TaxTMI 
TaxTMI 
2018 (4) TMI 1055
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....rejection of assessee's books of account u/s 145(3) considering the facts of the case. 3. That the Ld. CIT(A)'s order is contrary to the law and fact of the case. 4. The appellant craves leaves to, add to, alter or modify any one or all of the grounds of appeal mentioned above." Shri Arindam Bhattacherjee, Ld. Departmental Representative appeared on behalf of Revenue and Shri Vikash Surna, Ld. Advocate appeared on behalf of assessee. 2. At the outset, it is noticed that appeal of Revenue is barred by limitation by 3 days. Revenue has filed condonation petition supported by affidavit explaining the reasons for the delay. On query from the Bench, Ld. Counsel for the assessee has not opposed the condonation rather he conceded that delay can be condoned. In view of the reasons given in the condonation petition and concession given by Ld. Counsel for the assessee, we condone the delay and admit the appeal of Revenue. 3. The brief description about the assessee-firm is that it is partnership firm and engaged in providing warehousing, go-down, blending and packing services. The assessee is providing such services under the agreements with the big tea companies such as Tata Tea, ....
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....n'ble Supreme Court Judgement in the case Sambhu Investment and Poddar Cement reported in 263 ITR 143 and 226 ITR 625. The appellant explained that the appellant has not received pure rent and it is a complex commercial activities involved in storing blending and packaging. Therefore, the facts of the case relied upon by the AD are not applicable in the appellant's case. In the similar facts and circumstances Hon'ble ITAT Kolkata in the case of Dutta Properties Pvt. Ltd. held that income from warehousing activity as business income in ITA No. 973 to 979/Ko1/2012 A.Ys 1999-2000 to 2005-06 dated 01/07/2015. Hon'ble Madras High Court in the case of CIT vs. NDR Warehousing Pvt. Ltd. reported in ITR 690 held warehousing, handling and transportation as business income. In the case of the appellant, in the immediately preceding assessment year and the earlier assessment years the entire receipts were assessed as business income. During the appeal A/R of the appellant stated that in the subsequent year also the gross receipts were assessed as business income. Though Rule res judicata does not applicable to the income tax assessment, the rule of consistency does applicable. ....
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....nder: "As a general rule the principle of res judicata is not applicable to decision of Income-tax Authorities. An assessmentfor a particular year is final and conclusive between the parties only in relation to the assessment for that year and the decisions given in an assessment for an earlier year are not binding either on the assessee or the Department in a subsequent year. But this rule is subject to limitations, for there should be finality and certainty in all litigations including litigation arising out of the Income-tax Act and an earlier decision on the same question cannot be reopened if that decision is not arbitrary or perverse, if it had been arrived at after due inquiry, if no fresh facts are placed before the Tribunal giving the later decision, and if the Tribunal giving the earlier decision has taken into consideration all material evidence. A Tribunal like the Appellate Tribunal, should be extremely slow to depart from a finding given by an earlier Tribunal ..... There is also a further limitation, namely, that the effect of revising a decision in a subsequent year should not lead to injustice and the court must always be anxious to avoid injustice to the assess....
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....s that the view taken by the AO in the preceding years should not be disturbed, unless there was a change in the factual and legal position. Therefore, following the rule of consistency and placing reliance on the decision cited (supra) I hold that the entire gross receipts of the appellant should be assessed as business income. Accordingly, I direct the AO to assess the entire gross receipts as business income and allow the deductions as per section 28 to 43 of IT Act as per law. Ground No.3 & 5 stand disposed off accordingly." Aggrieved by this, now Revenue is in appeal before us. 7. The ld. DR before us supported the order of A.O. On the other hand the ld. AR before us filed a paper book which running from pages 1 to 195 and submitted that the assessee has been showing income derived from the warehouse under the head of Income from Business & Profession in earlier and subsequent assessment years which was duly accepted by the Revenue. The ld. A.R. in support of his claim drew our attention on the assessment orders framed u/s 143(3) of the Act for the assessment year 2011-12, 2009-10 and 2004-05 which are placed on pages 22 to 41 of the paper book. The ld. A.R further sub....
