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2017 (7) TMI 1371 - ITAT MUMBAICorrect head of income - License Fees receipt - 'Profits and Gains of Business or Profession' or "Income from House Property" - HELD THAT:- When it remains as a matter of fact that the income from the composite letting of the furnished flats by the assessee, had after thorough vetting and scrutinizing consistently accepted and assessed as 'business income' by the department in the earlier years while framing regular assessments, therefore, in the absence of any new facts emerging during the year under consideration, which could irrefutably dislodge the aforesaid view and therein justify a view to the contrary, such an inconsistent approach on the part of the A.O would not be permissible. Reliance placed by the department on the judgment of H.A. Shah and Co. v. CIT [1955 (9) TMI 53 - BOMBAY HIGH COURT] is distinguishable on facts whrein upheld the view arrived at by the A.O, for the reason that during the year under consideration certain documents justifying taking of such contrary view were made available on record - unlike the facts involved in the case before the Hon'ble High Court, now when in the case of the present assessee no such material had therein emerged which could go to justify taking of an inconsistent view by the A.O, therefore, the income received by the assessee from composite letting of furnished flats on the basis of same facts as were there before him in the preceding years, cannot be permitted to be assessed during the year under the head 'Income from house property'. Except for raising of oral averments, no material had been brought to our notice by the ld. D.R which could persuade us to subscribe to the claim of the department that certain new facts had emerged during the year under consideration, which clearly militated against the validity and legality of assessing of the composite rental receipts under the head 'business income' in the preceding years, and would thus justify a departure from the consistent approach that had been adopted by the department at stretch for years. We thus in the backdrop of our aforesaid observations, thus set aside the order of the CIT(A) and therein hold that the composite rental receipts were liable to be assessed, as claimed by the assessee in her return of income, as her 'business income'. The Ground of appeal No. I is allowed. Depreciation Disallowance on fully furnished flats - Whether once the flats are used for the purposes of the business of composite letting, they form part of the block of assets and in view of Explanation 5 to section 32, allowance of depreciation is mandatory and hence cannot be disallowed? - HELD THAT:- Composite rental receipts are liable to be assessed as the 'business income' of the assessee, therefore the assailing of the disallowance of depreciation by the assessee is rendered as consequential. We thus direct the A.O to allow the claim of the assessee towards claim of depreciation. The Ground of appeal No. II being consequential to our adjudication of the head of income under which the composite letting receipts were liable to be assessed, is thus allowed.
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