ACIT, New Delhi V. M/s. Hotel Marina, New Delhi

ITA 1103/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4251 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 28-04-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 01-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MONA MOHANTY
• Keywords: Business income; Rectification of order; Rule of consistency; Revised return
• Section: 143(3); 139(5); 154; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI DELHI DELHI DELHI, BENCH , BENCH , BENCH , BENCH C CC C , NEW DELHI , NEW DELHI , NEW DELHI , NEW DELHI BEFORE SHRI C. L. SETHI, JUDICIAL MEMBER AND SHRI K. D. RANJAN, ACCOUNTANT MEMBER ITA NO. 1103 /DEL/2011 (ASSESSMENT YEAR 2007-08) ACIT, CIRCLE 31(1), VS. M/S. HOTEL MARINA, NEW DELHI G-59, CONNAUGHT CIRCUS, NEW DELHI. (APPELLANT) (RESPONDENT) PAN AACH5086K APPELLANT BY: SMT. MONA MOHANTY, SR. DR RESPONDENT BY: SHRI ANIL KUMAR, C.A. ORDER ORDER ORDER ORDER PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: 1. THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YE AR 2007-08 ARISES OUT OF THE ORDER OF CIT(A) XXVI, NEW DELHI. THE GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS UNDER: A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN ACCEPTING THE REVISED COMPUTATION O F INCOME FILED ON 03.11.2009 WHICH WAS BARRED BY LIMITATION AS PER THE PROVISION OF SEC. 139(5). B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY/ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. 2. THE ONLY ISSUE FOR CONSIDERATION RELATES TO ACCE PTANCE OF REVISED COMPUTATION OF INCOME AFTER EXPIRY OF PERIO D PROVIDED U/S 139(5) OF THE ACT. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT THE RETURN OF INCOME WAS FILED U/S 139(1) ON 29.10.2007 DECLARING THE INCOME OF ` 10,79,35,458/-. THE RETURNED INCOME WA S ACCEPTED BY THE A.O. U/S 143(3) VIDE ORDER DATED 14.12.2009. I N THE RETURN OF I.T.A. NO. 1103/DEL/2011 2 INCOME FILED BY THE ASSESSEE, THE ASSESSEE HAD SHOW N INCOME FROM HOUSE PROPERTY AT LUDHIANA AS PART OF BUSINESS RECE IPT WHEREAS, RENTAL INCOME OF ` 80,42,743/- WAS REQUIRED TO BE S HOWN UNDER THE HEAD INCOME FROM HOUSE PROPERTY SUBJECT TO ADMISS IBLE DEDUCTIONS U/S 24 OF THE I. T. ACT. DURING THE COURSE OF ASS ESSMENT PROCEEDINGS THE ASSESSEE FIELD A LETTER DATED 3.11. 2009 STATING THEREIN THAT THE INCOME FORM HOUSE PROPERTY AT LUDH IANA WAS IN FACT RENTAL INCOME ASSESSABLE UNDER THE HEAD INCOME FRO M HOUSE PROPERTY AS WAS ASSESSED IN THE EARLIER YEARS. TH E ASSESSEE INADVERTENTLY IN THE RETURN OF INCOME FILED ON 29.1 0.2007, HAD SHOWN THE INCOME AS INCOME FROM BUSINESS. THEREFOR E THE A.O. WAS REQUESTED TO ACCEPT THE REVISED INCOME OF ` 10,37,1 4,529/- WHEREIN RENTAL INCOME FROM HOUSE PROPERTY AT LUDHIANA WAS S HOWN AS HOUSE PROPERTY INCOME. THIS REQUEST OF THE ASSESSEE FOR CONSIDERATION OF THE INCOME UNDER THE HEAD INCOME FROM HOUSE PROPER TY WAS OVERLOOKED BY THE A.O. AS THE RETURN OF INCOME WAS ACCEPTED U/S 143(3). WHILE COMPLETING THE ASSESSMENT U/S 143(3) , THE A.O. DID NOT CONSIDER THE ASSESSEES LETTER DATED 03.11.2009 . THE ASSESSEE AGGRIEVED BY THE ORDER OF ASSESSMENT, FILED APPEAL BEFORE CIT(A). 