DCIT, C.C. -II, Kolkata, Kolkata V. Jagannath Paul, Kolkata

ITA 1302/KOL/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 5623 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2010
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 23-06-2010
• Court: TRIBUNAL
• Department Lawyers: PIYUSH KOLHE
• Keywords: TDS

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA () BEFORE . . . . . . . . , , , , !, '# '# '# '# /AND . .. . . .. . , $ ! ) [BEFORE HONBLE SRI D. K. TYAGI, JM & HONBLE SRI C . D. RAO, AM] #% #% #% #% / I.T.A NO. 1302 /KOL/2010 &'( )* &'( )* &'( )* &'( )*/ // / ASSESSMENT YEAR : 2003-04 DEPUTY COMMISSIONER OF INCOME-TAX, -VS- JAGANNATH PAUL CENTRAL CIRCLE-II, KOLKATA. (PA NO.AFUPP 1179 G ) (,- / APPELLANT ) (.,-/ RESPONDENT ) FOR THE APPELLANT : SRI PIYUSH KOLHE FOR THE RESPONDENT SRI RAJEEVA KUMAR / / ORDER PER BENCH : THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAIN ST THE ORDER OF THE LD. CIT(A), KOLKATA DATED 8 TH APRIL, 2010 FOR ASSESSMENT YEAR 2003-04 ON THE SOL E GROUND OF AGITATING AGAINST THE RELIEF GRANTED TO THE ASSE SSEE ON HOUSE PROPERTY INCOME AMOUNTING TO RS.3,08,000/-. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSING OFFICER WHILE MAKING ADDITION OF RS.3,08,000/- UNDER THE HEAD INCOME FRO M HOUSE PROPERTY OBSERVED THE REPLY OF THE ASSESEE IN THIS RESPECT IS NOT SATISFA CTORY. THE TDS CERTIFICATES CLEARLY SHOWS THAT THE ASSESSEE RECEIVED RENT OF RS.3,08,00 0/- FROM M/S. GRASIM INDUSTRIES LTD. AND THE SAME HAS NOT BEEN SHOWN BY THE ASSESSEE IN HIS COMPUTATION OF TAXABLE INCOME. SO, THE EXPLANATION OF THE ASSESSEE IS NOT TENABLE AND RS.3,08,000/- IS ADDED TO THE INCOME OF THE ASSESSEE AS INCOME FROM HOUSE PROPERT Y. IN APPEAL, THE LD. CIT(A) DELETED THE SAID ADDITION. AGGRIEVED BY THE SAID O RDER, NOW THE REVENUE IS IN APPEAL BEFORE US. 3. AT THE TIME OF HEARING BEFORE US, THE LD. DR REL IED ON THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT THE LD. CIT(A) HAD WRONG LY DELETED THE ADDITION ACCEPTING THE ASSESEES SUBMISSION THAT THE INCOME FROM HOUSE PROPERTY AS PER TDS CERTIFICATE WAS ACTUALLY CREDITED AS SERVICE CHARGES WHERE THER E WAS NO SUCH EVIDENCE ON RECORD OF THE ASSESSING OFFICER. HE ALSO CONTENDED THAT THE ACTION OF THE LD. CIT(A) WAS ALSO 2 UNJUSTIFIED BECAUSE THE INCOME OF RS.3,08,000/- HAS BEEN CREDITED AS SERVICE CHARGES BY THE ASSESSEE WHERE THE PAYEE, M/S. GRASIM INDUSTRIE S LTD. SHOWS THE SAME AS PAYMENT OF RENT IN THE TDS CERTIFICATE. THEREFORE, THE ASSE SSING OFFICER WAS RIGHT IN TREATING THE SAID AMOUNT AS RENT RECEIVED FROM M/S. GRASIM AND R IGHTLY ADDED THE SAID SUM UNDER THE HEAD INCOME FROM HOUSE PROPERTY. HE LASTLY CONCLUDE D THAT THE ORDER OF THE LD. CIT(A) MAY BE REVERSED AND THAT OF ASSESSING OFFICER BE RE STORED. 4. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, WHILE REITERATING HIS SAME SUBMISSIONS AS SUBMITTED BEFORE THE LOWER AUTHORITI ES RELIED ON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT THE ORDER PASSED BY THE L D. CIT(A) MAY BE UPHELD. 5. AFTER HEARING THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE ASSESSING OFFICER HAS M ADE THE ADDITION BY TREATING THE HOUSE PROPERTY GIVEN ON RENT AS ASSESSABLE UNDER TH E HEAD INCOME FROM HOUSE PROPERTY AS THE PAYEE M/S. GRASIM INDUSTRIES LTD. IN THE TD S CERTIFICATE HAS SHOWN IT AS PAYMENT OF RENT, AND THE SAME HAS NOT BEEN SHOWN BY THE ASS ESSEE IN HIS COMPUTATION OF TAXABLE INCOME. ON THE OTHER HAND, THE LD. CIT(A) WHILE GIV ING RELIEF TO THE ASSESSEE HAS HELD AS UNDER : 2. I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF T HE ASSESSEE AND THE FACTS ON RECORD. DURING THE COURSE OF ASSESSMENT, THE ASSESS E HAD SUBMITTED MORE OR LESS THE SAME ARGUMENT BEFORE THE A.O. HOWEVER, THE A.O WHILE MAKING ADDITION OF RS.3,08,000/- UNDER THE HEAD INCOME FROM HOUSE PROP ERTY OBSERVED THE REPLY OF THE ASSESSEE IN THIS RESPECT IS NOT SATISFACTORY. T HE TDS CERTIFICATES CLEARLY SHOWS THAT THE ASSESSEE RECEIVED RENT OF RS.3,08,000/- FR OM M/S. GRASIM INDUSTRIES LTD. AND SAME HAS NOT BEEN SHOWN BY THE ASSESSEE IN HIS COMPUTATION OF TAXABLE INCOME. SO THE EXPLANATION OF THE ASSESSEE IS NOT T ENABLE AND RS.3,08,000/- IS ADDED TO THE INCOME OF THE ASSESSEE AS INCOME FROM HOUSE PROPERTY. 