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2017 (1) TMI 570 - ITAT MUMBAI

2017 (1) TMI 570 - ITAT MUMBAI - TMI - Nature of income - Income received from Strand Book Stall for providing warehousing, binding, shrink wrapping, supervision charges and mailing charges - business income or income from house property - Held that:- The assessee has established that it was carrying on its activities of commercially exploiting its business asset, i.e. the said factory premises at Thane, to render the aforementioned services to M/s. Strand Book Stall for a consideration which co .....

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se on this issue has undergone any change in the year under consideration in the case on hand. - The factual matrix of the case on hand in similar to that of the case of CIT vs. NDR Warehousing P. Ltd. (2014 (12) TMI 189 - MADRAS HIGH COURT) and the same would squarely cover the issue in the case on hand. Moreover the Department having accepted the assessee’s position in earlier years, even in scrutiny assessments that the income from M/s. Strand Book Stall even though bearing the nomenclatu .....

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Respondent : Shri Ranathir Gupta Per Jason P. Boaz, A.M. This appeal by the assessee is directed against the order of the CIT(A)- 1, Mumbai dated 03.03.2011 for A.Y. 2006-07. The assessee has filed a petition for condonation of delay in filing this appeal which is accompanied by an affidavit sworn to by the Director of the assessee company. Order on Petition for condonation of delay in filing the appeal for A.Y. 2006-07 2.1 Admittedly the impugned order of CIT(A)-1, Mumbai dated 03.03.2011 for .....

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61 years, Director of Four Oceans Publishers Private Limited do hereby state on solemn affirmation as under: 1. I say that I am a director of Four Oceans Publishers Pvt. Ltd. since September 2012. 1 am conversant with the facts of the case and hence unable to depose the same. 2. I say that the appeal filed by the Assessee Company before the Commissioner of Income tax (Appeals) was disposed of by him by his impugned order dated 03.03.2011. This order was received by us on 08.04.2011. 3. I Say tha .....

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before the Tribunal during the stipulated time because there was no person in the Company to take Proper care of the affairs of the company. 6. I say that I am the married daughter who was based in Bangalore up to August 2012. I relocated myself from Bangalore to Mumbai and was appointed as a Director of the said company from September, 2012. Before that I had no knowledge of the affairs of the company. 7. I say that at the time of my appointment as a director the accounts of the assessee compa .....

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vised that appeal against the CIT(A) s impugned order dated March 03, 2011 has remained to be filled. Pursuant thereto we have now prepared and filed the appeal on 4/6/2013 which involves a delay of 627 days. 9. I say that delay in filing the appeal has occurred on account of bonafide reasons because there was no responsible executive in the company. No prejudice would be caused to the revenue if the delay is condoned. On the other hand, if the appeal is not admitted a meritorious matter may get .....

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as reasonable cause for filing the appeal belatedly. In these circumstances, the learned A.R. of the assessee, inter alia, praying for condonation of delay in filing this appeal placed reliance on the principles laid down by the Hon'ble Apex Court in the case of: - (i) Collector, Land Acquisition vs. MST Katiji & Others (167 ITR 471) (SC) (ii) Radhakrishna Rai vs. Allahabad Bank and Others (2009) 9 SCC 733 (iii) CIT vs. WSest Bengal Infrastructure Development Corporation Ltd. (2011) 334 .....

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antial justice should prevail over technical considerations. The Hon'ble Court also explained that every days delay must be explained does not mean that a pedantic approach should be taken. The doctrine must be applied in a natural, common sense and pragmatic manner. In the case of Shakuntala Hegde, L/R of R.K. Hegde in ITA No. 2785/Bang.2004 for A.Y. 1993-94, the ITAT, Bangalore Bench condoned delay of about 1331 days in filing the appeal wherein the plea taken for delay in filing the appea .....

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opinion that by condonation of the aforesaid delay of 728 days in filing the appeal, there will be no loss to Revenue as legitimate taxes payable in accordance with law alone would be collected. In this view of the matter, we accept the reasons cited by the assessee for condonation of delay in filing this appeal and accordingly condone the delay of 728 days and admit the appeal for consideration on merits. ORDER 3. The facts of the case, briefly are as under: - 3.1 The assessee company, engaged .....

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treated the rent of ₹ 15,50,000/- received by the assessee from Strand Book stall and declared as business income to be income from house property; allowing the assessee only deduction of 30% on account of repairs and thereby disallowing the entire business expenditure claimed by the assessee. 3.2 Aggrieved by the order of assessment dated 27.10.2008 for A.Y. 2006-07, the assessee preferred an appeal to the CIT(A)-1, Mumbai, who dismissed the assessee s appeal vide the impugned order dated .....

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ty as against under the head Income from Business as declared by the Appellant in its return of income. 2. The CIT(A) failed to appreciate that: The Assessee had not let out its premises to Licensee but the arrangement was to simply provide various services to that concern through the appellant s own employees; The nomenclature given to a transaction cannot be decisive as to the head under which an income is to be taxed. 3. The Appellant craves leave to add, alter, delete or modify all or any of .....

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eiterated submissions dated 04.03.2010 and others put forth before the learned CIT(A); the main activity of the assessee company was from its factory premises at Thane, which business was discontinued in 1981 due to labour unrest. In order to commercially exploit its business asset, since 1982 the assessee started providing and outsourcing services to outsiders like M/s. Strand Book Stall, a concern engaged in business of holding both book fairs/exhibitions in Mumbai. The assessee entered into a .....

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e and not income form house property as has been misconstrued by the authorities below. It was also pointed out that expenditure incurred on telephone, electricity, municipal assessment bills, etc. was being borne only by the assessee, the keys, possession and control of the entire factory premises was in the possession and control of the assessee. The learned A.R. contends the above facts clearly demonstrate that the assessee was carrying on its business activity of providing the aforesaid serv .....

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y the I.T. Department since 1982, including the two scrutiny assessments completed under section 143(3) of the Act for assessment years 1996-97 and 2003-04. It was contended that while it is true that each assessment year is an independent proceeding and the principle of res-judicata does not apply to income tax proceedings, various High Courts and the Apex Court have held that the principle of consistency requires that the view taken by the Revenue authorities in earlier years should not be dep .....

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ilar factual situations: - (i) CIT vs. NDR Warehousing Pvt. Ltd. (2015) 372 ITR 690 (Mad.) (ii) Vora Warehousing (P) Ltd. vs. ACIT (1999) 70 ITD 518 (Mum) It was also contends that the judicial decisions relied on by the authorities below were not applicable to the factual or legal position of the case on hand. 4.3 Per contra, the learned D.R. for Revenue placed reliance on the orders of the authorities below. 4.4.1 We have heard the rival contentions and perused and carefully considered the mat .....

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e s employees. Admittedly the commercial exploitation of its business asset, the factory at Thane, was being done for outsiders since 1982, after lock out and closure of the said factory in 1981. It is also not disputed that the keys and possession of the business asset, being the factory premises at Thane, was in the possession and control of the assessee only and expenses incurred in connection thereto, such as electricity, telephone charges, etc. were borne exclusively by the assessee. In thi .....

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ee, even in scrutiny assessments under section 143(3) of the Act for A.Y. 1996-97 and 2003-04. While the principle of res-judicata is not applicable to income tax proceedings, we observe that the authorities below have not brought on record any material to prove that the factual matrix of the case on this issue has undergone any change in the year under consideration in the case on hand. 4.4.2 In the case of CIT vs. NDR Warehousing P. Ltd. (2015) 372 ITR 690 (Mad), which we have respectfully per .....

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