TMI Blog2014 (12) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... F Centre [2014 (3) TMI 500 - ITAT DELHI] - the partnership deed has mentioned not only the setting up of the commercial complex for sale but also mentioned for letting out and earning rental income - That it is a common practice that the partnership deed or a memorandum of association of the company are drafted covering large number of activities but which of several activities mentioned in the partnership deed or memorandum of association is carried on by the assessee will be relevant for the purpose of assessment under the Income Tax Act - the assessee owns a commercial complex for letting out and earning rental income than merely because the partnership also permits the assessee to sale the commercial complex will not change the nature of rental income - the rental income from a building is to be assessed under the head income from house property – thus, the order of the CIT(A) is upheld – Decided against revenue. Allowance of expenditure from income from other sources u/s 57(iii) – Whether the assessee could not prove that such expenditure was expended wholly & exclusively for the purpose of earning such income – Held that: CIT(A) was rightly of the view that the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the similar issue has been considered by the ITAT in the case of ACIT Vs. Atria Partners vide ITA No.2490/Del/2012 and ACIT Vs. Plaza Partners vide ITA No.1265/Del/2012 and 695/Del/2013. He submitted that those concerns are also entities of the DLF Group and the facts are identical. He, therefore, submitted that the order of learned CIT(A) should be sustained. 4. Learned DR, on the other hand, fairly admitted that the facts in the case of the assessee are more or less similar to the facts in the case of Atria Partners (supra) and Plaza Partners (supra) except one major difference. He further submitted that during the accounting year relevant to the assessment year 2008-09, there was change in the constitution of the assessee firm and the Assessing Officer has referred to the partnership deed wherein it was mentioned that the partners of the firm agreed to continue to carry on the business of setting up of commercial complex for sale or for letting out etc. Thus, as per partnership firm, the primary business of the assessee is of setting up of commercial complex for sale. In view of the above decision of ITAT in the cases of Atria Partners (supra) and Plaza Partners (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This ground of appeal is accordingly allowed. 7. After considering the arguments of both the sides and the facts of the case, we do not find any infirmity in the above conclusion of the learned CIT(A). The assessee is owner of one building which was let out from past several years. The asset which is let out is held as investment and not as stock in trade. In all the preceding years, rental income is shown as income from house property and which has been accepted by the Revenue as such. The learned DR has argued at the time of hearing before us that rule of res-judicata does not apply to income tax proceedings. It is true that the rule of res-judicata does not apply to income tax proceedings but, at the same time, the rule of consistency does apply. When the facts are similar and rental income from the same property is accepted as income from house property in the preceding years, there cannot be any justification to treat the rental income as business income in the year under consideration without there being any change in the facts or in law. Moreover, The assessee is not carrying on any activity which can be said to be in the nature of business activity. It is simply receivi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no change in the facts, situation or in law. Hence, the Revenue cannot be allowed to adopt a different stand. This is also reiterated by the Hon ble Apex Court decision in CIT vs. Excel Industries Ltd. in Civil Appeal No. 125 of 2013 vide order dated 08.10.2013. In this case, it was held that when in earlier asstt. Years the revenue accepted the order of the Tribunal in favour of the assessee, then Revenue cannot be allowed to flip flop on the issue and it ought let the matter rest rather than spend the tax payers money in pursuing litigation for the sake of it. 8. In the background of the aforesaid discussions and precedents, we do not find any infirmity in the order of the Ld. CIT(A). Accordingly, we uphold the same. 8. Similar view is taken by ITAT F Bench in the case of Plaza Partners (supra). Learned DR also fairly stated that the facts in the case of the assessee and facts in the case of Atria Partners (supra) and Plaza Partners (supra) are more or less similar. He tried to distinguish the above two cases on the ground that in the case under appeal before us, the Assessing Officer has referred to the partnership deed which mentions as under:- That the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... os.1 2 of the Revenue s appeal are rejected. 12. Ground No.3 of the Revenue s appeal reads as under:- The CIT(A) has erred in deleting the disallowance of ₹ 1,20,000/- out of total addition of ₹ 7,96,563/- claimed u/s 57(iii) of the IT Act without appreciating the fact that the assessee could not prove that such expenditure was expended wholly exclusively for the purpose of earning such income. 13. We have heard both the sides and perused relevant material placed before us. The facts of the case are that the assessee has disclosed the income of ₹ 60,87,202/- under the head income from other sources out of which the total expenses incurred by the assessee was ₹ 21,97,452/-. However, the assessee itself disallowed the sum of ₹ 14,00,889/- and claimed the deduction of only ₹ 7,96,563/- against the income from other sources. The Assessing Officer disallowed the entire expenses claimed by the assessee and assessed the income from other sources at ₹ 60,87,202/-. On appeal, learned CIT(A) allowed the relief of ₹ 1,20,000/- with the following finding:- 7.3 I have considered the facts of the case and submissions of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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