ITO, New Delhi v. M/s. Neminath Industries Pvt. Ltd., New Delhi

ITA 864/DEL/2010 | 2006-2007
Pronouncement Date: 04-05-2010 | Result: Dismissed

Appeal Details

RSA Number 86420114 RSA 2010
Assessee PAN AAACR3132K
Bench Delhi
Appeal Number ITA 864/DEL/2010
Duration Of Justice 2 month(s) 1 day(s)
Appellant ITO, New Delhi
Respondent M/s. Neminath Industries Pvt. Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 04-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 04-05-2010
Date Of Final Hearing 04-05-2010
Next Hearing Date 04-05-2010
Assessment Year 2006-2007
Appeal Filed On 03-03-2010
Judgment Text
ITA NO. 864/DEL/2010 A.Y. 2006-07 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NO. 864/DEL/2010 (A.Y. 2006-07) INCOME TAX OFFICER VS. M/S NEMINATH INDU STRIES PVT.. LTD. ROOM NO. 338 CR BUILDING I-G 1 ST FLOOR BHARAT NAGAR IP ESTATE NEW DELHI - 110002 NEW FRIENDS COLONY N EW DELHI (PAN: AAACR 3132 K) [APPELLANT] (RESPONDENT) ASSESSEE BY : SH. RAKESH GUPTA FCA DEPARTMENT BY : MS. BANITA DEVI NAREON SR. DR PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 16.12.20 09 AND PERTAINS TO ASSESSMENT YEAR 2006-07. 2. THE ISSUE RAISED IS THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO ALL OW DEDUCTION OF RS. 12 42 540/- AS ADMISSIBLE U/S 24(1) OF THE I.T. ACT 1961 HOLDING THAT THE ITA NO. 864/DEL/2010 A.Y. 2006-07 2 RENTAL INCOME RECEIVED FROM THE PROPERTY IS TO BE TAKEN AS INCOME FROM HOUSE PROPERTY. 3. IN THIS CASE THE ASSESSEE HAS SHOWN INTER-ALIA R ENTAL RECEIPT OF RS. 41 41 800/-. IN HIS COMPUTATION OF INCOME ASSE SSEE COMPANY HAD CLAIMED DEDUCTION OF RS. 12 42 540/- BEING 30% OF THE RENTAL INCOME U/S 24(1) OF THE ACT ON THE GROUND THAT THE TOTAL INCO ME EARNED BY IT WAS ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPER TY U/S 24 OF THE IT ACT. HOWEVER ASSESSING OFFICER HELD THAT INCOME DERIVED BY THE COMPANY FROM SUB-LICENSING ITS RIGHTS TO THE COMMERCIAL SP ACE HELD BY IT WOULD BE ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY HENCE DEDUCTION CLAIMED U/S 24(A) WAS DISALLOWED. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCO ME TAX (APPEALS) HELD THAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEA R 2005-06 ITAT DELHI BENCH VIDE ORDER DATED 4.9.2009 HAS HELD THAT THE S AID INCOME WAS ASSESSABLE AS INCOME FROM HOUSE PROPERTY. ACCORDIN GLY HE DIRECTED THE ASSESSING OFFICER TO ALLOW DEDUCTION OF RS. 12 42 540/- AS ADMISSIBLE U/S 24 OF THE I.T. ACT. 5. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEFO RE US. ITA NO. 864/DEL/2010 A.Y. 2006-07 3 6. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. BOTH THE COUNSELS FAIRLY AGREED THAT THE ISSUE IS COVERED I N FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CAS E IN ITA NO. 2795 FOR PRECEDING ASSESSMENT YEAR. VIDE ORDER DATED 4.9.20 09 THE TRIBUNAL HAD ADJUDICATED THE ISSUE AS UNDER:- 6. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. WE FIND THAT IT IS AN ADMITTED FACT OF THE CASE THA T THE ASSESSEE HAS OBTAINED OFFICE PREMISES ON LEASE AND SUB-LET T HE SAME AND DERIVED INCOME THEREFROM. IN THE VIEW OF THE AU THORITIES BELOW IN ORDER TO DERIVE INCOME FROM HOUSE PROPERT Y THE ASSESSEE HAS TO BE REGISTERED OWNER THEREOF. IN OU R OPINION THIS VIEW IS NOT SUSTAINABLE ON THE ANVIL OF APEX C OURT DECISION DELIVERED IN THE CASE OF C.I.T. VS. PODDAR CEMENT P VT. LTDE. IN 226 ITR 625. FURTHER THE CONTENTION THAT LETTING OUT OF OFFICE SPACE WHEN NOT REQUIRED CAN BE THE BUSINESS INCOME IS NOT SUSTAINABLE ON THE ANVIL OF DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SMARTS (P) LTD. VS. C.I.T (2008) 166 TAXMAN 53 (DELHI). IN THIS CASE IT WAS HELD THAT WHERE THE ASSESSEE IN OCCUPATION OF RENTED PREMISES SUB-LET A PORTION THEREOF AND CLAIMED THAT INCOME FROM SUCH SUB-LETT ING WAS ASSESSABLE AS BUSINESS INCOME THE DEPARTMENT WAS JU STIFIED IN ASSESSING THE SAID INCOME UNDER INCOME FROM HOUSE PROPERTY IN VIEW OF THE FACT THAT THE ASSESSEE WAS IN FULL C ONTROL IN HIS ITA NO. 864/DEL/2010 A.Y. 2006-07 4 CAPACITY AS A TENANT AND HAD EARNED INCOME BY SUB- LETTING OF THE PROPERTY. IN SITUATIONS OF THIS TYPE THERE IS NOTHING TO SUGGEST THAT OWNERSHIP OF THE PREMISES IS ESSENTIAL FOR LEVYING TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 6.1. ADHERING TO THE DOCTRINE OF THE STARE DECISES WE UPHOLD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IN THI S REGARD. 7. IN THE RESULT THIS APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/05/2010 U PON CONCLUSION OF HEARING. SD/- SD/- [RAJPAL YADAV] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE 04/05/2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES