Revenue appealed against Tribunal order taxing compensation for occupancy of building units as business income. Court held receipts were maintenance charges and remitted to head of income from house property, affirming Tribunal.
All appeals are dismissed with no order as to costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICITON
INCOME TAX APPEAL NO.256 OF 2004
WITH
INCOME TAX APPEAL NO.257 OF 2004
WITH
INCOME TAX APPEAL NO.689 OF 2004
The Commissioenr of Income-tax-3 .. Appellant.
Versus
M/s.R.R. Investments & Estate Ltd. .. Respondent.
Mr.Ashok Kotangale for the appellant.
CORAM : F.I. REBELLO &
J.P. DEVADHAR, JJ.
DATED : 7TH AUGUST, 2007.
P.C. :
1. These three appeals filed by the Revenue
under Section 260A of the Income Tax Act, 1961
relating to Assessment Years 1989-90, 1990-91 and
1992-93.
2. The question raised by the Revenue in the
present case is, whether the compensation received
by the assessee from various occupations of the
office units in the building known as Chandramukhi
were taxable under the head ‘income from business’
or under the head ‘income from house property’ ?
3. The respondent-assessee owns a building
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known as Chandramukhi at Nariman Point, Bombay. In
the assessment years in question, the amounts
received by the assessee by way of compensation from
various occupations of the office units in the said
building were sought to be taxed as income from
house property.
4. On appeal filed by the assessee, the C.I.T.
(A) held that the compensation received from the
occupants were taxable under the head ‘income from
business’ and not under the head ‘income from house
properties’. On further appeal filed by the
Revenue, the Tribunal relying upon the judgments of
this Court in the case of C.I.T. V/s. Shree Nirmal
Commercial Limited reported in 213 ITR 361 upheld
the order passed by the C.I.T. (A). Challenging
the aforesaid order, these appeals are filed by the
Revenue.
5. The only argument of the Revenue is that the
decision of this Court in the case of Shree Nirmal
Commercial Limited (supra) is distinguishable on
facts because in that in that case Shree Nirmal
Commercial Limited had sold the units to the
respective occupants, whereas in the present case,
the assessee continues to be the owner of the
building.
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6. In our opinion, there is no merit in this
contention because the finding recorded by the
Tribunal in the present case is that the occupants
are in possession of the respective premises as
share-holders by subscribing to the shares and the
amount received by the assessee are towards
maintenance charges and municipal taxes payable in
respect of the properties. Same was the case in the
case of Shree Nirmal Commercial Limited (Supra).
7. In this view of the matter, in our opinion,
the issues raised in this appeal are squarely
covered by the decision of this Court in the case of
Shree Nirmal Commercial Limited (Supra).
8. Accordingly, all these appeals are dismissed
with no order as to costs.
(F.I. REBELLO, J.)
(J.P. DEVADHAR, J.)
3 issues framed by the court
Whether compensation received by the assessee for occupancy of office units in the building is taxable as income from business or income from house property.
Whether the appeal filed by the Revenue is distinguishable from the decision in C.I.T. V/s. Shree Nirmal Commercial Limited.
Whether the compensation receipts should be taxed under the head 'income from house property' since the assessee continued to be the owner.
Colour shows how this judgement treated each authority
C.I.T. V/s. Shree Nirmal Commercial LimitedDistinguished¶17
213 ITR 361
3 provisions across 1 enactments
The Commissioner of Income-tax-3
M/s.R.R. Investments & Estate Ltd.
F.I. REBELLO
J.P. DEVADHAR
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court