112 /Mum/2016 & 781/Mum/2016 M/s. Bombay Gas Company Ltd.
Assessment Year :2011-12 waiver of interest. The first appellate authority deleted the same by relying upon the order of its predecessor for AYs 2008-09 & 2009-10. The perusal of the cited order of the Tribunal reveals that the stand of first appellate authority for AYs 2008-09 & 2009-10 has been confirmed. Since no distinguishing features could be noted in this AY, respectfully following the same, we dismiss this ground of appeal. 5.1 The only ground left in revenue's appeal is related with nature of certain capital gains earned by the assessee during impugned AY and applicable tax rate thereupon.
5.2 During assessment proceedings, it transpired that the assessee sold a flat situated at Haribhawan for sale consideration of Rs.11 Crores. The flat was stated to be purchased in the year 1991-92. The assessee computed Long Term Capital Gain of Rs.10.32 Crores and offered the same @20% after adjusting brought forward losses. The Ld. AO opined that the gain was to be treated as short term capital gain in terms of Section 50 since the said flat formed block of asset in the Balance Sheet. Resultantly, the gains were recomputed as Rs.10.96 Crores and the same were treated as short term in nature which attracted normal rate of income tax.
5.3 Before Ld. CIT(A), it was pointed out that the assessee never claimed depreciation against the same under the Income Tax Act although the depreciation as per The Companies Act was claimed in the books of accounts and therefore, the resultant gains were to be treated as Long Term Capital Gains only. It was also pointed out that no business activity was being carried out by the assessee in the said flat 5 ITA Nos.112 /Mum/2016 & 781/Mum/2016 M/s. Bombay Gas Company Ltd.
Assessment Year :2011-12 and it was exclusively a residential flat and not a commercial asset. The first appellate authority concurred with the stand of the assessee by observing that provisions of Section 50 were not applicable and the resultant gains were long term gains only. Aggrieved, the revenue is in further appeal before us.
5.4 Although Ld. Departmental Representative [DR] supported the stand of Ld. AO, however, the factual matrix that depreciation under the Income Tax Act was never claimed by the assessee against the flat and the said flat was never used as a commercial asset remained unrebutted. The revenue could not bring on record any material to controvert the same whereas LD. AR, drawing our attention to the computation of income for past several years, demonstrated that the depreciation was never claimed by the assessee under Income Tax Act against the said flat. This being the case, no fault could be found with the conclusions of first appellate authority. This ground stands dismissed.
6. Resultantly, the assessee's appeal stand allowed for statistical purpose whereas the revenues' appeal stand dismissed.
Order pronounced in the open court on 20th December, 2018.
Sd/- Sd/-
(C.N. Prasad) (Manoj Kumar Aggarwal)
ाियक सद / Judicial Member लेखा सद / Accountant Member मुंबई Mumbai; िदनां क Dated : 20/12/2018 Sr.PS, Jaisy Varghese 6 ITA Nos.112 /Mum/2016 & 781/Mum/2016 M/s. Bombay Gas Company Ltd.
Assessment Year :2011-12 आदे शकी ितिलिपअ!ेिषत/Copy of the Order forwarded to :
1. अपीलाथ#/ The Appellant
2. $थ#/ The Respondent
3. आयकरआयु+(अपील) / The CIT(A)
4. आयकरआयु+/ CIT- concerned
5. िवभागीय ितिनिध, आयकरअपीलीयअिधकरण, मुंबई/ DR, ITAT, Mumbai
6. गाड0 फाईल / Guard File आदे शानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकरअपीलीयअिधकरण, मुंबई / ITAT, Mumbai.