Mukesh Mittal , Delhi V. ITO Ward-55(1), Delhi

ITA 1363/DEL/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 3466 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Appeal Filed On: 05-06-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Rectification of order; Earning of tax free income
• Section: 154; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘SMC’ NEW DELHI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA No.1363/Del/2022 Assessment Year: 2018-19 Sh. Mukesh Mittal, 63, Ram Vihar, New Delhi Vs. Income Tax Officer, Ward-55(1), Delhi PAN :AAAPM2576M (Appellant) (Respondent) ORDER This is an appeal by the assessee against order dated 14.05.2022 passed by National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2018-19. 2. Grounds raised by the assessee are as under: 1. The AO has made serious error in treating exempt income of interest on PPF of Rs.61,340/- as his business income. 2. The AO has made serious error in treating exempt income of Dividend income of Rs.63,105/- as his business income. 3. The AO has made serious error in taxing twice the business income from proprietorship concern M/s. M.M. Enterprises of Rs.4,27,875/- which has already been declared by the assessee as business income. Appellant by Sh. Anuj Maheshwari, CA Respondent by Sh. Om Parkash, Sr. DR Date of hearing 04.08.2022 Date of pronouncement 25.08.2022 ITA No. 1363/Del/2022 AY: 2018-19 2 | P a g e 3. Briefly the facts are, the assessee is a resident individual. For the assessment year under dispute, the assessee filed his return of income on 22 nd September, 2018 declaring income of Rs.8,87,707/-. While processing the return of income under section 143(1) of the Income-tax Act, 1961 (for short “the Act”), the Centralized Processing Centre (CPC), Bangalore, made certain adjustments to the income declared by adding back the following items of income: 1. PPF Interest of Rs.61,340/- 2. Two dividend receipts of Rs.63,105/- 3. Profit from M/s. MM Enterprises of Rs.4,27,875/- 4. Against the intimation issued under section 143(1)(a) of the Act, the assessee filed an application under section 154 of the Act for rectification of mistakes. However, the application filed by the assessee was rejected. Against the order passed under section 154 of the Act, though, the assessee preferred an appeal before learned Commissioner (Appeals), however, the order was upheld. 5. Before me, learned counsel appearing for the assessee, submitted that the profit from M/s. MM Enterprises has already been offered to tax separately in the computation of income. In this context, he drew my attention to the profit and loss account and the computation of income. Thus, he submitted, the further ITA No. 1363/Del/2022 AY: 2018-19 3 | P a g e addition of Rs.4,27,875/- amounts to double addition of the same income. Further, he submitted, the interest on PPF and the dividend income were duly disclosed by the assessee in the return of income as exempt income. Hence, they should not have been added back to the income of the assessee. 6. Learned Departmental Representative relied upon the observations of learned Commissioner (Appeals). 7. I have considered rival submissions and perused the materials on record. On going through the materials placed before me, more particularly, the profit and loss account and the computation of income, I am convinced that the profits from M/s. M.M. Enterprises has been offered to tax by the assessee separately, hence, was reduced from the profit shown in profit and loss account of the assessee. It appears, learned Commissioner (Appeals), without properly appreciating the factual position, has confirmed the addition of Rs.4,27,875/-. Since, the amount in dispute has already been offered to tax by the assessee, it cannot be added again to the income. Accordingly, I direct the Assessing Officer to delete the addition of Rs.4,27,875/-. 8. As regards dividend received and interest on PPF, undisputedly, they are credited to the profit and loss account of the ITA No. 1363/Del/2022 AY: 2018-19 4 | P a g e assessee. However, in the computation of income, the assessee has reduced them from the profits, since, these two items of income are exempt. Without appreciating the correct factual position, learned Commissioner (Appeals) has confirmed the additions. Considering the fact that both interest on PPF and dividend received are exempt from taxation, I direct the Assessing Officer to delete the additions. Grounds are allowed. 9. In the result, appeal is allowed. Order pronounced in the open court on 25 th August, 2022 Sd/- (SAKTIJIT DEY) JUDICIAL MEMBER Dated: 25 th August, 2022. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi