IN INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI R.C.SHARMA, AM AND SHRI AMARJIT SINGH, JM I.T.A. No.1622/Mum/2014 ( Assessment Year: 2009-10) Income tax Officer M/s. Electronics & Engineering Ward 20(3)-1 Co., EEC House, Plot No.C-7, th Vs. Room No.605, 6 Floor Dalia Indl Est., New Link Road, Piramal Chambers, Lalbaug Andheri (W) Mumbai 400 012. Mumbai-400 053. PAN/GIR No. : AAAFE 0594 M ( Appellant) .. (Respondent) Cross objection/ No.96/Mum/2015 Arising out of ITA No.1622/Mum/2014 AY : 2009-10 M/s. Electronics & Engineering Income tax Officer Ward 20(3)-1 Co., Andheri (W) Mumbai 400 012 Vs. Mumbai-400 053. (Cross objector) .. (Respondent) Assessee by: Shri Mayur Kishnadwala Department by: Shri G. Nanthakumar-DR Date of Hearing: 07.09.2016 Date of Pronouncement: 28.09.2016 O R D E R ITA No.1622/M/2014 &C.O.96/M/15 A.Y. 2010-11 PER AMARJIT SINGH, JM: Revenue as well as assessee have filed present appeal/cross objection challenging order dated 11.12.2013 passed by Commissioner of Income Tax (Appeals) -31, Mumbai [hereinafter referred to as CIT(A) ] relevant to A.Y.2009-10. ITA/1622/Mum/2014: 2. revenue has raised following grounds:- 1. ld. CIT(A) has erred on facts and circumstances of case and in law by not appreciating fact that decision of Hon ble ITAT on issue of considering Rent receipt income as Income from business instead of Income from House Property is not accepted by revenue since this issue has been settled by Apex Court in favour of revenue in its mark judgment rendered in case of M/s. Shambu Investment Pvt. Ltd. vs. CIT (263 ITR 143). 2. appellant prays that order of CIT(A) on above grounds be set aside and that of Assessing Officer be restored. 3. Brief facts of case are that assessee, is engaged in business and filed its return of income on 31.08.2009 declaring total income to tune of Rs.21.16 crores. Assessing Officer completed assessment u/s.143(3)of Act determining its income to tune of Rs.1.13 crores. notice u/s. 143(2) dated 15.09.2010 was issued and served upon assessee on 22.09.2010. 2 ITA No.1622/M/2014 &C.O.96/M/15 A.Y. 2010-11 Subsequently, notice u/s.142(1) dated 05.07.2010 alongwith questionnaire was issued and served upon assessee. assessee declared rental income received from letting out office premises to sister concerns under head business centre receipt . assessee firm was carrying out business activities of manufacturing of non destructive testing equipment & allied quality control equipments. said business was closed down by assessee and assessee let out property for period w.e.f. F.Y. 2002-03 onwards. Assessing Officer dealt with income declared by assessee under head business centre receipt as income from house property u/s. 22 of I.T.Act and accordingly taxed. Thereafter, assessee filed appeal before CIT(A) who confirmed order of Assessing Officer . Therefore, present appeal has been filed before us. 4. We have heard argument advanced by ld. Representatives of both parties and have gone through records. ld. Representative of department has argued that CIT(A) has decided issue in favour of assessee wrongly and illegally. Therefore, order of CIT(A) is wrong against law and facts therefore liable to be set aside. It is also argued that business centre receipt of assessee has rightly been treated by Assessing Officer by holding said income as income from house property but CIT(A) has wrongly treated business centre 3 ITA No.1622/M/2014 &C.O.96/M/15 A.Y. 2010-11 receipt as business income. Therefore, said order is not sustainable in eyes of law. In this regard, ld. Representative of department has placed reliance on law settled in case of M/s. Shambu Investment Pvt. Ltd. vs. CIT (263 ITR 143). 4.1 On otherhand ld. Representative of assessee has argued that ld. CIT(Appeals) has decided issue correctly and judiciously and on basis of subsequent finding of Tribunal in assessee s own case in ITA No. 2138/Mum/2012 order dated 11.10.2013 for assessment year 2008-09. Therefore, finding of CIT(A) in question on this issue is not liable to be disturbed in accordance with law. Order of CIT(A) perused. Before going further, it is necessary to advert finding of CIT(A) on record on this issue which reads as under:- 5.1 In Ground no. 1, appellant has challenged assessment of rent receipts from letting out of business centre premises under head "income from house property" as against "income from business" as declared by appellant. On perusal of orders passed by ITAT in appellant s own case for A.Ys. 2005-06, 2006-07, 2007-08 and 2008-09, I find that issue was decided in favour of appellant and against revenue. relevant extract from Hon'ble Tribunal's order in ITA No. 2138/Mum/2012 dated 11.10.2013 for A.Y 2008 - 09 is as follows: "6. We have heard rival contention, perused relevant findings of authorities below and material available on record. issue before us has been decided in favour of assessee after detail discussion by Tribunal in earlier years. At time of hearing, learned Counsel for assessee has also filed copy of business centre agreements and floor plan of building, showing that most of area is being used by assessee for its own business and 4 ITA No.1622/M/2014 &C.O.96/M/15 A.Y. 2010-11 other part has been let out due to temporary suspension of manufacturing business pending decision of Court cases by workers. On perusal of these details and also other attendant facts, we find that this issue has been discussed at length by Tribunal and has arrived to conclusion that business centre receipts has to be treated as business income. detail finding has been given in ITA No.4516/Mum/2010 in assessment year 2005-06, order dated 30th November, 2011, which has been followed in subsequent years i. assessment year 2006-07 and 2007-08 also. Consistent with earlier years judicial precedence, we also direct Assessing Officer to treat business centre receipts to be assessed as business income and not as income from house property. Thus, ground raised by Revenue is treated as dismissed. 4.2 CIT(A) passed order on basis of finding of ITAT in ITA No.2138/Mum/2012 dated 11.10.2013 for A.Y 2008 09 in assessee own case and copy of order has been placed on record in which Tribunal has considered finding of M/s. Shambu Investment Pvt. Ltd. vs. CIT (2003) (263 ITR 143) and thereafter income of assessee has been treated as income from business. tribunal has considered copy of business centre agreements and floor plan of building, showing that most of area was being used by assessee for its own business and other part was let out due to temporary suspension of manufacturing business pending decision of Court cases by workers. We find no ground to deviate finding of order of Tribunal in assessee s own case mentioned above. Respectfully following order of Tribunal we decide this issue in favour of assessee and against revenue. C.O.No.96/M/2015 (By assessee ) : 5. assessee has raised cross objection regarding levy of interest u/s. 234(b) and 234(c ). This issue is consequential in nature 5 ITA No.1622/M/2014 &C.O.96/M/15 A.Y. 2010-11 which is outcome of appeal filed by revenue and accordingly is liable to be dealt with accordingly. 6. In result, appeal of revenue is dismissed and C.O. of assessee consequential as stated above. Order pronounced in open court on 28th , September,2016. 28 , 2016 Sd/- Sd/- (R.C.SHARMA) (AMARJIT SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated : 28th September, 2016 JV, Sr. PS Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, //True Copy// /(Dy./Asstt. Registrar) ITAT, Mumbai 6 Income tax Officer Ward 20(3)-1, Mumbai v. M/s. Electronics & Engineering Co