Shri Suresh Jain, Bangalore V. ACIT,

ITA 1382/BANG/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9475 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-09-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 17-11-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Business expenditure
• Section: 234B

Judgement Text

PAGE 1 OF 6 ITA NO.1382/B ANG/2008 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE SHRI K K GUPTA, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE, K, JUDICIAL MEMBER ITA NO.1382/BANG/2008 (ASSESSMENT YEAR: 2003-04) SMT. SURESH JAIN, NO.26, REST HOUSE ROAD, BANGALORE. . APPELLANT VS. THE ASSISTANT COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE-1(4), BANGALORE. .... RESPONDENT APPELLANT : SHRI V CHANDRASHEKAR RESPONDENT : SMT. JACINTA ZIMIK VASHAI O R D E R PER GEORGE GEORGE K, JM : THIS APPEAL HAS BEEN DIRECTED AGAINST THE ORDER OF THE CIT (A)-VI, BANGALORE, FOR THE ASSESSMENT YEAR 2 003-04. 2. THE ASSESSEE, AN INDIVIDUAL, HAS RAISED SIX GRO UNDS OF APPEAL. HOWEVER, ON A PERUSAL, GROUND NOS: 1, 5 AND 6 ARE G ENERAL AND NOT SPECIFIC 2 WHICH, IN OUR CONSIDERED VIEW, DO NOT SURVIVE FOR A DJUDICATION. THE REMAINING THREE EFFECTIVE GROUNDS ARE REFORMULATED AS UNDER: (I) THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN DISALLO WING RS.3.04 LAKHS AS BUSINESS EXPENSES CLAIMED BY THE ASSESSEE; (II) THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN NOT ALL OWING RS.3000/- EXEMPTION, BEING MINORS INCOME, AS CLAIMED U/S 10( 32) OF THE ACT ; & (III) THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN IMPOSIN G INTEREST U/S 234B AND 234D OF THE ACT. 3. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE HAD DECLARED RENTAL INCOME, LOSS UNDER THE HEAD BUSINESS IN RESPECT OF SUB-LEASE TRANSACTIONS AND MINORS INCOME, AGGREGATING TO RS.4,15,203/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS REQUIRED T O FURNISH CERTAIN DETAILS OF VARIOUS ITEMS OF EXPENSES DEBITED AGAINS T THE RENTAL RECEIPTS AND ALSO INCOME EARNED IN RESPECT OF KOTHANUR LAND DEAL INGS. AS PER THE AOS VERSION, INSTEAD OF FURNISHING THE DETAILS AS CALLE D FOR, PERHAPS, THE ASSESSEE HAD CHOSEN TO EXPLAIN THAT THE EXPENSES WERE RELATI NG TO SUB-LEASE OF PROPERTY IN THE FORM OF DEPRECIATION, INTEREST ON VE HICLE, ELECTRICITY, TELEPHONE BILLS ETC. WITH REGARD TO KOTHANUR LAND DEALINGS, THE ASSESSEES CONTENTION WAS THAT IT WAS A REAL ESTATE AGENCY TRAN SACTION WHERE HE HAD RECEIVED RS.64 LAKHS FROM THE BUYER AND MAKING PAYMEN T TO THE SELLER OF RS.61.24 LAKHS, THE REMAINING RS.2.76 BEING HIS PRO FIT. THE VIEW OF THE AO WAS THAT AS THE ASSESSEE HAD RECEIVED RENT OF RS.2. 25 LAKHS AND PAID THE RENT TO THE OWNER OF THE SAME RS.2.25 LAKHS, THE QU ESTION OF MAKING ANY 3 INVESTMENTS AND CLAIMING DEPRECIATION, INTEREST AND OTHER CHARGES DOESNT ARISE AND, THUS, DISALLOWED THE EXPENSES CLAIMED ON THIS COUNT. WITH REGARD TO PROFIT SHOWN ON KOTHANUR LAND DEALINGS, IN THE A BSENCE OF ANY SPECIFIC DETAILS OF TRANSACTIONS ALLEGED TO HAVE BEEN BROKER ED, DOCUMENTARY EVIDENCE TO THE CONTRARY, THE AO RESORTED TO DENY ANY EXPENDIT URE AGAINST THIS INCOME. 