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04-09-2019, Amazia Developers, Section 263, 80IA(4), Tribunal Mumbai

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1 week 2 days ago #10707 by amit
Section - 263, 80IA(4), 80IA(4)(iii), 154
Order Date - 04-09-2019
Favouring - Revenue
Court - Tribunal Mumbai
Appellant - Amazia Developers Pvt. Ltd.
Respondent - DCIT
Justice - SAKTIJIT DEY JM & G. MANJUNATHA AM
Citation - 919Taxpundit37
Appeal No. - ITA no.2498/Mum./2017
Asstt. Year - 2010–11

Order

PER : SAKTIJIT DEY, J.M.

These are two appeals relating to the same assessee pertaining to the assessment year 2010–11. While Revenue’s appeal is against the order dated 12th April 2017, passed by the learned Commissioner of Income Tax (Appeals)–2, Mumbai, the appeal filed by the assessee arises out of the order passed by the learned Commissioner of Income Tax under section 263 of the Income- ax Act, 1961 (for short "the Act").

ITA no.5348/Mum./2017
Revenue’s Appeal

2. As stated earlie , this appeal arises out of the consequential order passed by the Assessing Officer in pursuance to the directions of learned Commissioner of Income Tax (CIT) under section 263 of the Act.

3. In ground no.1, the Revenue has challenged the decision of learned Commissioner (Appeals) in treating the lease rental income as income under the head business and profession instead of income from house property.

4. Brief facts are, the assessee company is engaged in the business of buying and running infrastructure facilities and property development. For the assessment year under consideration, the assessee filed its return of income on 15th October 2010 declaring loss of ` (–) 15,11,29,677. In the Books of Account as well as in the return of income filed, the assessee treated the lease rental income earned of ` 8,57,92,855, as income from business and after claiming various expenses, declared net loss of ` 4,92,46,770 While completing the assessment under section 143(3) of the Act vide order dated 16th March 2013, the Assessing Officer accepted the loss declared by the assessee. The assessment order passed, as aforesaid, was subjected to proceedings under section 263 of the Act by learned CIT as he was of the view that the assessment order is erroneous and prejudicial to the interest of Revenue due to non–consideration of the following issues:–

i) Interest expenditure should have been disallowed due to non–deduction of tax at source;

ii) Income of ` 76,00,850, on account of difference in total income as per Profit & Loss account and computation of income was not assessed to tax;

iii) Rental income was assessed as business income instead of income from house property thereby resulting in allowance of various expenses.

Thus, on the aforesaid basis, learned CIT ultimately held the assessment order to be erroneous and prejudicial to the interests of Revenue and set it aside with a direction to the Assessing Officer to frame a fresh assessment order in accordance with his observations. In pursuance to the direction of learned CIT, the Assessing Officer framed a fresh assessment, wherein, he treated the lease rental income received by the assessee as income from house property.

5. Being aggrieved with the aforesaid decision of the Assessing Officer, the assessee preferred appeal before the first appellate authority.

6. The learned Commissioner (Appeals), after considering the submissions of the assessee in the context of facts and material on record, observed that the lease rental income was received by the assessee from Information Technology park (IT Park) situated at Andheri, Mumbai, which was purchased by the assessee from Ackruti City Ltd. He observed, the said IT park has been notified as an infrastructure facility for claiming deduction under section 80IA(4) of Act at the hands of the earlier owner and the said benefit was not passed on to the assessee. He further observed, the assessee had been consistently offering the lease rental income received from the IT park as income from business and the Department has accepted the claim of the assessee in assessments completed under section 143(3) of the Act. He further observed, while deciding the issue in assessment year 2012–13, he has accepted assessee’s claim of lease rental income as business income. Thus, following his own order for the assessment year 2012–13, he held that the lease rental income received by the assessee should be treated as income from business.

7. The learned Departmental Representative relying upon the observations of the Assessing Officer submitted, since the assessee has earned the lease rental income as the owner of the property, it has to be assessed as income from house property.

8. The learned Authorised Representative strongly supporting the reasoning of learned Commissioner (Appeals) submitted, the assessee has been consistently offering the lease rental income as income from business in the past as well as subsequent assessment years and the Department has always accepted assessee’s claim. He submitted, only in the year under consideration, learned CIT has raised the issue of

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