TMI Blog2018 (3) TMI 1509X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessing authority at the time of assessments made u/s 143(3) for Assessment Years 2006-07, 2007-08 and 2008-09. There is no attempt made by the Assessing Officer to refer to any new tangible material say as to why the departure from the accepted stand of assessing the receipts from godown rent and facilities as ‘business income’, was required to be made - onus has not been discharged by the Assessing Officer inasmuch as he does not make out any case for making a departure from the earlier accepted stand in the scrutiny assessments. - Decided in favour of assessee. - ITA NOS. 5708/MUM/2015 And 5558/MUM/2016 - - - Dated:- 1-2-2018 - SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI C.N. PRASAD, JUDICIAL MEMBER For The Appellant : Ms. Aasifa Khan For The Respondent : Shri V. Justin ORDER PER G.S. PANNU, AM : The captioned are two appeals by the assessee pertaining to Assessment Years 2008-09 and 2013-14 and since the substantive issue involved is common, they have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity. 2. In both the appeals, the controversy relates to the nature and tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee, and according to him, since such income was earned from letting-out of property, the same is liable to be assessed under the head income from house property . The Assessing Officer also noted that for Assessment Year 2008-09, the assessment has been reopened u/s 147/148 of the Act on the ground that income chargeable to tax had escaped assessment inasmuch as income from letting-out of the godown was wrongly assessed as business income in the original assessment. For the said reason, the income declared as godown rent was subjected to assessment as income from house property . The aforesaid stand of the Assessing Officer was taken in appeal before the CIT(A), who has upheld the stand of the Assessing Officer by noticing that in Assessment Year 2008-09, against the order passed by the Assessing Officer u/s 143(3) r.w.s. 147 of the Act, said income has been held to be assessable as income from house property . Pertinently, at this point, we may also notice that the other captioned appeal is preferred by the assessee against the order of CIT(A) for Assessment Year 2008-09 dated 21.09.2015, which has been followed in the instant Assessment Year of 2013-14 by the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer has treated the income from godown rent as income from house property by following the ratio of the decision of the Hon'ble Supreme Court in the case of Shambu Investment Pvt. Ltd vs CIT, 263 ITR 143 (SC); and, similar stand has been taken for Assessment Year 2013-14. 8. We have carefully considered the rival submissions. As the aforesaid discussion reveals, the sum and substance of the dispute revolves around the character of amount received by the assessee against giving of godown space on rent. Notably, the appellant-assessee is engaged in the business of shipping agency and warehousing. The property in question, which is a warehouse, is located at Kandla where assessee is carrying out its business activities of shipping agency, etc. The crux of the stand of Revenue is that the impugned sum has been earned by the assessee for making available its warehouse/godown space and, therefore, it was an income derived from letting-out of property and thus, the same is assessable as income from house property . No doubt, in a case of earning income from renting of property simpliciter, the income would be assessable as income from house property . So, howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee was engaged in the business of warehousing, handling and transport business and it was providing storage facility to manufacturers, traders and other concerns engaged in warehousing activity and the services provided included several auxiliary services such as pest control, preventive measures against decay of goods stored due to vagaries of moisture/temperature, fungus formation, etc., besides security and protection of goods stored. In this context, the decision of the Mumbai bench of the Tribunal in the case of Vora Warehousing (P.) Ltd. vs. ACIT, [1999] 70 ITD 518 (Mum)(SMC) is also relevant where it has been observed that the warehouses constructed with facility to store goods are to be considered as commercial assets and income realised by letting-out such facility was assessable as business income . Considered in the aforesaid light, in our view, in the present case, the Assessing Officer was not justified in considering the income from godown rent as income from house property . 9. Apart therefrom, there is also the principle of consistency inasmuch as for Assessment Years 2006-07 and 2007-08, assessments have been completed u/s 143(3) of the Act and copies of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Pvt. Ltd. (supra) would reveal that the Hon ble Court clearly negated that merely because the income is attached to any immoveable property, that cannot be the sole factor for assessment of such income as income from house property . It further prescribed that if the main intention of the assessee is to let-out the property, the income thereof must be considered as rental income or income from house property , whereas if the primary object is to exploit the immoveable property by way of complex commercial activity, in that event, it should be held as a business income . In the background of the aforesaid legal position, the Hon'ble High Court found on facts of the case before it that the income was earned merely from letting-out of property and, therefore, held it to be assessable as income from house property . The said legal position has been approved by the Hon'ble Supreme Court in its judgment reported in the case of Shambhu Investment (P) Ltd. (supra). So far as the facts in the instant case are concerned, there is no case made out by the Revenue as to how it can be said that the manner in which the assessee has dealt with the impugned property, it was with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly, we set-aside the order of the CIT(A) and direct the Assessing Officer to recompute the income by treating the receipt from warehousing activity as business income . Thus, on this aspect, assessee succeeds. 12. Insofar as Assessment Year 2008-09 is concerned, the controversy stands on an identical footing so far as the merits of the issue are concerned. Therefore, our decision in appeal of assessee being ITA No. 5558/Mum/2016 for Assessment Year 2013-14 shall apply mutatis mutandis to the appeal of assessee for Assessment Year 2008-09 also. 13. So, however, in Assessment Year 2008-09 the captioned proceedings are as a consequence of assessment being reopened by issuance of notice under Sec. 147/148 of the Act. In the original assessment finalised u/s 143(3) of the Act dated 06.11.2009, the income from godown rent was assessed as business income . The assessee has also challenged the validity of the proceedings initiated under Sec. 147/148 of the Act on the ground that the same is based on a mere change of opinion, with facts remaining the same. In this context, our attention has been drawn to the reasons recorded for reopening the assessment, a copy of which is plac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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