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TMI Blog2017 (1) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... The factual matrix of the case on hand in similar to that of the case of CIT vs. NDR Warehousing P. Ltd. (2014 (12) TMI 189 - MADRAS HIGH COURT) and the same would squarely cover the issue in the case on hand. Moreover the Department having accepted the assessee’s position in earlier years, even in scrutiny assessments that the income from M/s. Strand Book Stall even though bearing the nomenclature of rent was exigible as ‘business income’, we find that it is nobody’s case that the factual matrix of the case has undergone any such change that required action that such income was to be taxed under the head ‘income from other sources’ and not ‘business income’ as declared by the assessee. - Decided in favour of assessee. - ITA No. 4466/Mum/2013 - - - Dated:- 9-11-2016 - Shri Jason P. Boaz, Accountant Member and Shri Amarjit Singh , Judicial Member For The Appellant : Shri Nitesh Joshi For The Respondent : Shri Ranathir Gupta Per Jason P. Boaz, A.M. This appeal by the assessee is directed against the order of the CIT(A)- 1, Mumbai dated 03.03.2011 for A.Y. 2006-07. The assessee has filed a petition for condonation of delay in filing this appeal which is acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r taking charge of the company I saw to it that the Accounts of the company from then were finalized which happened somewhere in December, 2012. Thereafter in response to notices received from the Income-tax Department returns of income have also been filed for Assessment Years 2008-09 to 2012-2013, 8. I Say that subsequently around May 2013 the present Auditor of the company advised that appeal against the CIT(A) s impugned order dated March 03, 2011 has remained to be filled. Pursuant thereto we have now prepared and filed the appeal on 4/6/2013 which involves a delay of 627 days. 9. I say that delay in filing the appeal has occurred on account of bonafide reasons because there was no responsible executive in the company. No prejudice would be caused to the revenue if the delay is condoned. On the other hand, if the appeal is not admitted a meritorious matter may get dismissed without adjudication. 10. I say that the above circumstances, I most respectfully submit that the delay involved in filing the appeal may be condoned. 2.2 In support of the petition for condonation of delay of 728 days in filing the appeal and accompanying affidavit, the learned A.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e collected. In this view of the matter, we accept the reasons cited by the assessee for condonation of delay in filing this appeal and accordingly condone the delay of 728 days and admit the appeal for consideration on merits. ORDER 3. The facts of the case, briefly are as under: - 3.1 The assessee company, engaged in business of book binding, publishing, storage of books, etc. filed its return of income for A.Y. 2006- 07 on 30.11.2006 declaring loss of ₹ 1,20,061/-. The return was processed under section 143(1) of the Income Tax Act, 1961 (in short 'the Act') and the case was subsequently taken up for scrutiny. The assessment was completed under section 143(3) of the Act vide order dated 27.10.2008 wherein the income of the assessee was determined at ₹ 10,85,000/-. In doing so, the AO treated the rent of ₹ 15,50,000/- received by the assessee from Strand Book stall and declared as business income to be income from house property; allowing the assessee only deduction of 30% on account of repairs and thereby disallowing the entire business expenditure claimed by the assessee. 3.2 Aggrieved by the order of assessment dated 27.10.2008 for A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee concern. It is submitted that the main intention of the activities undertaken by the assessee was of commercial exploitation of its business asset and not letting out of its commercial property and therefore the resultant income must be held to be business income of the assessee and not income form house property as has been misconstrued by the authorities below. It was also pointed out that expenditure incurred on telephone, electricity, municipal assessment bills, etc. was being borne only by the assessee, the keys, possession and control of the entire factory premises was in the possession and control of the assessee. The learned A.R. contends the above facts clearly demonstrate that the assessee was carrying on its business activity of providing the aforesaid services to M/s. Strand Book Staff in a systematic and organized way and therefore though the receipt from Strand Book Stall may be mentioned as rent, the consideration was for rendering of various services and the premises was only incidental, and hence the nomenclature given cannot be the decisive factor as to under which head the same is exigible to tax. 4.2.2 The learned A.R. of the assessee further submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emises at Thane, was in the possession and control of the assessee only and expenses incurred in connection thereto, such as electricity, telephone charges, etc. were borne exclusively by the assessee. In this factual matrix of the case, it appears to us that the assessee has established that it was carrying on its activities of commercially exploiting its business asset, i.e. the said factory premises at Thane, to render the aforementioned services to M/s. Strand Book Stall for a consideration which constitute business income . It is not disputed that this position, i.e. such income for rendering of similar services to M/s. Strand Book Stall was accepted as business income as declared by the assessee, even in scrutiny assessments under section 143(3) of the Act for A.Y. 1996-97 and 2003-04. While the principle of res-judicata is not applicable to income tax proceedings, we observe that the authorities below have not brought on record any material to prove that the factual matrix of the case on this issue has undergone any change in the year under consideration in the case on hand. 4.4.2 In the case of CIT vs. NDR Warehousing P. Ltd. (2015) 372 ITR 690 (Mad), which we have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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