THE DY CIT CEN CIR-1, MUMBAI v. M/S. ROLTA HOLDINGS & FINANCE CORPN. LTD, MUMBAI

ITA 5340/MUM/2007 | 2000-2001
Pronouncement Date: 05-07-2013 | Result: Dismissed

Appeal Details

RSA Number 534019914 RSA 2007
Assessee PAN AAACR3157L
Bench Mumbai
Appeal Number ITA 5340/MUM/2007
Duration Of Justice 5 year(s) 10 month(s) 28 day(s)
Appellant THE DY CIT CEN CIR-1, MUMBAI
Respondent M/S. ROLTA HOLDINGS & FINANCE CORPN. LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 05-07-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 05-07-2013
Date Of Final Hearing 26-03-2014
Next Hearing Date 26-03-2014
Assessment Year 2000-2001
Appeal Filed On 08-08-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI .. ! ' #$ %& ' ' ( BEFORE SHRI R.S.SYAL AM AND SHRI AMIT SHUKLA JM ITA NO.5339/MUM/2007 : ASST.YEAR 1999-2000 ITA NO.5340/MUM/2007: ASST.YEAR 2000-2001 ITA NO.5341/MUM/2007 : ASST.YEAR 2001-2002 ITA NO.5342/MUM/2007 : ASST.YEAR 2002-2003 ITA NO.5343/MUM/2007 : ASST.YEAR 2003-2004 ITA NO.5344/MUM/2007 : ASST.YEAR 2004-2005 ITA NO.5345/MUM/2007 : ASST.YEAR 2005-2006 THE DY.COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 1 MUMBAI. M/S.ROLTA HOLDINGS & FINANCE CORPORATION LIMITED UNIT NO.10 17 TH FLOOR WORLD TRADE CENTRE CUFFE PARADE COLABA MUMBAI 400 005. PAN : AAACR3157L. ( )* / // / APPELLANT) / VS. ( -.)*/ RESPONDENT) ITA NO.5346/MUM/2007 : ASST.YEAR 2004-2005 THE DY.COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 1 MUMBAI. M/S.ROLTA PROPERTIES PRIVATE LIMITED 98B MITTAL TOWERS NARIMAN POINT MUMBAI 400 021. PAN : AABCR5417N. ( )* / // / APPELLANT) / VS. ( -.)*/ RESPONDENT) CO NO.132/MUM/2011 : ASST.YEAR 1999-2000 CO NO.133/MUM/2011 : ASST.YEAR 2000-2001 CO NO.140/MUM/2011 : ASST.YEAR 2001-2002 CO NO.134/MUM/2011 : ASST.YEAR 2002-2003 CO NO.135/MUM/2011 : ASST.YEAR 2003-2004 CO NO.136/MUM/2011 : ASST.YEAR 2004-2005 CO NO.137/MUM/2011 : ASST.YEAR 2005-2006 M/S.ROLTA HOLDINGS & FINANCE CORPORATION LIMITED UNIT NO.10 17 TH FLOOR WORLD TRADE CENTRE CUFFE PARADE COLABA MUMBAI 400 005. THE DY.COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 1 MUMBAI. ( -.( / // / CROSS OBJECTOR) / VS. ( -.)*/ RESPONDENT) ITA NO.5339/MUM/2007. M/S.ROLTA HOLDINGS & FINANCE CORPN.LTD. 2 / / / / 0 00 0 1 1 1 1 / REVENUE BY : SHRI RAJESH RANJAN PRASAD (CIT-DR) ' 2$ ' 2$ ' 2$ ' 2$ 0 1 0 1 0 1 0 1 / ASSESSEES BY : SHRI DEEPAK TRALSHAWALA 0 $! / / / / DATE OF HEARING : 05.07.2013 345 0 $! / DATE OF PRONOUNCEMENT : 05.07.2013 ' % ' % ' % ' % / / / / O R D E R PER BENCH : THIS BATCH OF 15 APPEALS RELATING TO TWO DIFFERENT