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DCIT Circle 27 (1) , New Delhi Versus M/s Unity Buildwell Ltd.

2017 (9) TMI 525 - ITAT DELHI

Rental income earned from the property held as stock in trade - income from ‘House Property’ OR “Business & Profession’ - Held that:- By following the rule of consistency for the assessment year 2009-10 & 2010-11, the Ld. CIT(A) in the present assessment year i.e. 2011- 12 has rightly directed the AO to treat the income as house property and allow the deduction for payment of house tax, which does not need any interference on our part. Even otherwise, we further note that the Hon’ble High Court .....

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H COURT). - ITA No. 4966/Del/2015 - Dated:- 1-9-2017 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Revenue : Sh. Shravan Gotru, Sr. DR For The Assessee : Sh. Arun Jain, CA ORDER PER H.S. SIDHU, JM:- The Revenue has filed the Appeal against the Order of the Ld. Commissioner of Income Tax (Appeals-I), New Delhi on the following grounds:- 1. On the facts and in the circumstances of the case, Ld. CIT(A) has erred in holding the rental income of ₹ 1,0 .....

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rving the right to amend, modify, alter or add any ground(s) of appeal at any time before or during the hearing of this appeal. 2. The brief facts of the case are that the assessee filed its return of income on 29.9.2011 declaring total income of ₹ 3,34,83,800/- relating to assessment year 2011-12. The case of the assesssee was selected under scrutiny and accordingly, a notice dated 13.9.2012 u/s. 143(2) of the Income Tax Act, 1961 (hereinafter referred as the Act) was issued and duly serv .....

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the year under consideration. The business of the assessee company is to develop commercial projects within Delhi. The commercial units in the developed projects are either sold or given on lease. AO observed that over the years assessee has shown lease receipts from the properties given on lease as its business income. However, during the year under consideration the assessee company has deviated from accounting practice followed and has offered its lease receipts under the head of 'Income .....

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income from the House Property. Since the assessee has shown its lease receipts under the head business income over the years and the same has been accepted by Department, the lease receipts of ₹ 1,05,26,484/- received by the assessee in the year under consideration is treated as business income of the assessee, AO observed that identical addition made in the previous assessment year 2010-11 and in first appeal, the same was deleted by the CIT(A)-III, New Delhi vide his appellate order in .....

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ppealed before the Ld. CIT(A), who vide his impugned order dated 27.5.2015 has deleted the addition in dispute and allowed the appeal of the assessee. 3. Aggrieved with the Ld. CIT(A) s order dated 27.5.2015, Revenue is in appeal before the Tribunal. 4. Ld. DR relied upon the order of the AO and reiterated the grounds of appeal raised in the Appeal. 5. On the contrary, Ld. Counsel of the assessee has relied upon the order of the Ld. CIT(A) and also filed a Paper Book containing pages 1 to 74 in .....

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Delhi High Court in the case of New Delhi Hotels Ltd. vs. ACIT (ITA No. 238-240/2013); Judgement dated 18.2.2013 of Delhi High Court in the case of CIT vs. Discovery Estate Pvt. Ltd. (356 ITR 0159); judgement dated 25.3.2015 of Hon ble Delhi High Court in the case of CIT vs. Niagara Hotels & Builders (P) Ltd. (ITA No. 43/2014); Detail for the assessment year 2009-10 to 2012-13 in respect of disputed issues under consideration in the case of the assessee; Detail for the assessment year 2009- .....

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see) for the AY 2012-13 in appeal no. TR/164/16-17 and stated that the issue in dispute is squarely covered in favour of the assessee by the aforesaid decisions. Hence, he requested that by following the aforesaid decisions, the addition in dispute may be deleted and appeal of the assessee may be allowed. 6. We have heard both the parties and perused the records. We have gone through the orders passed by the revenue authorities as well as the contention raised by the assessee in the grounds of a .....

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covered issue. We note that Ld. CIT(A) has elaborately discussed the issue in dispute vide para no. 5.2 to 5.2.1 at page no. 4 to 6. The relevant portion of the Ld. CIT(A) s order is reproduced as under:- 5.2 I have carefully considered the submissions of the appellant and perused the order passed by the AO as well as the copy of the appellate order passed by the Ld. CIT(A)-III, New Delhi for AY 2009-10 and 2010-11. I find that the Ld. CIT(A) vide his order dated 14.8.2013 for the AY 2009-10 vi .....

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ip. In my humble view, there is no rider in the Chapter IV(c) or other provision of the Income Tax Act which provide different tax treatment to rental income on House Property owned by the assessee but kept as stock in trade (inventory). Therefore, all kind of rental income earned on House Property should be assessed. Therefore, all kind of rental income earned on House Property should be assessed under the head "Income from House Property". Therefore, rental income declared by the app .....

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produced as under:- "In the case before us, the unsold flats being house property, pure and simple and having fallen under the head, income from house property, as provided in section 22 of the Act, in our opinion, Commissioner of Income-tax (Appeals) rightly held that the rental Income of such property should be assessed under section 22 of the Act. We cannot lose sight of the fact that under the Act, the income of an assessee is one and various sections of the Act direct the modes in whic .....

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, in my opinion rental income of RS.62,46,373 as earned by the appellant is assessable under the head "Income from House Property". In coming to the' above conclusion I also rely on the decision in the cases of S. Sohan Singh vs Income Tax Officer 16 ITRD 272 (Delhi Tribunal), and Matru Ashish Co-operative Housing Society Ltd. v. Income Tax Officer (2012) 27 taxmann.com 169 (Mumbai Trib.). 10.4 As regard, the AO's contention that in earlier years the rental income was assessed .....

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nder the head Income from House Property was to claim deduction @30% under section 24(a) of Income Tax Act and to reduce its tax liability. Change made by the appellant in the tax treatment of rental income is in accordance with the provision of the Income Tax Act therefore, the AO is duty bound to accept the same even if there is a change in tax liability of the appellant. Hence, in view of the above the rental income in the instant case is to be assessed under the head Income from House Proper .....

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