2.1 I FIND A LOT OF MERIT IN THE CONTENTION OF THE APPELLANT. THE APPELLANT HAD HIRED A GODOWN BELONGING TO THE EASTERN RAILWAY AT COSSIPORE RAILWAY SIDING BY PAYING HIRE CHARGES TO THE RAILWAYS. THE ASSESSE E HAS RECEIVED SERVICE CHARGES TO THE TUNE OF RS.3,36,000/- FROM M/S. GRA SIM INDUSTRIES LTD. HAVING UTILIZED IT FOR STORING CEMENT. THE SAME HAS BEEN DULY DECLARED BY THE ASSESSEE AS SERVICE CHARGES IN ITS COMPUTATION AS INCOME FRO M BUSINESS. HOWEVER, M/S. GRASIM INDUSTRIES LTD. IN THE TDS CERTIFICATES HAS SHOWN IT AS PAYMENT OF RENT. WITHOUT GIVING ANY COGENT REASON THE ASSESSING OFFI CER HAS MADE AN ADDITION OF RS.3,08,000/- UNDER THE HEAD INCOME FROM HOUSE PROP ERTY CONSIDERING RENT AT THE RATE OF RS.28,000/- PER MONTH FOR 11 MONTHS. THE R EASON FOR DIFFERENCE IS THAT ASSESSEE FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING HAS TAKEN THE RENT FOR THE MONTH OF MARCH, 2003 AS SERVICE CHARGES WHEREAS THE TDS CERTIFICATE FOR MARCH, 03 HAS BEEN RECEIVED AND CLAIMED IN THE NEXT YEAR. 3 2.2 SURPRISINGLY, THE A.O. HAS NOT CONSIDERED THE P RIMARY CONDITION OF TREATING A RECEIPT AS INCOME FROM HOUSE PROPERTY I.E. OWNERSHI P. IN THIS CASE, IT IS CLEAR FROM THE FACTS STATED ABOVE, THAT THE ASSESSEE IS NOT THE OWNER OF THE SAID PROPERTY. THE OWNERSHIP OF THE RAILWAY SIDING VEST WITH THE RAILWAY AND HAS NOT BEEN TRANSFERRED TO THE ASSESSEE. THE RAILWAY IS CH ARGING FOR THE USE OF THE SIDING FROM YEAR TO YEAR. SECONDLY, WITHOUT PREJUDICE TO T HE ABOVE THE A.O. WHILE TREATING HIS INCOME AS INCOME FROM HOUSE PROPERTY H AS NOT ALLOWED THE REQUISITE STATUTORY DEDUCTIONS. AGAIN, THE A.O. S ACTION HAS RESULTED IN DOUBLE ADDITION OF THE SAME RECEIPT AS THE RECEIPT FROM SERVICE CHARGE S AS SHOWN BY THE ASSESSEE HAS NOT BEEN DEDUCTED FROM THE COMPUTATION UNDER TH E HEAD BUSINESS. THUS, THE A.O. WITHOUT APPRECIATING ALL THE FACTS MATERIAL FO R COMPUTATION OF INCOME HAS MERELY RECORDED HIS DISSATISFACTION WITH THE CONTEN TION OF THE ASSESSEE AND MADE THE SAID ADDITION. THEREFORE, I HOLD THAT IN THE AB SENCE OF OWNERSHIP THE RENT RECEIVED FROM M/S. GRASIM INDUSTRIES LTD. FOR UTILI ZATION OF RAILWAY SIDING DOES NOT COME WITHIN THE PURVIEW OF INCOME FROM HOUSE P ROPERTY. THE ASSESSEE HAS RIGHTLY INCLUDED THIS INCOME UNDER THE HEAD BUSINES S AS SERVICE CHARGES. THE ADDITION OF RS.3,08,000/- AS INCOME FROM HOUSE PROP ERTY IS HEREBY DELETED. AT THE TIME OF HEARING BEFORE US, THE LD. DR WAS UN ABLE TO CONTROVERT THE AFORESAID FINDING OF THE LD. CIT(A) BY BRINGING OUT ANY PLAUS IBLE EVIDENCE/MATERIAL. HENCE, WE DO NOT FIND ANY INFIRMITY IN HIS ORDER AND THE SAME IS HEREBY UPHELD. THE APPEAL OF THE REVENUE IS, THEREFORE, DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 7. ORDER IS PRONOUNCED IN THE OPEN COURT ON 17.9.20 10 SD/- SD/- . . , $ ! . . , ! (C. D. RAO) (D. K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER ( $ $ $ $) )) ) DATED :17TH SEPTEMBER, 2010 01 &'23 &4 JD.(SR.P.S.) / 5 .&& 6)7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT DCIT, CC-II, KOLKATA. 2 .,- / RESPONDENT , SRI JAGANNATH PAUL, 4, GALIF STREET, KOLKATA-3. 3 . &/' / THE CIT, 4 . &/' ( )/ THE CIT(A), KOLKATA 5 . >& .&' / DR, KOLKATA BENCHES, KOLKATA .&/ TRUE COPY , /'?/ BY ORDER , @ #3 / DEPUTY REGISTRAR .