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TMI Blog2018 (5) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of CIT(A) for the A.Y.2009-10 and 2014-15 in the matter of order passed u/s.143(3) r.w.s. 147 of the IT Act, 1961. 2. Grievance of assessee relates to treating the income from warehouse as income from house property instead of business income . 3. At the outset, learned AR placed on record the order of the Tribunal in assessee s own case wherein income from warehousing was accepted by the Tribunal vide order dated 01/02/2018 in the A.Y.2008-09 and 2013-14 as income from business. 4. The precise observation of the Tribunal was as under:- 8. We have carefully considered the rival submissions. As the aforesaid discussion reveals, the sum and substance of the dispute revolves around the character of amount received by the assessee against giving of godown space on rent. Notably, the appellantassessee is engaged in the business of shipping agency and warehousing. The property in question, which is a warehouse, is located at Kandla where assessee is carrying out its business activities of shipping agency, etc. The crux of the stand of Revenue is that the impugned sum has been earned by the assessee for making available its warehouse/godown space and, therefore, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . As per the Hon'ble Madras High Court, the income earned from letting-out of warehouse and godown was chargeable under the head income from business having regard to the facts and circumstances of the case. In the case before the Hon'ble High Court, assessee was engaged in the business of warehousing, handling and transport business and it was providing storage facility to manufacturers, traders and other concerns engaged in warehousing activity and the services provided included several auxiliary services such as pest control, preventive measures against decay of goods stored due to vagaries of moisture/temperature, fungus formation, etc., besides security and protection of goods stored. In this context, the decision of the Mumbai bench of the Tribunal in the case of Vora Warehousing (P.) Ltd. vs. ACIT, [1999] 70 ITD 518 (Mum)(SMC) is also relevant where it has been observed that the warehouses constructed with facility to store goods are to be considered as commercial assets and income realised by letting-out such facility was assessable as business income . Considered in the aforesaid light, in our view, in the present case, the Assessing Officer was not justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e background of its own facts as they were emerging from the order of the Hon'ble High Court reported in CIT vs Shambhu Investment Pvt. Ltd., 249 ITR 47 (Kolkata). In fact, a perusal of the judgment of the Hon'ble Kolkata High Court in the case of Shambhu Investment Pvt. Ltd. (supra) would reveal that the Hon ble Court clearly negated that merely because the income is attached to any immoveable property, that cannot be the sole factor for assessment of such income as income from house property . It further prescribed that if the main intention of the assessee is to let-out the property, the income thereof must be considered as rental income or income from house property , whereas if the primary object is to exploit the immoveable property by way of complex commercial activity, in that event, it should be held as a business income . In the background of the aforesaid legal position, the Hon'ble High Court found on facts of the case before it that the income was earned merely from letting-out of property and, therefore, held it to be assessable as income from house property . The said legal position has been approved by the Hon'ble Supreme Court in its judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) on said decision is clearly untenable. 11. In this background, we, therefore, conclude by holding that the lower authorities have erred in assessing the receipts from warehousing activity as income from house property instead of treating it as business income . Accordingly, we set-aside the order of the CIT(A) and direct the Assessing Officer to recompute the income by treating the receipt from warehousing activity as business income . Thus, on this aspect, assessee succeeds. 12. Insofar as Assessment Year 2008-09 is concerned, the controversy stands on an identical footing so far as the merits of the issue are concerned. Therefore, our decision in appeal of assessee being ITA No. 5558/Mum/2016 for Assessment Year 2013-14 shall apply mutatis mutandis to the appeal of assessee for Assessment Year 2008-09 also. 13. So, however, in Assessment Year 2008-09 the captioned proceedings are as a consequence of assessment being reopened by issuance of notice under Sec. 147/148 of the Act. In the original assessment finalised u/s 143(3) of the Act dated 06.11.2009, the income from godown rent was assessed as business income . The assessee has also challenged the vali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asons what is of importance is to formulate only a prima facie opinion, yet, in the present case, we find that such an onus has not been discharged by the Assessing Officer inasmuch as he does not make out any case for making a departure from the earlier accepted stand in the scrutiny assessments. For this reason also, we are inclined to uphold the stand of the assessee that the initiation of proceedings under Sec. 147/148 of the Act is flawed and is based on a mere change of opinion without there being any new material or any change in facts or law post the original assessment. Thus, on this aspect also, assessee succeeds. 5. We had carefully gone through the order of the Tribunal, wherein Tribunal after considering various judicial pronouncements and after applying the same to the facts of the instant case reached to the conclusion that income from warehousing was liable to be assessed under the head business income rather than income from house property . As the facts and circumstances during the years under consideration are same, respectfully following the order of the Tribunal in assessee s own case, we do not find any justification for treating the warehousing incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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