TMI Blog2018 (4) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent by : Ms. N. Hemalatha ORDER Per Shamim Yahya, A. M.: These are appeals by the assessee directed against the common order of the Commissioner of Income Tax (Appeals) dated 28.09.2017, pertaining to the assessment years 2003-04 to 2008-09. 2. The grounds taken are common for all the year, except for the change in figures. For the sake of convenience, the ground relating to assessment year 2003-04 is referred as under: 1. The authorities below have erred in passing the order / upholding the order u/s 254 in pursuance of the Hon. ITAT order but assessing the total income higher at ₹ 16,61,779/- as against the original assessed income of ₹ 15,31,672/- . 2. The authorities below have erred in disregarding the decision of Hon. ITAT (Mumbai) dated 24.05.2015 rendered in appellant's own case for A.Y. 2009-10. 3. The authorities below have erred in not giving effect to the decision of the Hon. ITAT (Mumbai) for A.Y. 2003-04 correctly. 4. The learned CIT (Appeal) has erred in superseding the Hon. ITAT (Mumbai) by freshly adjudicating an issue which had been already decided by the Hon. ITAT (Mumbai). 5. The learned Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty as against the assessee company s claim that the return received on sub letting the property and charges were to be computed under the head income from business . 5. Upon the assessee s appeal, the ld. Commissioner of Income Tax (Appeals) confirmed the addition as income from house property, rejecting the assessee s claim for business expenditure. 6. Against the above order, the assessee appealed before the ITAT. 7. Vide combined order dated 14.08.2013 for assessment years 2008-9, the Tribunal has held as under: 6. We have perused 'he records and considered the rival contentions carefully. The dispute is regarding nature of income earned from sub-lease of the property taken on lease by the assessee and from providing certain services. The assesses had taken the property under consideration on lease vide agreement dated 25.02.2002 for a period of 50 years. Such lease of the property which is renewable for aggregate term of at least 12 years is deemed to be owned by the lessee u/s 27(iiib) r.w.s 269 UA (f). The assessee in this case had taken the property on lease for 50 years and therefore, we see no infirmity in the orders of authorities below holding that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d had claimed deduction on account of all expenses relating to service charges of the property. Alternatively the assessee has 553 requested that the service charges income may be assessed as income from other sources and expenditure incurred for earning of such income be allowed as deduction u/s 57 of the income tax Act. The authorities below have assessed the rental income as well as service charges as income from house property. Reliance was place on the judgment of Hon'ble supreme court in case of Shambhu investments (263 ITR 143). The said judgment is however distinguishable. In that case, the assessee had let out furnished office with furniture and fixtures and other amenities. Hon'ble High court of Kolkata noted that entire cost of property had been taken by the assessee as security advance. Thus the main intention of the assessee was to let out the property and not to exploit the property commercially. It was therefore held that rental income had to be assessed as house property income and not business income. There was no issue whether service charges could be assessed as income from business or other sources. The Hon'ble supreme court ad upheld the judgment on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these are already covered in a statutory allowance u/s. 54 of the Act. Under these direction, the Assessing Officer has passed the order u/s. 143(3) r.w.s.254 dtd.30.3.2015. In this order, the Assessing Officer has examined the allowability of depreciation and with elaborate discussion, the Assessing Officer has concluded that the same could not be allowed u/s. 57 of the Act Similarly, other expenses like corporate expenses etc. were also examined and held as inadmissible as per provision of section 57 of the Ad Accordingly, the Assessing Officer assessed the lease rentals as House Property Income and service charges as Income from other sources . 9. Against the above order, the assessee appealed before the ld. Commissioner of Income Tax (Appeals). 10. The assessee had inter alia submitted that the ITAT for assessment in assessee s own case for assessment year 2009-10 has reversed its earlier decision. However, the ld. Commissioner of Income Tax (Appeals) found that the assessee has also filed a miscellaneous application for assessment years 2003-04 to 2008-09 before the ITAT against its judgment for those years. However, the ITAT had decided the miscellaneous petition of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw that if an income is earned from the business activity of letting out of the properties or the commercial exploitation of the property by way of organized activities of taking properties on lease and letting out etc. then the income is to be assessed as business income of the assesses as held subsequently by the Supreme Court in the case of 'Chennai Properties Investments Ltd.' (supra). The Tribunal in its wisdom has held that the facts of the case of the assessee do not suggest that the assesses was in the business of commercial exploitation of the property or leasing out of the properties and held that the income earned by the assessee from the sub tease of the premises was simple case of letting out of the property and thus income there from was assessable under the head 'Income from the house property'. The main object of the assessee in this case is providing advisory, consultancy and technical services in the area of real estate and properties such as architectural, civil construction, maintenance and related services. None of the above objects suggest that letting out of the premises was the business activity of the assessee. The premises in qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments made by the AR of the appellant company, the case laws having identical facts and circumstances have been duly perused and considered. 7.2 The appellant company is receiving income from leave and license fee and service charges for certain services provided to the Licensee. The facts related to the appellant's business has been elaborated in detail in earlier paras; and therefore, the same is not repeated. In nutshell, the appellant company has claimed the entire receipt i.e. from rental as well as from service charge as business income. The AO in the original assessment order has assessed the same as Income from House Property . The order of the Assessing Officer was confirmed at first appellate stage. Upon further appeal, the Hon'ble Tribunal vide a combined order for A.Y.2003-04 to 2008-09 dated 14.08.2013 has upheld the order of the AO, partially i.e. to the extent of rental income. The Hon'ble ITAT set aside and restored back the assessment to the AO for making a fresh assessment, treating the leave and license fee as a 'Income from House Property and service charges under the head income from other sources . The Assessing Officer passed the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om them as business income. In our opinion, the assessee received income by letting out shops/stalls; and therefore, the same has to be held as income from house property. 7.4 As mentioned under para 5, the facts of the appellant's case are absolutely identical to that of the case of M/s. Raj Dadarkar Associates (Supra). Thus, under the background of interpretation of Hon'ble Supreme Court with respect to the taxability of service charges and leave and license fee, this case should have been decided accordingly. However, this is not an order u/s.143(3), but an order u/s.143(3) r.w.s.254 of the Act, in other words, the AC has passed this order under the direction1 of Hon'ble Tribunal, which has directed to tax the service charges as Income from other sources . Hence, there is no infirmity in the order of the AO. This issue was also referred to the AR of the appellant company. It was submitted that this appeal cannot be decided beyond the boundary of directions of Hon'ble ITAT and in some cases if the ratio of M/s.Ra; Dadarkar Associates is applied, then resultant income will be less than assessed income. It is therefore, the decision is confined to the all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noted that there is no power of attorney on record. Hence, this adjournment petition is rejected. 14. Upon careful consideration I find that the first issue raised by the assessee is that the authorities below have erred in not following the ITAT decision in assessee s own case for assessment year 2009-10. However, I note that as evident above, the combined order of the ITAT for the impugned assessment year was also the subject matter of the miscellaneous petition in view of the aforesaid ITAT order for assessment year 2009-10. The ITAT has dismissed the said miscellaneous application. In that view of the matter, the authorities below are quite correct in following the binding order of the ITAT for assessment years 2003-04 to 2008-09. 15. As regards the assessee s plea that the authorities below have not correctly followed the aforesaid ITAT order, I find that the Assessing Officer and the ld. Commissioner of Income Tax (Appeals) has given a detailed finding. From the above, it is apparent that the authorities below have correctly followed the decision of the ITAT. In this regard, even at the sake of repetition, I may reproduce the concluding portion of the ld. Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
