TMI Blog2014 (2) TMI 1337X X X X Extracts X X X X X X X X Extracts X X X X ..... al taxes - Held that:- Now Ld. counsel for the assessee Shri S. K. Tulsiyan argued that the deduction qua interest should be allowed to the assessee and he stated that the addition of ₹ 64,389/- pertains to penalty and interest and the penalty is to the extent of ₹ 10,455/- but interest is to the extent of ₹ 53,934/-. Ld. counsel for the assessee made submission that this should be allowed. On query from the bench, the Ld. Sr. DR stated that this issue needs to be set aside as to the verification of facts by AO. On this, Ld. counsel for the assessee fairly conceded that the issue can be set aside. - I.T.A No. 374/Kol/2009 - - - Dated:- 13-2-2014 - Shri Mahavir Singh, JM Shri Abraham P. George, AM For the Appellant: Shri S. K. Tulsiyan, Advocate For the Respondent: Shri Apurba Kr. Das, JCIT, DR ORDER Per Shri Mahavir Singh, JM: This appeal by assessee is arising out of order of CIT(A)-XIX, Kolkata in Appeal No. 180/CIT(A)-XIX/ITO,Wd-31(1),Kol/07-08 dated 04.02.2009. Assessment was framed by ITO, Ward-31(1), Kolkata u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) for Assessment Year 2005-06 vide his or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come as income from house property and ignoring the material facts on records that the appellant had exploited the factory sheds and godowns which were the commercial assets to earn business income and that such income was derived after providing various amenities and facilities to the licensee, and his directions to enhance the income by changing the head of income and its consequential disallowances is not tenable in law. (6) That on the facts and in the circumstances of the case and evidences on records the leave and license charges received by the appellant as composite rent and also assessed as business income since its inception, the action of the CIT(A) to change of head of income ignoring the rule of consistency is unjust, illegal, arbitrary and excessive. (7) That on the facts and in the circumstances of the case the CIT(A) erred in enhancing the computation of income filed by the appellant and the assessment order by directing the AO to treat the interest income to be income from other sources without providing opportunity for taking recourse to such enhancement, as against the claim that the said income was income from business and accordingly so assessed by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y was emphasized upon. However, CIT(A) was of the view that the prime object in this case was to let out property consisting of godowns and factory sheds to various occupants. He was also of the view that the sole motive of the appellant is to let out the property to various persons and it has not carried out any complex commercial activities to exploit the property C IT(A) further observed that decision of the Hon'ble Supreme Court in the case of Shambhu Investment Pvt. Ltd. V C IT (2003) 263 ITR 143(SC) held that composite rent received by assessee is taxable under the head 'income from house property' and not as M/s. Banwarilal Goel Sons, AY:2005-06 'business income' as declared by assessee in the return of income. Accordingl y, the income in question was held to be taxable as income under the head income from house property . Aggrieved, the assessee is in appeal before us. 4. ld. counsel for assessee made submissions in support of the contention that the asset which was allowed to be used and the consideration for which has been offered to tax as business income was a commercial asset and whole process of providing amenities and services is a complex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed. 5. Ld. D.R. submitted that the property in question was given on rent and the rent was a composite rent. He stated that income is fixed and, therefore, it cannot be treated as business income. He relied on decision of the Hon'ble Calcutta High Court in the case of Shambhu Investment (P) Lt d. V CIT [2001] 249 ITR 47 (Cal), which has since been approved by Hon'ble Supreme Court wherein it is held that when primary object of assessee is letting out the property, the income earned from the same must be considered as income from house property. The Bench directed ld. D.R. to find out whether the contention of the assessee that the Assessing Officer himself has treated the income as business income in the subsequent years is correct. It is revealed from records that ld. D.R. specificall y required assesee to confirm whether the income in question derived from house property has been treated as income from business in any assessment subsequent to assessment year 2005-06. 6. We have heard the rival contentions, perused the material on record and gone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ltd. V ITO [1977] 106 ITR 1 (SC), wherein at page 10 it was stated that at the same time, we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity . Hon'ble Supreme Court was of the view that the assessments are certainly quasi-judicial and observations so made in the case of Parashuram Pottery Works Co. Ltd. (supra) would apply to the assessment proceedings. In the case of Parashuram Pottery Works Co. Ltd. it was observed that res judicata does not apply to income tax proceedings and each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year . M/s. Banwarilal G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of law. 10. We have heard rival submissions and gone through facts and circumstances of the case. The AO has made disallowance of municipal taxes by observing that the receipt of ₹ 43,373/- dated 14.08.2003 does not pertain to the relevant year. The relevant finding of the AO reads as under: M/s. Banwarilal Goel Sons, AY:2005-06 Municipal tax receipts in respect of the Warehouse were submitted while perusing the same it was found that one receipt amounting to ₹ 43,373/- is dated 14/08/2003 (payment made by Cheque no.981632 dated 30/07/2003). As this amouynt pertains to earlier period it is therefore disallowed. Aggrieved, assessee preferred appeal before CIT(A). Before him, the assessee contended that the AO has wrongly disallowed this amount of ₹ 43,373/- due to oversight being one challan of the earlier years and CIT(A) deleted this addition by directing the AO to allow the claim to the extent of ₹ 56,523/- as under: I have considered the submission of the appellant and perused the copy of ledger account as well as municipal tax receipts. It is observed that the payments were made for four quarters of FY 2004-05 on 28.4.2004, 26.7.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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