BUT CONNECTED ASSESSES COMPRISE OF EIGHT APPEALS BY THE REVENUE A ND SEVEN CROSS OBJECTIONS BY THE ASSESSEE. SINCE COMMON ISSUE IS R AISED IN THESE APPEALS WE ARE PROCEEDING TO DISPOSE THEM OFF BY T HIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST OF ALL WE ARE TAKING UP THE APPEAL BY THE REVENUE CONCERNING M/S.ROLTA HOLDINGS & FINANCE CORPORATION LIMITED IN ITA NO.5339/MUM/2007 ARISING OUT OF THE ORDER PASSE D BY THE CIT(A) ON 21.05.2007 IN RELATION TO THE ASSESSMENT YEAR 1999-2000. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE GROUP WAS SEARCHED U/S 132 ON 12.08.2004. NOTICE U/S 153A WAS ISSUED FOR FILING THE RETURNS. THE ASSESSEE FILED LETTER REQUE STING TO TREAT THE RETURN FILED FOR ASSESSMENT YEAR 1999-2000 ON 11.11 .1999 AS A RETURN IN RESPONSE TO NOTICE U/S 153A. DURING THE COURSE O F ASSESSMENT PROCEEDINGS IT WAS NOTICED BY THE A.O. THAT THE AS SESSEE HAD SHOWN INCOME FROM BUSINESS CENTRE AMOUNTING TO ` 14 10 000 AS `BUSINESS ITA NO.5339/MUM/2007. M/S.ROLTA HOLDINGS & FINANCE CORPN.LTD. 3 INCOME. THE ASSESSEE WAS CALLED UPON TO EXPLAIN AS TO WHY THIS INCOME DERIVED FROM PROPERTIES GIVEN ON RENT SHOULD NOT BE ASSESSED UNDER THE HEAD `INCOME FROM HOUSE PROPERTY. IN TH E MEANTIME THE ASSESSEE FILED AN APPLICATION WITH THE ADDL. COMMIS SIONER OF INCOME-TAX ON 26.12.2006 SEEKING DIRECTIONS U/S 144 A ON THIS ISSUE. THE RELEVANT DIRECTIONS WERE ISSUED ON THE BASIS OF WHICH THE ASSESSING OFFICER FRAMED THE PRESENT ASSESSMENT BY TREATING SUCH INCOME AS FALLING UNDER THE HEAD `INCOME FROM HOUSE PROPERTY. THIS VIEW WAS CANVASSED BY THE ASSESSING OFFICER FOLLOWI NG THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF SHAMBHU INVESTMENT (P) LTD. V. CIT [(2003) 263 ITR 143 (SC)] . AS A RESULT OF THIS TREATMENT GIVEN TO THE RENTAL INCOME THE DEDUCTION CLAIMED BY THE ASSESSEE TOWARDS DEPRECIATION AND OTHER EXPENSES CAME TO BE DISALLOWED. IN THE APPEAL FILED BY THE ASSESSEE THE LEARNED CIT(A ) REVERSED THE VIEW TAKEN BY THE ASSESSING OFFICER AND HELD SUCH INCOME TO BE FALLING UNDER THE HEAD `PROFITS AND GAINS OF BUSINESS OR PR OFESSION. AS A NATURAL CONSEQUENCE THE DEDUCTIONS PERMISSIBLE UND ER CHAPTER IV-D WERE DIRECTED TO BE ALLOWED. THE REVENUE HAS COME U P IN APPEAL AGAINST THIS ACTION. 