TECHSTAR INFOTECH (INDIA) P.LTD, MUMBAI v. ITO 10(3)(3), MUMBAI

ITA 6305/MUM/2016 | 2009-2010
Pronouncement Date: 14-11-2019 | Result: Partly Allowed

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Appeal Details

RSA Number 630519914 RSA 2016
Assessee PAN AABCT7637C
Bench Mumbai
Appeal Number ITA 6305/MUM/2016
Duration Of Justice 3 year(s) 20 day(s)
Appellant TECHSTAR INFOTECH (INDIA) P.LTD, MUMBAI
Respondent ITO 10(3)(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 14-11-2019
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted E
Tribunal Order Date 14-11-2019
Last Hearing Date 28-03-2018
First Hearing Date 28-03-2018
Assessment Year 2009-2010
Appeal Filed On 25-10-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI RAJESH KUMAR ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI JUDICIAL MEMBER ITA NO.6305/M/2016 ASSESSMENT YEAR: 2009-10 M/S. TECHSTAR INFOTECH (INDIA) P. LTD. 15 BHANDUP VILLAGE ROAD NEXT TO WMI CRANES ROAD BHANDUP WEST MUMBAI 400 068 PAN: AABCT 7637C VS. ITO 15(3)(2) [ERSTWHILE ITO 10(3)(3)] MUMBAI (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI GOVIND JAVERI A.R. REVENUE BY : SHRI PRAKASH R. MANE D.R. DATE OF HEARING : 08.11.2019 DATE OF PRONOUNCEMENT : 14.11.2019 O R D E R PER RAJESH KUMAR ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 19.07.2016 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE HAS CHALLENGED IN THE VARIOUS GROUN DS OF APPEAL THE ISSUE OF REOPENING UNDER SECTION 147 REA D WITH SECTION 148 OF THE ACT TO BE BAD IN LAW AND ALSO DE CIDED THE MERIT ON ADDITION. THE ASSESSEE HAS CHALLENGED CON FIRMATION OF ADDITION OF INCOME OF RS.35 98 356/- AS HOUSE PROPE RTY INCOME BY LD. CIT(A) UPHOLDING THE ORDER OF AO. ITA NO.6305/M/2016 M/S. TECHSTAR INFOTECH (INDIA) P. LTD. 2 4. THE FACTS IN BRIEF ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO FOUND THAT ASSESSEE HAS RECEIVED A SUM OF RS.35 98 356/- FROM MTNL IN RESPECT OF THE PROPERTY QUA WHICH THE LEASE AND LICENSE AGREEMENT WAS NOT RENEWED DU E TO DISPUTE AND MTNL WAS OCCUPYING THE PREMISES EVEN AFTER THE AGREEMENT EXPIRED. THE ASSESSEE HAS ALSO FILED AN EVICTION SU IT AGAINST MTNL. THE SAID AMOUNT OF RS. 35 98 356/- WAS REMIT TED BY MTNL BY WAY OF ECS AND IT WAS DIRECTLY CREDITED TO ASSESSEES ACCOUNT AND ASSESSEE HAS NO CONTROL OVER THE FUNDS TRANSFER . THE ASSESSEE SUBMITTED THAT IT HAS NOT ACCOUNTED FO R AS RENTAL INCOME FROM THE SAID PROPERTY AS IT WOULD HAVE JEOP ARDIZE THE LEGAL RIGHTS OF THE ASSESSEE AND IT WAS SHOWN AS DE POSITS UNDER THE HEAD CURRENT LIABILITIES. THE ASSESSEE HAS A LSO NOT ACCOUNTED FOR THE TDS DEDUCTED BY MTNL. THE AO H OWEVER BRUSHED ASIDE THE CONTENTIONS OF THE ASSESSEE AND C AME TO CONCLUSION