2016 (7) TMI 167 - AT - Income Tax

Receipt of rental income - profit and gains of business or profession OR income from house property - Held that - We have gone through the decision of Mumbai Bench of the Tribunal in the case of Matru Ashish Co-operative Housing Society Ltd (2010 (8) TMI 1035 - ITAT MUMBAI) which is exactly on identical facts decided the issue that the income of the assessee-society is to be assessed as income from house property and not business income. Accordingly respectfully following the decision of coordinate bench we are of the view that the assessee has rightly treated the income from property and we hold so. - Decided in favour of assessee

Summary

Issues Involved:
1. Delay in filing appeal before CIT(A) for assessment year 2008-09.
2. Tax treatment of income from BPL Mobile Communication Ltd.
3. Imposition of penalty under section 271(1)(c) by AO and confirmation by CIT(A).

Detailed Analysis:
1. Delay in filing appeal before CIT(A) for assessment year 2008-09:
The ITAT Mumbai considered the delay in filing the appeal by the assessee and the subsequent dismissal of the appeal by the CIT(A) as unadmitted due to inordinate and unreasonable delay. The ITAT noted the delay of 700 days in filing the appeal and the reasons provided by the assessee, including lack of understanding about the legal position and consultation with a lawyer after receiving a notice from the AO. The ITAT found the reasons given by the assessee to be bonafide and allowed the appeal for condonation of delay, directing the appeal to be restored to the file of the CIT(A) for adjudication on merits.

2. Tax treatment of income from BPL Mobile Communication Ltd:
The ITAT addressed the issue of tax treatment of income received by the assessee from BPL Mobile Communication Ltd for the installation of a telecommunication tower on the terrace of the building. The AO treated this income as business income, which was confirmed by the CIT(A). The ITAT referred to a previous decision by the Mumbai Bench of the Tribunal in a similar case and held that the income should be assessed as income from house property subject to deduction under section 24 of the Act. Relying on the precedent, the ITAT allowed the appeal of the assessee, concluding that the income was rightly treated as income from property.

3. Imposition of penalty under section 271(1)(c) by AO and confirmation by CIT(A):
Regarding the imposition of penalty under section 271(1)(c) by the AO and confirmation by the CIT(A), the ITAT noted that since the quantum addition was deleted in a previous appeal, the penalty imposed by the AO did not have a basis to stand. Citing a previous Tribunal order in the assessee's own case, the ITAT directed the AO to delete the penalty, maintaining consistency with the earlier decision. Consequently, the penalty appeals of the assessee for both years were allowed, and the penalty imposed was directed to be deleted.

In conclusion, the ITAT allowed the quantum appeal for the assessment year 2006-07 for statistical purposes, allowed the quantum appeal for the assessment year 2008-09, and allowed the penalty appeals of the assessee for both years. The ITAT dismissed the appeal challenging the penalty imposed for the assessment year 2008-09 as infructuous due to the earlier decision on delay condonation.