4. AGITATED OVER THE TREATMENT OF THE AO WITH REGA RD TO THE ABOVE DISALLOWANCES, THE ASSESSEE TOOK UP THESE ISS UES BEFORE THE CIT(A). THE ASSESSEES CONTENTION WAS THAT THE ENTIRE PROPE RTY TAKEN ON LEASE WAS NOT SUB-LET AS PRESUMED BY THE AO AND IN FACT A PORT ION OF WHICH WAS BEING UTILIZED FOR HIS BUSINESS AND, THUS, HE WAS ENTITLE D TO DEDUCTION ON SUCH EXPENSES AS CLAIMED. AFTER DUE CONSIDERATION OF T HE ASSESSEES PLEA, THE LD.CIT(A) HAS OBSERVED THUS 3.THE ABOVE ARGUMENT WAS EXAMINED VIS--VIS L EASE DEEDS WHICH SHOW THAT THE SAME AND EXACT PROPERTY WHICH WAS REC ORDED ON LEASE DEED HAS BEEN SUB-LEASED (OUT) TO EARN RENT OF RS.2,25, 000/- AND, THEREFORE, THE CLAIM THAT BUSINESS OF THE APPELLANT WAS CARRIED ON FROM A PORTION OF IT IS FOUND TO BE NOT TRUE. HENCE, THE DISALLOWANCE IS U PHELD.. 5. AGGRIEVED, THE ASSESSE CAME UP WITH THE PRESENT APPEAL. THE LD. AR REITERATED MORE OR LESS WHAT HAS BEEN URGED BEFORE THE LOWER AUTHORITIES. 5.1. ON THE OTHER HAND, THE LD. D R PRESENT WAS OF THE FIRM VIEW THAT THE LOWER AUTHORITIES HAVE COME TO A CONCLUSIO N AFTER VERIFYING THE 4 FACTS IN DETAIL AND, THUS, THE STAND OF THE FIRST A PPELLATE AUTHORITY REQUIRES TO BE SUSTAINED. 5.1.1. WE HAVE DULY CONSIDERED THE RIVAL SUBMISSION S AND ALSO PERUSED THE IMPUGNED ORDER WHICH IS DISPUTE. AT THE OUTSET , WE WOULD LIKE TO STRESS THAT THE ASSESSEE HAD NOT BROUGHT ON RECORD ANY DOCU MENTARY EVIDENCE TO PROVE HIS POINT. EVEN AT THIS STAGE ALSO, HE HAD F AILED TO COME UP WITH ANY CREDIBLE EVIDENCE TO SUBSTANTIATE HIS CLAIM THAT A PORTION OF THE PROPERTY WHICH WAS TAKEN ON LEASE, ACTUALLY UTILIZED FOR HIS BUSINESS. THE LD.CIT (A) HAD CATEGORICALLY ASSERTED, AFTER VERIFYING THE LEASE DEEDS, THAT THE EXACT PROPERTY WHICH WAS RECORDED ON LEASE HAS BEEN SUB-LE ASED OUT TO EARN RENT OF RS.2,25,000/- THIS VERY FACT HAS NOT BEEN REBUTTED EVEN AT THIS PO INT OF TIME WITH ANY TANGIBLE PROOF. IN VIEW OF THE ABO VE, WE ARE IN TOTAL AGREEMENT WITH THE STAND OF THE LOWER AUTHORITIES. THE ASSESSEE FAILS ON THIS COUNT . 6. THE EFFECTIVE SECOND GROUND IS WITH REGARD TO NOT ALLOWING RS.3000/- EXEMPTION, BEING MINORS INCOME, AS CLAIM ED U/S 10(32) OF THE ACT, BY THE AUTHORITIES BELOW. 6.1. AT THE OUTSET, WE WOULD LIKE TO POINT OUT THA T THE LD. CIT(A) HAD OBSERVED IN THE IMPUGNED ORDER THAT GROUND NO.2(B) IS NOT DECIDED BEING NOT PRESSED WHICH GOES WITHOUT SAYING THAT THE ASSESSEE HAD, I N FACT, CONCEDED THE ACTION OF THE AO IN TOTO. ONCE THE ASS ESSEE HAD NOT PRESSED AN ISSUE WHICH HAS BEEN RAISED EARLIER BEFORE THE C IT (A), IN OUR CONSIDERED VIEW, THE ASSESSEE DOESNT HAVE ANY VALID GROUND TO BE AGGRIEVED NOW. THUS, 5 THIS GROUND IS DISMISSED AS NOT MAINTAINABLE WHICH HAS BEEN AGITATED WITHOUT ANY SUBSTANCE. 7. THE EFFECTIVE LAST AND THIRD GROUND IS IN RESPECT OF LEVYING OF INTEREST U/S 234B AND 234D OF THE ACT. 7.1. AS FAR AS LEVYING OF INTEREST U/S 234B OF THE ACT IS CONCERNED, IT IS MANDATORY AND CONSEQUENTIAL IN NATURE WHICH CA NNOT BE AGITATED UPON. THUS, THIS GROUND IS DISMISSED AS NOT MAINTAINABLE. 7.1.1. WITH REGARD TO LEVYING OF INTEREST U/S 234D OF THE ACT, IT IS PURELY A LEGAL GROUND AND IS CHARGEABLE. WE DRAW STR ENGTH FOR OUR CONCLUSION FROM THE FINDING OF THE HONBLE SPECIAL BENCH IN TH E CASE OF ITO V. EKTA PROMOTERS P. LTD.; REPORTED IN (2008) 113 ITD 719-I TAT DELHI E SPECIAL BENCH. 8. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 25TH SEPTE MBER, 2009. SD/- SD/- (K K GUPTA) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE: D A T E D : 25TH SEPTEMBER, 2009. 6 COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR, ITAT, BANGALORE. 6 GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRA R, ITAT, BANGALORE. MSP/23/9/