THAT THE SAID AMOUNT IS LIABLE TO BE TAX ED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND ACCORDINGLY ADD ED THE SAME TO THE INCOME OF THE ASSESSEE WHICH WAS AFFIRM ED BY LD. CIT(A) ALSO. 5. AT THE OUTSET THE LD. A.R. SUBMITTED THAT THE I DENTICAL ISSUE HAS BEEN DECIDED IN ASSESSEES OWN CASE IN ITA NO.3626/M/2017 A.Y. 2011-12 ORDER DATED 10.06.2019 WHEREBY THE SIMILAR ISSUE HAS BEEN RESTORED TO THE FILE OF THE AO TO DECIDE THE SAME IN THE LIGHT OF DECISION OF THE CO-ORDINAT E BENCH OF THE TRIBUNALS IN A.Y. 2010-11 IN ASSESSEES OWN CASE V IDE ORDER DATED 22.05.2019. THE LD. A.R. SUBMITTED THAT THE PRESENT APPEAL SHOULD ALSO BE DECIDED ON THE SAME LINES BY RESTORING THE ISSUE BACK TO THE FILE OF THE AO. ITA NO.6305/M/2016 M/S. TECHSTAR INFOTECH (INDIA) P. LTD. 3 5. THE LD. D.R. RELIED ON THE ORDER OF AUTHORITIES BELOW. 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD WE OBSERVE THAT AN IDENTICAL ISSUE HAS BEEN DECIDED IN ITA NO.3626/M/2017 A.Y. 2011-12 (SUPRA) OPERATIVE P ART IS REPRODUCED AS UNDER: 3. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. IT TRANSPIRES THAT IDENTICAL ISSUE WAS CONSIDERED BY THIS ITAT IN A.Y. 2010-11 IN ASSESSEES OWN CASE VIDE ORDER DATED 22.5.2019 FACTS OF THE CASE ARE I DENTICAL AND THE TRIBUNAL HAS SET ASIDE THE MATTER AND DIRECTED AS UNDER :- 8. WE HAV E CONSIDERED THE RIVAL SUBMISSION OF THE LANDED REPRESENTATIVE OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE HAVE ALSO DELIBERAT ED ON VARIOUS CASE LAWS RELIED BY LOWER AUTHORITIES. THE FACTS OF THE CASE THAT TH E TENANT/ LICENSEE DESPITE EFFLUX OF LEASE PERIOD ARE OCCUPYING THE TENANTED PORTION ARE NOT IN DISPUTE. THE TENANT IS REMITTING THE USER CHARGES BY WAY OF ECS. THE ASSES SEE HAS CLAIMED THAT THE PAYMENT MADE THROUGH ECS IS NOT ON ACCOUNT OF CONTR ACTUAL PAYMENT OF RENT AND NOTHING BUT PART OF MESNE PROFIT. THE ASSESSEE HAD TREATED THE SAID AMOUNT AS PART PAYMENT OF DEPOSITS OF MESNE PROFIT. THE PARTIES HA VE LOCKED THEIR HORN ON THE TAXABILITY OF RECEIPT WHETHER IT SHOULD BE TAXED A S REVENUE RECEIPT CHARGEABLE TO TAX OR IT SHOULD BE TREATED AS MESNE PROFIT BEING C APITAL RECEIPT AND NOT CHARGEABLE TO TAX. THE LEARNED AR OF THE ASSESSEE HAD STRONGLY RELIED UPON THE DECISION OF SPECIAL BENCH IN NARANG OVERSEAS PRIVATE LTD (SUPRA ) WHEREIN THE SPECIAL BENCH OF MUMBAI TRIBUNAL HELD THAT WHEN THE ASSESSEE WAS DEP RIVED OF THE USE AND OCCUPATION OF THE PROPERTY AND THEREFORE THE MESNE PROFIT RECEIVED BY THE ASSESSEE UNDER THE CONSENT DECREE AWARDED BY THE AP EX COURT AT THE RATE OF RS. 10 LAKHS P.M. WAS ON ACCOUNT OF DAMAGES FOR DEPRIVATIO N OF USE AND OCCUPATION OF THE PROFITS AND THEREFORE THE SUM SO RECEIVED WAS CAPI TAL IN NATURE NOT CHARGEABLE TO TAX. IN THE PRESENT CASE THE ASSESSEE HAS FILED ALR EADY OBTAINED A JUDGEMENT AND DECREE OF VACANT AND PEACEFUL POSSESSION OF TENANTE D PREMISES VIDES ORDER DATED 29 TH JULY 2016 PASSED BY LEARNED JUDGE OF SMALL CAUSE C OURT BOMBAY. WHILE PASSING THE JUDGEMENT IN DEGREE THE LEARNED JUDGE OF SMALL CAUSE COURT BOMBAY DIRECTED THE ASSESSEE TO INITIATE SEPARATE PROCEEDING UNDER ORDER 20 RULE 12 OF CPC FOR INQUIRY FOR RECOVERY OF MESNE PROFIT. THE SAID PROC EEDING FOR DETERMINATION OF QUANTUM OF MESNE PROFIT UNDER ORDER 20 RULE 12 OF C PC INITIATED BY ASSESSEE IS STILL PENDING. THE MAIN THRUST OF SUBMISSION OF LEARNED A R OF THE ASSESSEE WAS THAT THE ISSUE OF TAXABILITY OR OTHERWISE OF MESNE PROFIT DO ES NOT ARISE DURING THE YEAR UNDER CONSIDERATION AND ALL THE SUBMISSION OF MADE ONLY T O THE DEMONSTRATE THE FACTS THAT THE AMOUNT RECEIVED DURING THE YEAR IS TO BE A DJUSTED AGAINST MESNE PROFIT WHICH MIGHT BE AWARDED BY LEARNED SMALL CAUSE COURT IN A SEPARATE PROCEEDINGS. THEREFORE CONSIDERING THE SUBMISSION OF LEARNED AR OF THE ASSESSEE THAT THE DECISION OF LEARNED SMALL CAUSE COURT ON THE QUANTU M OF MESNE PROFIT IS AWAITED THIS GROUND OF APPEAL IS RESTORED BACK TO THE FILE OF ASSESSING OFFICER TO DECIDE THE ISSUE AFRESH AFTER TAKING IN TO CONSIDERATION OF DE CISION OF SMALL CAUSE COURT. THE ASSESSING OFFICER IS DIRECTED TO CONSIDER THE DECIS ION OF SPECIAL BENCH OF IN NARANG OVERSEAS PRIVATE LTD (SUPRA) AND PASS THE ORDER IN ACCORDANCE WITH LAW. NEEDLESS TO ITA NO.6305/M/2016 M/S. TECHSTAR INFOTECH (INDIA) P. LTD. 4 RECORD THAT ASSESSING OFFICER SHALL GRANT FAIR AND PROPER OPPORTUNITY BEFORE PASSING ORDER ON THE ISSUE. IN THE RESULT THE GROUNDS OF TH E APPEAL RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 4. RESPECTFULLY FO LLOWING THE PRECEDENT AS ABOVE I SET ASIDE THIS ISSUE TO THE FILE OF THE ASSESSING O FFICER WITH SAME DIRECTION AS ABOVE. 7. THE FACTS IN THE PRESENT CASE ARE MATERIALLY SAM E VIS--VIS THE FACTS OF THE CASE AS DECIDED BY THE CO-ORDINATE BENCH OF THE TRIBUNAL. WE THEREFORE SET ASIDE THE ISSUE TO TH E FILE OF THE AO TO DECIDE THE SAME BY RESPECTFULLY FOLLOWING THE DE CISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL. 8. THE ISSUE RAISED BY THE ASSESSEE ON REOPENING UN DER SECTION 147 READ WITH SECTION148 IS NOT BEING ADJUD ICATED AS THE ISSUE ON MERIT HAS BEEN RESTORED TO THE FILE OF THE AO. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.11.2019. SD/- SD/- ( RAM LAL NEGI) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED: 14.11.2019. * KISHORE SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT (A) CONCERNED MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASS TT. REGISTRAR ITAT MUMBAI.