Ita/314/2019 Of The Principal Commissioner Of Income Tax v. M/S. Ptl Enterprises Limited

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI WEDNESDAY, THE 11 DAY OF JANUARY 2023 / 21ST POUSHA, 1944 ITA NO. 314 OF 2019 AGAINST THE ORDER ITA 162/2017 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/S: THE PRINCIPAL COMMISSIONER OF INCOME TAX KOCHI-I, KOCHI, CENTRAL REVENUE BUILDING, I.S. PRESS ROAD, KOCHI-682018. BY ADVS. SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S: M/S. PTL ENTERPRISES LIMITED, 6TH FLOOR, CHERUPUSHPAM BUILDING, SHANMUGHAM ROAD, KOCHI-682031. (PRESENT ADDRESS - 3RD FLOOR AREEKAL MANSION, NEAR MANORAMA JUNCTION, PANAMPILLY NAGAR, KOCHI-682036) BY ADVS. SRI.JOSEPH MARKOSE (SR.) SRI.V.ABRAHAM MARKOS; SRI.ABRAHAM JOSEPH MARKOS SRI.ISAAC THOMAS; SHRI.VIPIN ANTO H.M. SHRI.ALEXANDER JOSEPH MARKOS SHRI.SHARAD JOSEPH KODANTHARA THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 11.01.2023, ALONG WITH ITA.1/2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA Nos.314/2019 & 1/2021 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI WEDNESDAY, THE 11 DAY OF JANUARY 2023 / 21ST POUSHA, 1944 ITA NO. 1 OF 2021 AGAINST THE ORDER ITA 84/2020 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/S: THE PRINCIPAL COMMISSIONER OF INCOME TAX, KOCHI-I, KOCHI, CENTRAL REVENUE BUILDING, IS PRESS ROAD, KOCHI-682 018 BY ADVS. SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES) JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S: M/S PTL ENTERPRISES LIMITED 6TH FLOOR, CHERUPUSHPAM BUILDING, SHANMUGHAM ROAD, KOCHI-682 031, PRESENT ADDRESS, 3RD FLOOR AREEKKAL MANSION, NEAR MANORAMA JUNCTION, PANAMPILLY NAGAR, KCHI-682 036 BY ADVS.JOSEPH MARKOSE (SR.) V.ABRAHAM MARKOS; ABRAHAM JOSEPH MARKOS ISAAC THOMAS; P.G.CHANDAPILLAI ABRAHAM ALEXANDER JOSEPH MARKOS SHARAD JOSEPH KODANTHARA THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 11.01.2023, ALONG WITH ITA.314/2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA Nos.314/2019 & 1/2021 J U D G M E N T [ITA Nos.314/2019, 1/2021] S.V. Bhatti, J. We have heard learned Senior Counsel Mr P K R Menon and Mr Joseph Markos for the parties. 2. The Principal Commissioner of Income Tax, Cochin/Revenue, is the appellant. M/s.PTL Enterprises Limited/assessee is the respondent. The details of the year of assessment, orders etc., are stated in the following table: 3. The appeals are filed by raising the following ITA Nos.314/2019 & 1/2021 substantial questions of law: ITA 314/2019 1(a) Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal is right in law and fact in holding the lease rent as income from business and is not such a finding perverse? 1(b) Whether, on the facts and in the circumstances of the case, should not the Hon'ble Tribunal have followed its own earlier order held in favour of the Revenue as "Income from Other Sources"? and is not the present inconsistent order perverse and against judicial decorum always insisted on by the Hon'ble Tribunal? ITA 1/2021 1(a) Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal is right in law and fact in holding the lease rent as income from business and is not such a finding perverse? 1(b) Whether, on the facts and in the circumstances of the case, should not the Hon'ble Tribunal have followed its own earlier order held in favour of the Revenue as "Income from Other Sources"? and is not the present inconsistent order perverse and against judicial decorum always insisted on by the Hon'ble Tribunal? ITA Nos.314/2019 & 1/2021 ITA No.314/2019 4. The learned Counsel state that ITA No.314/2019 is filed against the common order dated 06.05.2019. Against the common order, the Revenue filed ITA No.250/2019 and this Court, by judgment dated 23.07.2021, allowed the appeal and remanded the matter to the Assessing Officer for consideration 1(b) Whether, on the facts and in the circumstances of the case, should not the Hon'ble Tribunal have followed its own earlier order held in favour of the Revenue as "Income from Other Sources"? and is not the present inconsistent order perverse and against judicial decorum always insisted on by the Hon'ble Tribunal? ITA Nos.314/2019 & 1/2021 ITA No.314/2019 4. The learned Counsel state that ITA No.314/2019 is filed against the common order dated 06.05.2019. Against the common order, the Revenue filed ITA No.250/2019 and this Court, by judgment dated 23.07.2021, allowed the appeal and remanded the matter to the Assessing Officer for consideration afresh. The operative portion in the impugned judgment reads thus: “13. Since we have been apprised of the surrender of the lease that took place in 2017 and that too for the reason that the assessee had not commenced any activity in the leased land, it is necessary to reconsider the issue regarding whether the rental income could be treated as a business income or income from other sources, in the light of the said development for the period from 2010-11 onwards. None of the authorities had the benefit of appreciating the assessees' claim in the light of the surrender of lease in 2017 and the fact that the surrender was occasioned due to the failure of the assessee to commence any manufacturing activity in the leased land. 14 In view of the above, we are of the opinion that the claim of the assessee to treat the rental income for the year 2010-11 as a business income and not as an income from other sources is required to be revisited by the assessing officer himself, after considering the entire matter afresh and after giving an opportunity of hearing to the assessee. 15. The second and third questions relate to the disallowance of the professional charges, interest charges and value of shares gifted to the CEO. We are of the view that those issues are ancillary or incidental to the first question and hence the said questions can also be revisited by the assessing officer. therefore, set aside the order of the Tribunal We, in ITA.No.200/Coch/2015 dated 29.09.2016 and remand the case to the assessing officer for a fresh consideration of all the questions in accordance with law.” 4.1 The questions raised in the appeal are answered on the same line, and the matter is remitted to the Assessing Officer for fresh disposal. The questions are answered in favour of the Revenue for statistical purposes. The orders of the ITA Nos.314/2019 & 1/2021 Tribunal, Appellate Authority, and the Assessing Officer are set aside to the extent covered by the judgment dated 23.07.2021, and the matters remitted to the Assessing Officer for fresh disposal in accordance with law by keeping in perspective the judgment dated 23.07.2021. ITA 1/2021 5. The appeal is directed against the judgment dated 06.07.2020. The impugned order is delivered following the common order dated 06.05.2019 in ITA No.160/Coch/2017 for the Assessment Year 2011-12 of the Income Tax Appellate Tribunal. As noted in the preceding paragraphs, the common order of the Tribunal is set aside, and the matter is remitted to the Assessing Officer for fresh disposal. 6. To conclude, the orders of the Tribunal, Appellate Authority and the Assessing Officer, to the extent covered by judgment dated 23.07.2021, are set aside. The matter is ITA Nos.314/2019 & 1/2021 remitted to the Assessing Officer for fresh disposal. Income Tax Appeals are allowed, and matters are remitted to the Assessing Officer. Sd/- S.V.BHATTI JUDGE Sd/- BASANT BALAJI JUDGE jjj ITA Nos.314/2019 & 1/2021 APPENDIX OF ITA 1/2021 PETITIONER ANNEXURES ANNEXURE -A COPY OF ASSESSMENT ORDER U/S 143(3) DATED 16.12.2016 ANNEXURE-B COPY OF CIT (APPEALS) ORDER IN APPEAL NO.ITA 331/CIT (A)-I/2016-17 DATED 10.12.2019 ANNEXURE-C COPY OF THE APPELLATE ORDER OF THE ITAT COCHIN BENCH IN ITA NO.84/COCH/2020 DATED 06.07.2020 FOR A.Y.2014-15 PETITIONER ANNEXURES ANNEXURE A ANNEXURE B ANNEXURE C Authority and the Assessing Officer, to the extent covered by judgment dated 23.07.2021, are set aside. The matter is ITA Nos.314/2019 & 1/2021 remitted to the Assessing Officer for fresh disposal. Income Tax Appeals are allowed, and matters are remitted to the Assessing Officer. Sd/- S.V.BHATTI JUDGE Sd/- BASANT BALAJI JUDGE jjj ITA Nos.314/2019 & 1/2021 APPENDIX OF ITA 1/2021 PETITIONER ANNEXURES ANNEXURE -A COPY OF ASSESSMENT ORDER U/S 143(3) DATED 16.12.2016 ANNEXURE-B COPY OF CIT (APPEALS) ORDER IN APPEAL NO.ITA 331/CIT (A)-I/2016-17 DATED 10.12.2019 ANNEXURE-C COPY OF THE APPELLATE ORDER OF THE ITAT COCHIN BENCH IN ITA NO.84/COCH/2020 DATED 06.07.2020 FOR A.Y.2014-15 PETITIONER ANNEXURES ANNEXURE A ANNEXURE B ANNEXURE C APPENDIX OF ITA 314/2019 COPY OF THE ASSESSMENT ORDER U/S.143(3) DATED 24.03.2016 FOR A.Y.2013-14. COPY OF CIT (APPEALS) ORDER IN ITA 241/EKM/CIT(A)-I/2016-17 DATED 23.02.2017. COPY OF THE APPELLATE ORDER OF THE ITAT COCHIN BENCH, COCHIN IN ITA NO.162/COCH/2017 DATED 06/05/2019 FOR A.Y.2013-14.