4. AT THE VERY OUTSET THE LEARNED DEPARTMENTAL REP RESENTATIVE SUBMITTED THAT SEARCH ACTION WAS TAKEN AGAINST ROLT A GROUP. SOME OF THE APPEALS OF THIS GROUP CAME TO BE DECIDED BY THE TRIBUNAL IN WHICH SIMILAR VIEW TAKEN BY THE LEARNED CIT(A) HAS BEEN R EVERSED BY HOLDING THAT INCOME FROM LETTING OF PROPERTIES SHOU LD BE CONSIDERED AS FALLING UNDER THE HEAD `INCOME FROM HOUSE PROPER TY. THE LEARNED ITA NO.5339/MUM/2007. M/S.ROLTA HOLDINGS & FINANCE CORPN.LTD. 4 DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE APPE ALS OF THE INSTANT ASSESSEE NAMELY M/S. ROLTA PROPERTIES PRIVATE LI MITED FOR THE ASSESSMENT YEARS 2000-2001 TO 2003-2004 WERE ALSO C ONSIDERED AND DECIDED IN THAT BATCH BY THE TRIBUNAL. IT WAS THE REFORE PRAYED THAT SIMILAR VIEW BE TAKEN IN THESE APPEALS AS WELL. ON A POINTED QUERY THE LEARNED AR ADMITTED THAT THE TRIBUNAL IN ITA NO .4260 TO 4270/MUM/2007 HAS DECIDED THE APPEALS OF M/S. ROLTA PROPERTIES PRIVATE LIMITED AND M/S. ROLTA RESOURCES PRIVATE LI MITED BY WAY OF EX PARTE ORDER PASSED ON 4 TH MARCH 2009. HE PLACED ON RECORD A COPY OF THIS ORDER BY STATING THAT THOUGH THE ISSUE RAIS ED IN THE PRESENT BATCH OF APPEALS IS SIMILAR TO THAT DECIDED BY THE TRIBUNAL IN ITS EARLIER ORDER BUT SUCH ORDER SHOULD NOT BE FOLLOWED AS IT WAS PASSED WITHOUT THE ASSISTANCE COMING FROM THE SIDE OF THE ASSESSEE . IT WAS FURTHER ADMITTED THAT A MISCELLANEOUS APPLICATION WAS FILED AGAINST THE ORDER DATED 4 TH MARCH 2009 WHICH MET WITH THE FATE OF DISMISSAL. ON A PERTINENT QUERY IT WAS ACCEPTED THAT THE SAID ORDE R HAS ATTAINED FINALITY. HOWEVER THE LEARNED AR CHOSE TO RELY ON AN ORDER PASSED BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF HARVINDARPAL MEHTA (HUF) V. DCIT [(2009) 122 TTJ (MUMBAI) 163] IN WHICH IT HAS BEEN HELD THAT THE RECEIPT FROM THE BUSINESS CENTRE BE T AXED AS `BUSINESS INCOME. HE ALSO BROUGHT TO OUR NOTICE THE FACT THA T THIS ORDER PASSED BY THE TRIBUNAL HAS BEEN APPROVED BY THE HONBLE BO MBAY HIGH COURT IN CIT V. HARVINDARPAL MEHTA (HUF) BY DISMISSING THE APPEAL FILED BY THE REVENUE HOLDING THAT NO SUBSTANTIAL QU ESTION OF LAW AROSE FROM THE ORDER. HE ALSO RELIED ON CERTAIN OTHER ORD ERS TO BRING HOME ITA NO.5339/MUM/2007. M/S.ROLTA HOLDINGS & FINANCE CORPN.LTD. 5 THE POINT THAT THE INCOME FROM HOUSE PROPERTY IN TH E PRESENT CASE SHOULD BE CONSIDERED AS BUSINESS INCOME. 5. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD IT IS CLEAR THAT THE QUESTION A S TO WHETHER INCOME FROM LETTING OUT SHOULD BE CONSIDERED AS HOUSE PROP ERTY INCOME OR BUSINESS INCOME HAS BEEN ANSWERED BY THE TRIBUNAL I N ITS EARLIER ORDER DATED 04.03.2009. SOME OF THE APPEALS OF M/S. ROLTA PROPERTIES PRIVATE LIMITED WERE ALSO DISPOSED OFF BY THE TRIBU NAL AND THE OTHER APPEALS ARE PART OF THE PRESENT BATCH. FROM THAT OR DER IT CAN BE SEEN THAT THAT THE ASSESSMENTS WERE MADE U/S 153C READ W ITH SECTION 