SHILPA PHARMA P. LTD, MUMBAI V. ITO 8(3)(1), MUMBAI

ITA 1104/MUM/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5718 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 23-01-2014
• Assessment Year: 2000-2001
• Appeal Filed On: 07-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income; Depreciation
• Section: 143(3); 147

Judgement Text

H IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI .. , ; BEFORE SHRI P.M. JAGTAP, AM AND SHRI VIVEK VARMA, J M ./ I.T.A. NO.1104 /MUM/2011 ( / ASSESSMENT YEAR : 2000-2001 M/S SHILPA PHARMA PRIVATE LTD., 2 ND FLOOR, SHIVASHISH, SAKINAKA, MUMBAI 400 072. / VS. I.T.O. - 8(3)( 1 ), AAYAKAR BHAVAN, MUMBAI. . / PAN : AAACL0621M ( # / APPELLANT ) .. ( $%# / RESPONDENT ) APPELLANT BY NONE RESPONDENT B Y : MS. SONIA KUMAR ) * / DATE OF HEARING : 23-01-2014 ) * / DATE OF PRONOUNCEMENT : 31-1-2014 [ / O R D E R PER P.M. JAGTAP, A.M . : .. , THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DTD. 28-09-2010 PASSED BY THE LD. CIT(A) 18, MUMBAI AN D THE SOLITARY ISSUE ARISING OUT OF THE SAME RELATES TO THE DISALLOWANCE OF RS. 2,41,965/- MADE BY THE A.O. AND CONFIRMED BY THE LD.CIT(A) ON ACCOUNT OF DEDUCTION CLAIMED BY THE ASSESSEE FOR DEPRECIATION. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY WH ICH HAD GIVEN THE PREMISES OWNED BY IT IN THE FORM OF GALAS TO ITS SISTER CONCERN ON RENT. THE RENT RECEIVED FROM THE SISTER CONCERN WAS SHOWN BY THE ASSESSEE AS ITS BUSINESS INCOME AND DEDUCTION ON ACCOUNT OF DEPRECI ATION ON THE GALAS WAS ITA 1104/M/1 1 2 CLAIMED AGAINST THE BUSINESS INCOME. IN THE ASSESS MENT COMPLETED U/S 147 R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 VIDE AN O RDER DATED 24-12-2007, THE SAID RENTAL INCOME WAS BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE BY THE A.O. UNDER THE HEAD INCOME FROM HOUSE PROPERTY AN D CONSEQUENTLY DEPRECIATION CLAIMED BY THE ASSESSEE ON THE GALAS W AS DISALLOWED BY HIM. ON APPEAL, THE LD. CIT(A) CONFIRMED THE DISALLOWANCE M ADE BY THE A.O. ON ACCOUNT OF DEPRECIATION HOLDING THAT WHEN THE RENTA L INCOME RECEIVED FROM THE PREMISES WAS ASSESSED IN THE HANDS OF THE ASSESSEE UNDER THE HEAD INCOME FROM HOUSE PROPERTY, THE ASSESSEE WAS NOT ENTITLED TO CLAIM DEPRECIATION ON THE SAID PREMISES. AGGRIEVED BY THE ORDER OF THE LD . CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3. AT THE TIME OF HEARING BEFORE US, NONE HAS APPEA RED ON BEHALF OF THE ASSESSEE DESPITE THE FACT THAT NOTICE OF THE SAID H EARING FIXED ON 23-01-2014 WAS DULY GIVEN THROUGH NOTICE BOARD. THIS APPEAL OF THE ASSESSEE IS, THEREFORE, BEING DISPOSED OF EX PARTE ON MERIT AFTER HEARING T HE ARGUMENTS OF THE LD. D.R, WHO HAS STRONGLY RELIED ON THE ORDERS OF THE AUTHOR ITIES BELOW IN SUPPORT OF THE REVENUES CASE THAT THE RENTAL INCOME FROM THE PREMISES OWNED BY THE ASSESSEE HAVING BEEN ASSESSED TO TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY, THE CLAIM OF THE ASSESSEE FOR DEPRECIATI ON ON THE SAID PREMISES IS LIABLE TO BE DISALLOWED. IT IS ALSO OBSERVED THAT N EITHER BEFORE THE A.O. NOR BEFORE THE LD. CIT(A), ANY MATERIAL CONTENTION WAS RAISED ON BEHALF OF THE ASSESSEE TO SUPPORT AND SUBSTANTIATE THE TREATMENT GIVEN TO THE RENTAL INCOME AS BUSINESS INCOME. IN THE STATEMENT OF FACTS FILED BEFORE THE LD. CIT(A), THE STAND TAKEN BY THE ASSESSEE ON THIS ISSUE WAS ONLY THAT THE HOUSE PROPERTY HAVING BEEN EXPLOITED COMMERCIALLY, RENTAL INCOME S HOULD HAVE BEEN CHARGED UNDER THE HEAD INCOME FROM OTHER SOURCES. IN OUR OPINION, THE LAW ON THIS ISSUE IS WELL SETTLED THAT IF THE HOUSE PROPERTY OW NED BY THE ASSESSEE IS SIMPLY LET OUT TO EARN RENTAL INCOME, SUCH RENTAL I NCOME IS ASSESSABLE TO TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND CON SEQUENTLY THE ASSESSEE ITA 1104/M/1 1 3 IS NOT ENTITLED TO CLAIM DEPRECIATION ON SUCH HOUSE PROPERTY AS NO DEDUCTION FOR DEPRECIATION IS ALLOWABLE UNDER THE HEAD INCOM E FROM HOUSE PROPERTY. WE, THEREFORE, FIND NO INFIRMITY IN THE IMPUGNED OR DER OF THE LD. CIT(A) CONFIRMING THE DISALLOWANCE MADE BY THE A.O. ON ACC OUNT OF DEPRECIATION AND UPHOLDING THE SAME ON THIS ISSUE, WE DISMISS THIS A PPEAL FILED BY THE ASSESSEE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2014. . ) 0 1 31-1-2014 ) SD/- SD/- (VIVEK VARMA) (P.M. JAGTAP ) JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 1 DATED 31-1-2014 [ .../ RK , SR. PS ' #%& '& / COPY OF THE ORDER FORWARDED TO : 1. # / THE APPELLANT 2. $%# / THE RESPONDENT. 3. 4 () / THE CIT(A)18, MUMBAI. 4. 4 / CIT 8, MUMBAI 5. $8 , * 8 , / DR, ITAT, MUMBAI H BENCH 6. / GUARD FILE. / BY ORDER, % $ //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI