Commissioner of Income Tax vs Haryana Tourism Corporation Ltd.

M.M. Kumar, J.—The Revenue has approached this Court by filing the instant appeal u/s 260A of the Income Tax Act, 1961 (for brevity "the Act") challenging the order dated March 25, 2009, passed by the Income Tax Appellate Tribunal, Chandigarh Bench (for brevity "the Tribunal") in I. T. A. No. 1056/Chd/2008 in respect of the assessment year 2005-06. The Revenue has claimed that the following substantial questions of law would arise for determination of this Court:

Whether on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal is right in law in holding that the rental income earned by the assessee from the letting out of shops is assessable under the head ''Income from house property'' and not income from ''Profits and gains of business or profession ?

Whether the learned Income Tax Appellate Tribunal was right in following its own judgment in the assessee''s case for the assessment year 1997-98 ignoring the fresh facts brought on record by the Assessing Officer and by ignoring the ratio of the High Court judgments relied upon by the Assessing Officer and by the Commissioner of Income Tax (Appeals) ?

Whether on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal is right in law in deleting the addition of Rs. 10,70,351 on account of breakage of crockery and cutlery ignoring the fact that the amount in question was in fact a provision and the claim of the assessee was on estimated basis and not on the basis of actual expenditure incurred ?

Whether on the facts and circumstances of the case and in law, the assessee is entitled to double deduction on capital assets, i.e., depreciation at the specified rate as well a provision claimed at 2 per cent. of food cost ?

A perusal of the order passed by the Tribunal would show that the assessee-respondent is a public sector undertaking engaged in the business of running of tourist complexes, hotels/motels/resorts. It has declared rental income of Rs. 1,16,50,981 under the head "Income from house property" after claiming deduction u/s 24 of the Act. It had claimed that similar deductions were made in the earlier years. 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 into further details to record a contrary finding to the effect that the income derived by the assessee-respondent has been in the nature of business income. It is thus evident that an identical issue in respect of the assessment year 1997-98 was decided in favour of the assessee-respondent. On an appeal filed by the Revenue being I. T. A. No. 812/Chandi/2001 it was held by the Tribunal that such income has to be regarded as income from house property and accordingly the assessee was held entitled to the statutory deduction admissible u/s 24 of the Act. The aforesaid order of the Tribunal has attained finality. The Tribunal accordingly followed the principle of consistency by refusing to deviate from its earlier decision.

We are also of the view that the Tribunal has not committed any error of law by granting deduction u/s 24 as the deduction is based on the findings of fact that the income is derived from house property. Essentially it is a finding of fact and not a question of law which may warrant admission of the appeal. The principle of consistency laid down by the hon''ble Supreme Court in the case of Berger Paints India Ltd. Vs. Commissioner of Income Tax, Calcutta, , Commissioner of Income Tax Central, Kanpur Vs. J.K. Charitable Trust Kamal Tower, Kanpur, and C.K. Gangadharan and Another Vs. Commissioner of Income Tax, Cochin, would guide us that once the similar proposition has been accepted by the Revenue in respect of the assessment year 1997-98, then it is not open to it to challenge a similar finding and deviate from its earlier stand. Therefore, questions Nos. 1 and 2 have to be answered against the Revenue and in favour of the assessee-respondent.

In respect of questions Nos. 3 and 4, a similar situation would emerge from a perusal of paragraph 4 of the impugned order. The issue of deleting the amount on account of breakage of crockery has been considered. The contention of the assessee-respondent has prevailed because a similar issue was raised before the Delhi Bench of the Tribunal in I. T. A. No. 5651/Del./1997. The aforesaid view of the Delhi Bench was followed by the Chandigarh Bench also in I. T. A. Nos. 825 and 875/Chandi/1999 in the case of Haryana Hotels Ltd. decided on April 8, 2004. Even in the case of the assessee-respondent a similar view has been followed in I. T. A. No. 755/Chandi/2002. Accordingly, the aforesaid ground also would not stand scrutiny of the principle of consistency as laid down in various judgments referred to in the preceding paragraph. Therefore, questions Nos. 3 and 4 would also deserve to be answered against the Revenue-appellant and in favour of the assessee-respondent.

As a sequel to the above discussion, the appeal does not warrant admission and the same is accordingly dismissed.