No tax can be levied on the principles of estoppel: ITAT


No tax can be levied on the principles of estoppel: ITAT


Cornet Hotel Services & Suppliers Pvt. Ltd. Versus DCIT Case No.: I.T.A. No. 4613/Del/2019


  1. The appellant/assessee declared its income by filing its original return of income, in which the revenue receipts generated from operations of “Hotel/Resort” were shown as “rental income”. Subsequently, the assessee, by revising its return of income, declared its income and offered the ‘revenue receipts’ from the operation of the “Hotel” under the heading “Business Income”.
  1. The AO, however, assessed the management license fees as income under the heading “House Property,” as declared by the Assessee in the original return of income.
  1. The assessee contended that there is no fixed amount for giving the building or resort to M/s Four Seasons, and the management license fees fluctuate according to the revenue generated from the business. Therefore, under any circumstances, the receipt of revenue from M/s Seasons cannot be construed as “Rental income from House Property”.
  1. The AO was of the view that the assessee itself has deducted the TDS under the head ‘rental income’. The Assessee has earned rental income from House property, and therefore, no interference is warranted in the decision of the authorities below to treat the revenue receipts as rental income from house property.

ITAT Delhi held as below:

  1. No tax can be levied on the principle of estoppel. Just because the Assessee has shown the receipt or income in the wrong head does not make him liable for tax.
  1. The management licence fees are taxable under the heading “Income from Business” and not “Income from House Property” when granting licences to manage and operate hotel premises.


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