153A. THEREIN ALSO THE ASSESSEE SOUGHT DIRECTIONS FROM THE ADDL.CIT U/S 144A. AFTER CONSIDERING THE ISSUE AT LENGTH TH E TRIBUNAL HAS HELD THAT THE RENTAL INCOME SHOULD BE ASSESSED UNDER THE HEAD `INCOME FROM HOUSE PROPERTY AND NOT AS `INCOME FROM BUSINE SS. RESULTANTLY THE ENTITLEMENT TO ANY DEDUCTION FOR DEPRECIATION A ND OTHER EXPENSES WAS ALSO HELD TO BE NOT AVAILABLE. IT HAS BEEN FAIR LY ADMITTED THAT THE FACTS AND CIRCUMSTANCES OF THE PRESENT APPEALS ARE IDENTICAL TO THOSE DECIDED BY THE TRIBUNAL. SINCE IDENTICAL ISSUE HAS ALREADY BEEN DECIDED BY A COORDINATE BENCH OF THE TRIBUNAL IT I S DIFFICULT FOR US TO HOLD A CONTRARY VIEW ON SIMILAR SET OF FACTS. AS SU CH WE ARE NOT PERSUADED TO REGISTER A DEPARTURE FROM THE VIEW ALR EADY EXPRESSED BY THE TRIBUNAL IN ASSESSEES OWN CASE AND OTHER GROUP CONCERNS. INSOFAR AS THE RELIANCE OF THE LEARNED AR ON THE ORDER IN T HE CASE OF HARVINDARPAL MEHTA (HUF) (SUPRA) IS CONCERNED WE FIND THAT THE SAME CANNOT ADVANCE HIS CASE IN ANY MANNER. THE QUE STION AS TO ITA NO.5339/MUM/2007. M/S.ROLTA HOLDINGS & FINANCE CORPN.LTD. 6 WHETHER INCOME FROM RENT SHOULD BE CONSIDERED AS IN COME FROM HOUSE PROPERTY OR BUSINESS INCOME LARGELY DEPENDS U PON THE FACTS AND CIRCUMSTANCES OF EACH CASE. THERE IS NO STRAIT JACK ET FORMULA PRESCRIBED FOR CATEGORIZING INCOME UNDER ONE HEAD O R OTHER. WHEN THE FACTS OF THE APPEALS IN THIS BATCH HAVE ALREADY BEEN CONSIDERED AND DECIDED BY THE TRIBUNAL IN ITS EARLIER ORDER I T IMPLIES THAT THE FACTS OF THE OTHER CASE NAMELY HARVINDARPAL MEHTA (HUF) ARE DIFFERENT. WE THEREFORE OVERTURN THE IMPUGNED ORD ER AND HOLD THAT THE RENTAL INCOME BE ASSESSED AS `INCOME FROM HOUSE PROPERTY AND CONSEQUENTLY NO DEDUCTION CAN BE ALLOWED TOWARDS DE PRECIATION ON PROPERTY AND OTHER ADMINISTRATIVE EXPENSES. 6. THE FACTS AND CIRCUMSTANCES OF ALL OTHER APPEALS BY THE REVENUE ARE ADMITTEDLY SIMILAR. FOLLOWING THE VIEW TAKEN HE REINABOVE WE HOLD THAT IN ALL THESE APPEALS BEFORE US THE RENTA L INCOME SHOULD CONSIDERED AS `INCOME FROM HOUSE PROPERTY AND NOT AS `BUSINESS INCOME AND FURTHER NO DEDUCTION FOR DEPRECIATION ALLOWANCE OR OTHER ADMINISTRATIVE EXPENSES SHOULD BE ALLOWED. 7. M/S. ROLTA HOLDINGS AND FINANCE CORPORATION LIMI TED HAS FILED CROSS OBJECTIONS FOR THE ASSESSMENT YEARS 1999-2000 TO 2005-2006. ALL THESE CROSS OBJECTIONS HAVE BEEN FILED BELATEDL Y BY 1439 DAYS. A COMMON GROUND HAS BEEN TAKEN IN ALL THESE CROSS OBJ ECTIONS TO THE EFFECT THAT NO ADDITION COULD HAVE BEEN MADE IN THE ORDERS PASSED BY THE A.O. U/S 153A READ WITH SECTION 143(3) BECAUSE NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. THE LEARNED AR SUBMITTED THAT THIS ISSUE GOES TO THE ROOT OF THE M ATTER. THE REASON FOR ITA NO.5339/MUM/2007. M/S.ROLTA HOLDINGS & FINANCE CORPN.LTD. 7 THE DELAY IN FILING THE CROSS OBJECTIONS WAS EXPLAI NED AS A SUBSEQUENT FAVORABLE ORDER PASSED BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ALL CARGO GLOBAL LOGISTIC LIMITED V. DCIT [(2012) 1 37 ITD 238 (MUM.) (SB)]. THE LEARNED DEPARTMENTAL REPRESENTATIVE OBJECTED TO THE LATE FILING OF THE CROSS OBJECTIONS . HE SUBMITTED THAT THE ISSUE NOW SOUGHT TO BE RAISED DOES NOT ARISE EI THER OUT OF THE ASSESSMENT ORDERS OR THE IMPUGNED ORDERS. HE URGED THAT SUCH A DELAY OF AROUND FOUR YEARS MAY NOT BE CONDONED. 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD IT IS NOTICED THAT THE SE CROSS OBJECTIONS WERE FILED BY THE ASSESSEE ON 16.08.2011 CHALLENGIN G THE JURISDICTION OF THE ASSESSING OFFICER TO PASS ORDER U/S 153A REA D WITH SECTION 143(3) WHEN NO INCRIMINATING MATERIALS WERE FOUND D URING THE COURSE SEARCH. THE REASON FOR LATE FILING OF THE CROSS OBJ ECTIONS HAS BEEN STATED TO BE THE SUBSEQUENT FAVORABLE SPECIAL BENCH ORDER PASSED IN THE CASE OF ALL CARGO GLOBAL LOGISTIC LIMITED (SUPRA) . WE ARE NOT INCLINED TO ACCEPT THIS AS A REASONABLE CAUSE FOR T HE DELAY BECAUSE THE SPECIAL BENCH ORDER WAS PASSED ON 6 TH JULY 2012 AS AGAINST THE DATE OF FILING OF THE INSTANT CROSS OBJECTIONS OF 16.08. 2011. OBVIOUSLY THE BENEFIT OF SUCH SPECIAL BENCH ORDER CAN BE AVAILABL E ONLY AFTER THE DATE OF ITS PASSING AND NOT BEFORE THAT. AS SUCH W E ARE NOT SATISFIED WITH THE JUSTIFICATION FOR THE DELAY OF AROUND FOUR YEARS IN PRESENTING THESE CROSS OBJECTIONS. RESULTANTLY THE DELAY IS N OT CONDONED AND THE CROSS OBJECTIONS ARE ACCORDINGLY DISMISSED. ITA NO.5339/MUM/2007. M/S.ROLTA HOLDINGS & FINANCE CORPN.LTD. 8 9. 2 $6 / 0 7 $ 8 0 /$ 9: -.( !2/ 0 /$ 9: IN THE RESULT REVENUES APPEALS ARE ALLOWED AND AS SESSEES CROSS OBJECTIONS ARE DISMISSED. ORDER PRONOUNCED ON THIS 05 TH DAY OF JULY 2013. ' % 0 345 ;' 6 4 0 < SD/- SD/- (AMIT SHUKLA) (R.S.SYAL) ' ' ' ' ' ' ' ' / JUDICIAL MEMBER ! ' ! ' ! ' ! ' / ACCOUNTANT MEMBER MUMBAI ; ;' DATED : 05 TH JULY 2013. DEVDAS* ' % 0 -'$#= > =5$ ' % 0 -'$#= > =5$ ' % 0 -'$#= > =5$ ' % 0 -'$#= > =5$/ COPY OF THE ORDER FORWARDED TO : 1. )* / THE APPELLANT 2. -.)* / THE RESPONDENT. 3. ? () / THE CIT MUMBAI. 4. ? / CIT(A) CENTRAL-I MUMBAI 5. =B< -'$' / DR ITAT MUMBAI 6. < C / GUARD FILE. ' % ' % ' % ' % / BY ORDER .=$ -'$ //TRUE COPY// D D D D/ // /9 / 9 / 9 / 9 / ( DY./ASSTT. REGISTRAR) / ITAT MUMBAI