3. ON APPEAL, CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE. SHE OBSERVED THAT BEFORE COMPLETION OF ASSESSMENT P ROCEEDINGS, THE ASSESSEE HAD BROUGHT FACTUAL ISSUE TO THE NOTIC E OF THE A.O. WHICH WAS EASILY VERIFIABLE FORM THE RECORDS AND WA S REQUIRED TO HAVE BEEN CONSIDERED BY THE A.O. AND THE REQUEST WA S EITHER TO BE ACCEPTED OR REJECTED THROUGH SPEAKING ORDER. THE A .O. WAS SILENT ON THE ISSUE. THE ASSESSEE HAD ALSO MOVED APPLICATION U/S 154 DATED 23.12.2009 SEEKING FOR THE RECTIFICATION OF MISTAKE WHICH WAS NOT DISPOSED OFF. CIT(A) FURTHER NOTED THAT PROPERTY AT LUDHIANA HAD BEEN ASSESSED TO TAX AS INCOME FROM HOUSE PROPERTY IN THE EARLIER YEAR AND IN SUBSEQUENT YEAR. THEREFORE, THE A.O. W AS DIRECTED TO I.T.A. NO. 1103/DEL/2011 3 ASSESS THE RENTAL RECEIPT FROM THE PROPERTY AS INCO ME FROM HOUSE PROPERTY AND ALLOW ADMISSIBLE STATUTORY DEDUCTION A GAINST THE SAME. SHE ACCORDINGLY, DIRECTED THE A.O. TO GIVE EFFECT T O THE DIRECTION CONTAINED IN HER ORDER. CIT(A) FURTHER NOTED THAT IN CASE THE FACTUAL OBSERVATION N MADE IN THIS PARA ARE FOUND TO BE CON TRARY TO THE RECORDS, THE A.O. SHOULD MOVE AN APPLICATION U/S 15 4 IMMEDIATELY. 4. BEFORE US, LD. SR. D.R. SUBMITTED THAT THE A.O. HAD COMPLETED THE ASSESSMENT AS PER THE RETURN FILED BY THE ASSES SEE HOWEVER CIT(A) HAD ACCEPTED THE REVISED COMPUTATION OF INCO ME AND DIRECTED THE A.O. TO TREAT THE INCOME FROM HOUSE PR OPERTY AT LUDHIANA UNDER THE HEAD INCOME FROM HOUSE PROPERTY AS AGAINST SHOWN AS BUSINESS INCOME IN THE RETURN OF INCOME. ON THE OTHER HAND, LD. A.R. SUBMITTED THAT IN THE EARLIER YEAR A S WELL AS SUBSEQUENT YEAR, THE INCOME FROM PROPERTY HAS BEEN ASSESSED UNDER THE HEAD INCOME FORM HOUSE PROPERTY AND THE REFORE, LD. CIT(A) IS JUSTIFIED IN DIRECTING THE A.O. TO ACCEP T THE CLAIM OF THE ASSESSEE. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE ASSESSMENT OR DER, THE A.O. IS TOTALLY SILENT ABOUT THE LETTER FILED BY THE ASSESS EE BEFORE HIM. THE LD. CIT(A) HAS ACCEPTED THE CONTENTION OF THE ASSES SEE ON THE GROUND THAT IN EARLIER YEAR AS WELL AS SUBSEQUENT Y EAR, THE INCOME FORM HOUSE PROPERTY AT LUDHIANA HAD BEEN ASSESSED U NDER THE HEAD INCOME FORM HOUSE PROPERTY AND NOT AS BUSINESS IN COME. HON'BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. VS CIT 284 ITR 323 HELD THAT THE A.O. HAD NO POWER TO ENTERTAIN THE CL AIM MADE OTHERWISE THAN BY WAY OF REVISED RETURN. HOWEVER, THIS DOES NOT IMPINGE THE POWER OF THE APPELLATE TRIBUNAL U/S 254 OF THE INCOME TAX ACT, 1961. APPLYING THE DECISION OF HON'BLE SU PREME COURT, WE I.T.A. NO. 1103/DEL/2011 4 SET ASIDE THIS MATER TO THE FILE OF THE A.O. WITH T HE DIRECTION TO EXAMINE THE CASE OF THE ASSESSEE AND DECIDE THE ISS UE ON MERITS KEEPING IN VIEW THE PRINCIPLE OF CONSISTENCY. NEED LESS TO SAY, THE A.O. SHALL PROVIDE NECESSARY OPPORTUNITY OF BEING H EARD TO THE ASSESSEE BEFORE DECIDING THE ISSUE. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS AL LOWED FOR STATISTICAL PURPOSES. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH APRIL 2011. SD./- SD./- (C. L. SETHI) (K. D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:28 TH APR., 2011 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI