TMI Blog2020 (2) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... er the head business income . - Appeal of the assessee is allowed. - ITA.No.1719/Ahd/2017 - - - Dated:- 12-2-2020 - Shri Rajpal Yadav, Vice-President For the Assessee : Shri M.K. Patel, AR For the Revenue : Shri Dilip Kumar, Sr.DR ORDER Assessee is in appeal before the Tribunal against order of the ld.CIT(A)-1, Vadodara dated 23.1.2015 passed for the Asstt.Year 2012-13. 2. At the outset, it was brought to my notice that appeal of the assessee is barred by limitation. Registry of the Tribunal has pointed out delay of 540 days in filing appeal by the assessee before the Tribunal. Subsequently, assessee has filed an application for condonation of delay. In the application, assessee interalia stated that Shri Prakash N. Patel, director of the assessee-company, who was in-charge of the accounts and taxation matters was hospitalised due to cardiac illness and other related health complication. Because of that, he was to be admitted in the hospital from time to time and he could not attend in day-to-day affairs of the company. In support of this fact, the assessee filed copies of medical reports and treatment card of the hospital along with application for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y day's delay must be explained does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 5. Similarly, I would like to make reference to authoritative pronouncement of Hon ble Supreme Court in the case of N.Balakrishnan Vs. M. Krishnamurthy (supra). It reads as under: Rule of limitation are not meant to destroy the right of parties. They are meant to see that part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the part of the applicant the court shall compensate the opposite party for his loss. 6. I do not deem it necessary to re-cite or recapitulate the proposition laid down in other decisions. It is suffice to say that the Hon ble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the delay, then such reasons are to be construed with a justice oriented approach. 7. In the light of the above, if I examine explanation of the assessee, then it would reveal that the delay in filing the appeal was caused due to major reason being that key person who is looking after the accounts and taxation matters has been hospitalized for cardiac treatment from time to time. This has disconnected him from attending day-to-day work of the assesseecompany. To support this fact, assessee has also filed copies of various medical reports and documents from the hospital. The submission of the assessee that if the adverse order of the ld.CIT(A) was remained unchallenged, then it would have cascading effect on the subsequent years also. I am of the view that the reasons narrated by the assessee for delay in filing appeal before he Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o M/s.Jubilant Food Works Ltd. These assets were reflected in the block of assets mentioned in the lease agreement. He observed that assessee has stopped its business activity, and given its properties on lease to the above parties. He however observed that since letting out of the property was inseparable from the letting out of the furniture fixtures and plants machineries, therefore, such rental income was to be taxable under the had income from other sources instead of income from house property for which the ld.CIT(A) relied upon the judgment of Hon ble Supreme Court in the case of Univeral Plast Ltd., 103 taxman 493 (SC). The ld.CIT(A) directed the AO to treat the income of the assessee under the head income from other sources and not under the head income from house property . Not satisfied with this order of the ld.CIT(A), assessee is in further appeal before the Tribunal. 10. Before me, the ld.counsel for the assessee reiterated its submissions made before the Revenue authorities below. He further submitted that as per the memorandum of association, the main objects inter alia include leasing, letting on hire of entertainment and recreation facilities, ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the ld.CIT(A) has not concurred with the AO, rather expressed third opinion, i.e. in the first assessment order after the agreement, the AO treated the income from this activity as a business income. This view was followed by four assessing officers in the subsequent years, while the ld.AO in the present assessment proceedings adopted a different view that income is to be assessed under the head house property income . The ld.CIT(A) did not concur with the AO, and held that income is to be assessed under the head other sources. There is no gain even for the Revenue for changing this character, because under section 57(iii) the assessee would get all relatable expenditure for earning this income, if it is assessed under the head income from other sources. According to the ld.counsel for the assessee in this year, there is hardly any tax implication, but he has unnecessarily changed the business structure of the assessee for the subsequent year. 12. On the other hand, the ld.DR relied upon orders of the ld.Revenue authorities. He pointed out that the ld.CIT(A) has considered all aspects before holding that income from the leasing out of Cinema complex deserves to be assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in this aspect deserves to be taken note of, which reads as under: 28. Secondly, as noted by the Tribunal, a consistent view has been taken in favour of the assessee on the questions raised, starting with the assessment year 1992-93, that the benefits under the advance licences or under the duty entitlement pass book do not represent the real income of the assessee. Consequently, there is no reason for us to take a different view unless there are very convincing reasons, none of which have been pointed out by the learned counsel for the Revenue. 29. In Radhasoami Satsang Saomi Bagh v. CIT [1992] 193 ITR 321/60 Taxman 248 (SC) this Court did not think it appropriate to allow the reconsideration of an issue for a subsequent assessment year if the same fundamental aspect permeates in different assessment years. In arriving at this conclusion, this Court referred to an interesting passage from Hoystead v. Commissioner of Taxation, 1926 AC 155 (PC) wherein it was said: Parties are not permitted to begin fresh litigation because of new views they may entertain of the law of the case, or new versions which they present as to what should be a proper apprehension b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the AO to change head of income in this year, and the finding of both the Revenue authorities are not sustainable. Apart from the above principle of consistency, let me have look to the lease agreement and other aspects. I would like to make reference towards Article 3.1 to 3.3 of the alleged lease agreement which provides revenue and cost. It reads as under: 3.1 In consideration of the right to use the Multiplex Cinema for the Business Purpose conferred by DMPL on PVR, PVR shall pay to DMPL a fee of ₹ 10/- per admission ticket subject to monthly minimum guaranteed fee as under: a) ₹ 6,00,000/- per month i.e. equivalent to 50% of the minimum monthly fee, for the initial two months of the term starting from 16.03.2007 to 15.05.2007; b) ₹ 12,00,000/- per month starting from 16,05.2007. 3.2 The admission fee/monthly minimum guaranteed fee shall stand enhanced by 10% of the last paid Fee every three years. 3.3 The monthly fee shall be paid by PYR to DMPL, in advance on or before 7th day of each calendar month. 16. Next important factor is provision under the Memorandum of Association. It has been highlighted that one of the business, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business income and not from the house property, this Court had dismissed the appeal holding that no question of law arises. In such case, the assessee had taken certain piece of land on lease and thereupon put up construction of a commercial building with an idea of having a business center. Different portions of the building were given on rent to third parties and the assessee treated the rent as service charges under the head, income from business and profession . Assessee explained to the Assessing Officer that in addition to providing the premises, the assessee also provided several other facilitates; such as, services of lift, services of receptionists, secretarial services, data processing, conference room, etc. The Assessing Officer did not accept the contention and treated the income, derived from the house property. The Tribunal ultimately held in favour of the assessee and came to conclusion that, ..the director of M/s. Saptarashi Services (P) Limited are not related to the directors of M/s. Kohinoor Tabacco Products (P) Limited. The electricity charges from October 1, 1989 to March 31, 1990, were paid to M/s. Mohanlal Hargovandas who were one of the members of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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