Commissioner Of Income Tax, Panchkula v. M/S Haryana Tourism Corporation Ltd

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARHIncome Tax Appeal No.567 of 2009DATE OF DECISION : 4[th] February, 2010 Commissioner of Income Tax, Panchkula ...Appellant Vs. M/s Haryana Tourism Corporation Ltd. ...Respondent CORAM:HON’BLE MR.JUSTICE M.M.KUMARHON’BLE MR.JUSTICE JITENDRA CHAUHAN Present :Mr.Yogesh Putney, Advocate for the appellant -- 1.To be referred to the reporters or not? 2.Whether the judgment should be reported in the Digest? M.M.KUMAR,J. The Revenue has approached this Court by filing theinstant appeal under Section 260A of the Income Tax Act, 1961 (forbrevity ‘the Act’) challenging order dated 25.03.2009 passed by theIncome Tax Appellate Tribunal, Chandigarh Bench (for brevity ‘thetribunal’) in ITA No.1056/Chd/2008 in respect of assessment year2005-06. The revenue has claimed that the following substantialquestions of law would arise for determination of this Court :- “Whether on the facts and in the circumstances of thecase, ld ITAT is right in law in holding that the rentalincome earned by the asseessee from the letting out ofshops is assessable under the head ‘income from Houseproperty’ and not income from ‘Profits and gains ofbusiness and professions’? “Whether the ld.ITAT was right in following its ownjudgment in the assessee’s case for the assessment year1997-98 ignoring the fresh facts brought on record by theAssessing Officer and by ignoring the ratio of the High Court judgments relied upon by the Assessing Officer andby the Commissioner of Income Tax (Appeals).? “Whether on the facts and in the circumstances of thecase, the ld. ITAT is right in law the ld. ITAT is right indeleting the addition of Rs.1070351/- on account ofbreakage of crockery & cutlery ignoring the fact that theamount in question was in fact a provision and the claim ofthe assessee was on estimated basis and not on the basisof actual expenditure incurred’? “Whether on the facts and circumstances of the case andin law, the assessee is entitled to double deduction oncapital assets i.e. depreciation at the specified rate as wella provision claimed at 2% of food cost”? A perusal of the order passed by the tribunal would showthat assessee-respondent is a public sector undertaking engaged in thebusiness of running of tourist complexes, hotels/motels/resorts. It hasdecaled rental income of Rs.1,16,50,981/- under the head incomefrom house property after claiming deduction under Section 24 of theAct. It had claimed that similar deductions were made in the earlieryears. An identical issue arose in the assessment years 1997-98,1998-99 and 2002-03 and the tribunal had accepted such income as‘income from house property’. However, the assessing officer went intofurther details to record a contrary finding to the effect that the incomederived by the assessee-respondent has been in the nature of businessincome. It is thus evident that an identical issue in respect ofassessment year 1997-98 was decided in favour of the assessee-respondent. On an appeal filed by the revenue being ITANo.812/Chandi/2001 it was held by the tribunal that such income has -3- to be regarded as income from house property and accordingly theassessee was held entitled to the statutory deductions admissibleunder Section 24 of the Act. The aforesaid order of the tribunal hasattained finality. The tribunal accordingly followed the principle ofconsistency by refusing to deviate from its earlier decision. -3- to be regarded as income from house property and accordingly theassessee was held entitled to the statutory deductions admissibleunder Section 24 of the Act. The aforesaid order of the tribunal hasattained finality. The tribunal accordingly followed the principle ofconsistency by refusing to deviate from its earlier decision. We are also of the view that the tribunal has notcommitted any error of law by granting deductions under Section 24 asthe deduction is based on findings of facts that the income is derivedfrom house property. Essentially it is a finding of fact and not aquestion of law which may warrant admission of the appeal. Theprinciple of consistency laid down by Hon’ble the Supreme Court in thecase of Berger Paints India Ltd. v. CIT(2004) 266 ITR 99, CIT v.J.K.Charitable Trust (2009) ISCC 196 and C.K.Gangadharan v. CIT(2008) SCC 739 would guide us that once similar proposition has beenaccepted by the revenue in respect of assessment year 1997-98, thenit is not open to it to challenge a similar finding and deviate from itsearlier stand. Therefore, question no.1 and 2 have to be answeredagainst the revenue and in favour of the assessee-respondent. In respect of question no.3 and 4, similar situation wouldemerge from a perusal of para 4 of the impugned order. The issue ofdeleting the amount on account of breakage of crockery has beenconsidered. The contention of the assessee-respondent has prevailedbecause similar issue was raised before Delhi Bench of the Tribunal inITA No.5651/Del./1997. The aforesaid view of Delhi Bench wasfollowed by the Chandigarh Bench also in ITA Nos.825 and875/Chandi/1999 in the case of Haryana Hotels Ltd. decided on08.04.2004. Even in the case of assessee-respondent similar view has -4- been followed in ITA No.755/Chandi/2002. Accordingly, the aforesaidground also would not stand scrutiny of the principle of consistency aslaid down in various judgments referred in the preceding para.Therefore, question nos.3 and 4 would also deserve to be answeredagainst the revenue-appellant and in favour of the assessee-respondent. As a sequel to the above discussion, the appeal does notwarrant admission and the same is accordingly dismissed. (M.M.KUMAR) JUDGE February 04, 2010p.singh (JITENDRA CHAUHAN) JUDGE