CHIRAG (INDIA ) INFRADEVLOPERS & CONSTRUCTION P. LTD, MUMBAI V. DCIT 2(2), MUMBAI

ITA 1288/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79108 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 05-06-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 11-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIKAS AGARWAL
• Keywords: Business income

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C B ENCH, MUMBAI . . , , !'# , $ % BEFORE SHRI I.P. BANSAL, JM AND SHRI N.K. BILLAI YA, AM ./ I.T.A. NO.1288/MUM/2011 ( & & & & / ASSESSMENT YEAR :2007-08 M/S. CHIRAG (INDIA) INFRADEVELOPERS & CONSTRUCTION PVT. LTD., 29,B PANCHRATNA, ABOVE SUDAMA HOTEL, S.V. ROAD, GOREGAON (W), MUMBAI-400 062 / VS. THE DCIT , CIRCLE 2(2), AAYAKAR BHAVAN, MUMBAI-400 020 ' $ ./ () ./ PAN/GIR NO. : AACCP 7516P ( '* / APPELLANT ) .. ( +,'* / RESPONDENT ) '* - / APPELLANT BY: NONE +,'* . - / RESPONDENT BY: SHRI VIKAS AGARWAL . /0$ / DATE OF HEARING :05.06.2014 12& . /0$ / DATE OF PRONOUNCEMENT :05.06.2014 3 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-5, MUMBAI DT.26.11.2010 PERTAINING TO A.Y. 2007-08. 2. THE NOTICE WAS SERVED TO THE ASSESSEE THROUGH R PAD BUT NONE APPEARED ON BEHALF OF THE ASSESSEE. THEREFORE, W E HAVE DECIDED TO PROCEED EX-PARTE AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE. ITA NO. 1288/M/2011 2 3. THE GRIEVANCE OF THE ASSESSEE READ AS UNDER: 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) ERRED IN NOT DELETING THE ADDITI ON OF RS. 2,75,400/- ON ACCOUNT OF RENT, WHICH IS ON ESTIMATE D BASIS AND IS NOT IN CONFIRMATORY WITH THE TAX DEDUCTION C ERTIFICATE SUBMITTED BY THE ASSESSEE. 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) ERRED IN DISALLOWING THE EXPENSE S OF RS. 6,05,833/- ON THE RATIO BASED WORKING ON FROM OWN ASSUMPTION. 4. THE ASSESSEE IS A COMPANY DERIVING INCOME FROM H OUSE PROPERTY. THE RETURN WAS FILED ON 31.10.2007 DECLARING TOTAL INCOME AT RS. 18,93,260/-. THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT AND STATUTORY NOTICES WERE ISSUED AND SERVED UPON THE A SSESSEE. A PERUSAL OF THE TOTAL INCOME RETURNED, THE AO NOTICED THAT THE ASSESSEE HAS SHOWN RS. 27,54,000/- BEING RENT RECEIVED FROM CORPORATION BA NK UNDER THE HEAD BUSINESS INCOME. DRAWING SUPPORT FROM THE DECISI ON OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS SHAMBHU INVESTM ENTS PVT. LTD. 263 ITR 143, THE AO TREATED THE RENT RECEIVED FROM CORP ORATION BANK UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE RENT S HOWN WAS INCREASED BY 10%. THE AO DENIED THE DEDUCTION OF PAYMENT OF MUNICIPAL TAX STATING THAT NO EVIDENCE HAS BEEN BROUGHT ON RECORD FOR THE CLAIM. 5. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATT ER BEFORE THE LD. CIT(A). BEFORE THE LD. CIT(A), THE ASSESSEE PRODUC ED THE MUNICIPAL CORPN. RECEIPT, THE SAME WAS ADMITTED BY THE LD. CI T(A). HOWEVER, ON MERITS OF THE CASE, THE LD. CIT(A) WAS CONVINCED TH AT FACTS OF THE CASE ARE SQUARELY COVERED BY THE DECISION OF THE HONBLE SUP REME COURT IN THE CASE OF SHAMBHU INVESTMENTS PVT. LTD (SUPRA). THE LD. CIT(A) ITA NO. 1288/M/2011 3 CONFIRMED THE FINDINGS OF THE AO FOR TREATING THE R ENT UNDER THE HEAD INCOME FROM HOUSE PROPERTY. HOWEVER, HE DIRECTED THE AO TO VERIFY THE CLAIM AS PER MUNICIPAL CORPORATION RECEIPT AND AFTE R VERIFICATION ALLOW THE SAME. 5.1. SO FAR AS DISALLOWANCE OF OTHER EXPENDITURE IS CONCERNED, THE LD. CIT(A) OBSERVED THAT THE ASSESSEE HAS NO OTHER INCO ME OTHER THAN RENT INCOME THEREFORE THERE IS NO QUESTION OF ALLOWANCE OF EXPENDITURE. 6. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. 7. IN SO FAR AS THE ADDITION OF RS. 2,75,400/- IS C ONCERNED, WE FIND THAT THE AO HAS INCREASED THE RENT RECEIVED FROM CORPORA TION BANK BY 10% WITHOUT ANY BASIS. AS THERE IS NO BASIS FOR INCREA SING THE RENT, WE DO NOT FIND ANY REASON FOR MAKING THE ADDITION OF RS. 2,75 ,400/-, WE DIRECT THE AO TO DELETE THE SAME. GROUND NO. 1 IS ALLOWED. 8. IN SO FAR AS GROUND NO. 2 IS CONCERNED, WE AGREE WITH THE LD. CIT(A) THAT THE ASSESSEE HAS NO OTHER INCOME OTHER THAN THE RENTAL INCOME. WE, THEREFORE, DO NOT FIND ANY REASON FOR CLAIMING THESE EXPENDITURES. WE, ACCORDINGLY CONFIRM THE LD. CIT( A) AND DISMISS GROUND NO. 2. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.06.2014 . SD/- SD/- (I.P. BANSAL ) (N.K. BILLAIYA) /JUDICIAL MEMBER $ / ACCOUNTANT MEMBER MUMBAI; 4 DATED 05.06.2014 . . ./ RJ , SR. PS ITA NO. 1288/M/2011 4 3 3 3 3 . .. . +/ +/ +/ +/ 5 &/ 5 &/ 5 &/ 5 &/ / COPY OF THE ORDER FORWARDED TO : 1. '* / THE APPELLANT 2. +,'* / THE RESPONDENT. 3. 6 ( ) / THE CIT(A)- 4. 6 / CIT 5. 78 +/ , , / DR, ITAT, MUMBAI 6. 89 : / GUARD FILE. 3 3 3 3 / BY ORDER, , / +/ //TRUE COPY// ; ;; ; / < < < < ( ( ( ( (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI ITA NO. 1288/M/2011 5 DATE INITIALS 1. DRAFT DICTATED ON: 05.06.2014 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 05.06.2014 SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: SR. PS/PS 6. ORDER PRONOUNCED ON: SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: SR. PS/PS 9. DATE ON WHICH FILE GOES TO AR 10. DATE OF DISPATCH OF ORDER: