DISCOVERY ESTATES PVT. LTD., NEW DELHI v. ACIT, CIRCLE- 7(2), NEW DELHI

ITA 6936/DEL/2017 | 2013-2014
Pronouncement Date: 26-03-2021 | Result: Dismissed

Appeal Details

RSA Number 693620114 RSA 2017
Assessee PAN AABCD4163D
Bench Delhi
Appeal Number ITA 6936/DEL/2017
Duration Of Justice 3 year(s) 4 month(s) 6 day(s)
Appellant DISCOVERY ESTATES PVT. LTD., NEW DELHI
Respondent ACIT, CIRCLE- 7(2), NEW DELHI
Appeal Type Income Tax Appeal
Pronouncement Date 26-03-2021
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 26-03-2021
Last Hearing Date 30-04-2020
First Hearing Date 30-04-2020
Assessment Year 2013-2014
Appeal Filed On 20-11-2017
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI O.P. KANT ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE JUDICIAL MEMBER [THROUGH VIDEO CONFERENCING] ITA NO.6936/DEL./2017 ASSESSMENT YEAR: 2013-14 M/S. DISCOVERY ESTATES PVT. LTD. 17-B MGF HOUSE ASAF ALI ROAD NEW DELHI VS. ACIT CIRCLE-7(2) NEW DELHI PAN :AABCD4163D (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT AM: THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 31 ST AUGUST 2017 PASSED BY THE LEARNED COMMISSIONER OF INCOME-T AX (APPEALS)-43 NEW DELHI [IN SHORT THE LEARNED CIT( A)] FOR ASSESSMENT YEAR 2013-14 RAISING THE FOLLOWING GROUN DS: GROUND NO. 1: THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-32 NE W DELHI [HEREINAFTER REFERRED TO AS CIT(A)] HAS ERRED ON FACTS AND IN LAW IN PASSING THE ORDER DATED 31.08.2017 UNDER SECTION 25 0 OF THE INCOME TAX ACT 1961(HEREINAFTER REFERRED TO AS THE ACT) APPELLANT BY NONE RESPONDENT BY SHRI RAJESH KUMAR SR.DR DATE OF HEARING 18.03.2021 DATE OF PRONOUNCEMENT 26.03.2021 2 ITA NO.6936/DEL./2017 GROUND NO. 2: THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN HOLDING THAT THE ASSESSING OFFICER IS CORRECT IN TREATING THE RENTAL INCOME EA RNED OF BY THE APPELLANT FROM COMMERCIAL PROPERTIES AS INCOME UNDER THE HEAD HOUSE PROPERTY INSTEAD OF INCOME FROM BUSINESS INCOME. GROUND NO. 3: THE APPELLANT PRAYS THAT HE MAY BE ALLOWED TO ADD AMED ALTER OR FOREGO ANY OF THE ABOVE GROUNDS OF APPEAL AS THE CI RCUMSTANCES MAY WARRANT. GROUND 4: THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTH ER. 2. THE FACTS IN BRIEF OF THE CASE ARE THAT THE ASSESSE E WAS ENGAGED IN THE BUSINESS OF CONSTRUCTION OF THE COMM ERCIAL COMPLEX AND ALSO EARNING RENTAL INCOME. THE RETURN OF INCOME WAS FILED BY THE ASSESSEE FOR THE YEAR UNDER CONSID ERATION ON 13.09.2014 DECLARING INCOME OR RS.2 67 02 200/-. T HE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT UNDER SECTION 143(3) OF THE INCOME-TAX ACT 1961 (IN SHORT THE ACT) WAS COMPL ETED AFTER TREATING THE RENTAL INCOME UNDER THE HEAD INCOME F ROM HOUSE PROPERTY INSTEAD OF INCOME UNDER THE HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSION OFFERED BY THE ASSESSEE IN THE RETURN OF INCOME. 2.1 IN FURTHER APPEAL THE LEARNED CIT(A) FOLLOWING T HE FINDING OF THE HONBLE DELHI HIGH COURT IN THE CASE OF ASSESSE E ITSELF PASSED IN EARLIER YEARS UPHELD THE FINDING OF THE ASSESSI NG OFFICER. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE TRI BUNAL RAISING THE GROUNDS AS REPRODUCED ABOVE. 3. BEFORE US NONE REPRESENTED ON BEHALF OF THE ASSES SEE DESPITE INFORMING THE DATE OF THE HEARING IN THE OP EN COURT ON 16.03.2021. NO ADJOURNMENT APPLICATION WAS ALSO FIL ED IN VIEW OF 3 ITA NO.6936/DEL./2017 THE FACT THE CASE WAS HEARD EX-PARTE QUA THE ASSES SEE AFTER HEARING THE LEARNED DR. 4. WE HAVE HEARD THE LEARNED DR AND PERUSED THE RELEVA NT MATERIAL ON RECORD. IN THE CASE THE ISSUE IN DISPU TE IS REGARDING THE HEAD UNDER WHICH RENTAL INCOME IS TO BE TAXED. THE ASSESSEE IS EARNING RENTAL INCOME FROM COMMERCIAL MALLS AND OFFERED THE SAME UNDER THE HEAD PROFIT AND GAINS OF BUSINESS O R PROFESSION. THE RENTAL INCOME HAS BEEN GENERATED FROM COMMERCIA L UNITS WHICH REMAINED UNSOLD AND WERE HELD AS STOCK IN TRA DE IN DESIRE OF ACCEPTABLE SALE PRICE. THE ASSESSING OFFICER HAS TAXED THE SAID RENTAL/LEASE INCOME UNDER THE HEAD INCOME FROM HOU SE PROPERTY. 4.1 IDENTICAL ISSUE WAS RAISED BY THE ASSESSING OFFICE R IN ASSESSMENT YEARS 2006-07 AND 2007-08. THE ISSUE FUR THER TRAVELLED UP TO THE HONBLE DELHI HIGH COURT. THE H ONBLE DELHI HIGH COURT IN ITS JUDGMENT DATED 18.02.203 REPORTE D IN 356 ITR 159 IN ITA NO. 1089/2011 AND ITA NO. 1090/2011 HA S DIRECTED TO TREAT THE RENTAL INCOME EARNED BY THE ASSESSEE F ROM COMMERCIAL PROPERTIES AS INCOME UNDER THE HEAD HOU SE PROPERTY INSTEAD OF INCOME FROM BUSINESS OR PROFESSION. THE LEARNED CIT(A) HAS EXTRACTED THE DECISION OF THE HONBLE DELHI HIG H COURT IN THE IMPUGNED ORDER IN PARAS 4.5.6 WHICH IS REPRODUCED AS UNDER: 2. THE APPEALS ARE BY THE REVENUE. ITA NOS.1089/20 11 AND 1090/2011 RELATE TO THE SAME ASSESSEE I.E. DISCOVER Y ESTATES PVT. LTD. AND ITA N0.1097/2011 RELATES TO ANOTHER COMPAN Y OF THE SAME GROUP BY NAME DISCOVERY HOLDINGS PVT. LTD. ON 13.02 .2012 THE FOLLOWING SUBSTANTIAL QUESTIONS OF LAW WERE FRAMED BY THIS COURT IN ALL THE THREE APPEALS: (I) WHETHER THE INCOME TAX APPELLATE TRIBUNAL WAS RIGHT IN HOLDING THAT THE RENTAL INCOME SHOULD BE ASSESSED UNDER THE HEAD 'INCOME 4 ITA NO.6936/DEL./2017 FROM BUSINESS' AND NOT UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY'? (II) WHETHER THE INCOME TAX APPELLATE TRIBUNAL WAS RIGHT IN HOLDING THAT THE SALE CONSIDERATION DISCLOSED BY THE ASSESS EE ON SALE OF SHOPS SHOULD BE ACCEPTED? (III) WHETHER THE FINDINGS RECORDED BY THE INCOME T AX APPELLATE TRIBUNAL IN RESPECT OF THE QUESTION NUMBER (II) ARE PERVERSE?' 3. IT IS COMMON GROUND THAT THE FIRST SUBSTANTIAL Q UESTION OF LAW IS TO BE ANSWERED IN THE NEGATIVE IN FAVOUR OF THE REVEN UE AND AGAINST THE ASSESSEE IN VIEW OF THE JUDGMENT OF THIS COURT IN CIT VS. M/S ANSAL HOUSING FINANCE AND LEASING CO. LTD. &ORS. DE CIDED ON 31.10.02012 IN ITA 18/1999. 4.2 AS THE LEARNED CIT(A) HAS FOLLOWED THE BINDING PRE CEDENT IN THE CASE OF THE ASSESSEE ITSELF WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LEARNED CIT(A) ON THE ISSUE IN DISPUTE AND ACCORDINGLY UPHOLD THE SAME. THE GROUNDS OF THE APP EALS ARE DISMISSED. 5. IN RESULT THE APPEAL OF THE ASSESSEE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH MARCH 2021 SD/- SD/- ( SUCHITRA KAMBLE ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 26 TH MARCH 2021. RK/- (DTDS) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR ITAT NEW DELHI