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Issues Involved:
1. Classification of rental income from plinths as 'Income from business' vs. 'Income from house property'. 2. Applicability of depreciation rate on plinths. Summary: Issue 1: Classification of Rental Income The primary issue was whether the rental income from plinths should be treated as 'Income from business' or 'Income from house property'. The revenue argued that the income should be classified as 'Income from house property' based on precedents from the Hon'ble High Courts, including Parekh Traders vs. CIT, Rampur Industries Ltd. vs. CIT, and Scindia Potteries Pvt. Ltd. vs. CIT. However, the Tribunal had previously decided in favor of the assessee, treating the income as 'Income from business or profession' for the assessment year (A.Y.) 2003-04, and this decision was not challenged by the revenue. For A.Y. 2004-05 and 2005-06, the Tribunal noted that the revenue did not contest the classification of the rental income in the earlier years, focusing only on the depreciation rate. The Tribunal upheld the CIT(A)'s decision to treat the rental income as 'Income from business or profession', citing consistency and lack of new facts to warrant a different view. Issue 2: Depreciation RateThe second issue was the rate of depreciation applicable to the plinths. The assessee claimed depreciation at 10%, which was initially disallowed by the Assessing Officer (AO) but later allowed by the CIT(A). The Tribunal confirmed the CIT(A)'s decision, referencing previous Tribunal orders for A.Y. 2003-04 and 2006-07, which had consistently allowed the 10% depreciation rate on plinths. Conclusion:The Tribunal dismissed the departmental appeals for A.Y. 2004-05 and 2005-06, both on the grounds of low tax effect (less than Rs. 2 lakh) and on the merits, as the issues were squarely covered in favor of the assessee by previous Tribunal decisions. The appeals were dismissed ex-parte qua the ld. DR, who was not present at the time of hearing. Order pronounced in the Open Court on 05.07.2011.
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