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....enue in earlier & subsequent years. The Parties from whom the rental income was received by the assessee during the year were same from whom certain receipts were treated as business income. Thus the Revenue has treated part of the income from such parties as rental as well as business income. However, we note that the predominant object of the assessee was to provide the services to the parties as discussed in the preceding paragraphs. Thus, the income derived from the warehouse should be treated as business income. Therefore, mere deduction u/s 194I of the Act will not change the character of income received by the parties. We also observed that there is no change in the facts and circumstances in the impugned case in comparison to the previous assessment years and the Revenue in all other years have accepted the same as business income. Therefore in our considered view the principles of consistency should be applied. In this regard we find principles laid down in the judgment of Hon'ble Supreme Court in the case of Radhasoami Satsang vs. Commissioner of Income Tax (1992) 193 ITR 0321 (SC) are directly attracted to the instant case wherein it was observed that in the absence of a....
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....tivities carried on continuously in an organized manner with a set purpose and with a view to earn profit. Hence, all those activities were in the nature of adventure in the nature of trade and, therefore, liable to be assessed as business income and not as income from house property. Whether a particular letting is business, has to be decided in the circumstances of each case. Each case has to be looked at from businessmen's point of view to find out as to whether the letting was doing of a business or the exploitation of his property by the owner. A thing cannot, be by its very nature, be a commercial asset. A commercial asset is only an asset used in business and nothing else and business may be carried on with practically all things. Therefore, for ascertaining the income accruing from such asset, not only intention of the parties is to be seen but also the terms and conditions for which the asset is given for use. In the instant case, asset involved was warehouse and the commercial use was the only use which was possible and the resultant income as a natural corollary had to be assessed under the head 'Income from business' and not 'Income from house property'. While deciding ....
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....tion of remuneration among the partners of the firm. Applying the principle of consistency, there was no merit in the action of the Assessing Officer for changing its conclusion during the year under consideration without any change in the facts and circumstances as compared to the earlier years. Undisputedly, the assessee was deriving business income from the regular and systematic activity carried on in organized way in the field of 'warehousing'. As per the terms of the partnership deed, one of the business to be carried on by the assessee-firm was warehousing, the assessee was providing services like electricity, telephone, watchman, staff for managing loading and unloading of goods and keeping a watch on these goods stored in the warehouse along with other services required from time-to-time by the concerned customers. Furthermore, the frequency of transactions for the hire charges received by the assessee gave ample indication and evidence that entire activity was in the nature of business activity. As per the nature of property also, it was only capable of commercial use. Therefore, the resultant income as a natural corollary was under the head 'Income from business' and not....
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....ee under the said agreement was to let out portion of said property to various occupants by giving them additional right of using furniture and fixtures and other common facilities for which rent was being paid month by month in addition to the security free advance covering the entire cost of the said immovable property. Thus, the income derived from the said property was an income from property and should be assessed as such." In the above case the prime object was to let out the property but in the case before us the prime object was to provide the commercial services as discussed above. Thus no adverse inference can be drawn against the assessee based upon the above judgment. Respectfully following the same, we do not find any reason to interfere in the judgment of CIT(A) and accordingly conclude that the rental income in the aforesaid facts and circumstances should be treated as business income. Hence, the ground of appeal of revenue is dismissed. 9. Next issue raised by the Revenue in the grounds no. 2 is that ld. CIT(A) erred in deleting the addition Rs. 2,37,72,132/- made by the A.O. by estimating the profit after rejection of books of accounts of the assessee. 10. In t....
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....idences. Similarly, the appellant has claimed the purchase from various parties they did not have VAT registration. In the case of CAM enterprises and NHD enterprise who have billed Rs. 15,72,325/- and Rs. 22,45,239/- were not found at the address. The Assessing Officer held the goodown rents received by the appellant as the head income from property since the TDS was deducted u/s. 194I and the contractual job receipts as the business income. The expenditure in respect of godown rents, repair and maintenance of the godown and business expenses were mixed up. The appellant has not furnished the separate profit and loss account bifurcating the expenditure relating to income from property and business income. Therefore the AO has rightly rejected the books of account u/s. 1145(3) and estimated the income to his best judgement. Accordingly, there is no merit in the argument of the appellant that the rejection of books of accounts was bad in law. This ground of appeal is dismissed." Further Ld. CIT(A) directed the AO to assess the entire gross receipts as business income of the assessee and allow the deduction u/s 28 to 43 of IT Act. The relevant finding of the CIT(A) is reproduced as....