2021 (6) TMI 422 - AT - Income Tax

Correct head of income - income from letting out of some of business assets - Business Income or income from house property - HELD THAT - As perused the order passed by co-ordinate bench of Tribunal in assessee s own case for A.Y. 2011-12 2020 (2) TMI 69 - ITAT DELHI wherein proposition mooted out by the assessee that the rental income from letting out steel units and quarter situated in the steel units is to be treated as income from house property has been accepted. As revenue has failed to bring on record any change in the facts and circumstances of the case to treat the income by way of rental income earned by the assessee from letting out of steel units and quarters situated therein to be treated as business income. When there is no change in the facts and circumstances of the case, and this rental income has been accepted as income from the house property in earlier assessment years for 2007-08, 2009-10, 2010-11 and 2011-12, there is no ground to depart from the principles of Consistency . So finding no illegality or perversity in the impugned order passed by Ld. CIT(A), the appeal filed by the revenue is hereby dismissed.

Issues:
1. Whether the income from letting out business assets should be considered as "Income from House Property" or "Business Income"?
2. Whether the principle of res judicata applies in Income Tax proceedings for different assessment years?
3. Assessment of rental income from steel units and quarters as per previous tribunal orders.

Issue 1:
The Appellate Tribunal considered whether the income from letting out business assets should be categorized as "Income from House Property" or "Business Income." The Revenue challenged the order of the Commissioner of Income-tax (Appeals) regarding the assessment years 2014-15. The Assessing Officer (AO) had treated the rental income as "Business Income," while the assessee contended it should be considered as "Income from House Property." The Tribunal noted that the assessee had treated a portion of the rental income as "Business Income" in previous years. The Tribunal referred to a previous order where the rental income from steel units was accepted as "Income from House Property." The Tribunal upheld the consistency principle and dismissed the Revenue's appeal, stating no change in circumstances justified a departure from treating the income as "Income from House Property."

Issue 2:
The second issue revolved around the application of the principle of res judicata in Income Tax proceedings for different assessment years. The Revenue argued that the Commissioner of Income-tax (Appeals) erred in allowing relief to the assessee based on previous orders in the assessee's own case. The Revenue contended that the principle of res judicata does not apply in Income Tax proceedings as each assessment year is separate. However, the Tribunal found no illegality or perversity in the Commissioner's order and dismissed the Revenue's appeal.

Issue 3:
The Tribunal analyzed the assessment of rental income from steel units and quarters based on previous tribunal orders. It noted that the rental income had been accepted as "Income from House Property" in earlier assessment years. The Tribunal highlighted the lack of change in facts and circumstances to justify treating the income differently. As the rental income had consistently been treated as "Income from House Property" in previous years, the Tribunal upheld the Commissioner's decision and dismissed the Revenue's appeal.

In conclusion, the Appellate Tribunal upheld the categorization of rental income from letting out business assets as "Income from House Property" based on the principle of consistency and previous tribunal orders. The Tribunal emphasized the importance of maintaining consistency in tax assessments and dismissed the Revenue's appeal, finding no grounds to depart from the established treatment of the income.

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