DSL Infrastructure and Space Developers Private Limited, Hyderabad V. Income Tax Officer, Ward-17(1)., Hyderabad

ITA 1510/Hyd/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2570 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 29-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KOMALI KRISHNA
• Assessee Lawyers: B SATYANARAYANA MURTHY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B SMC BENCH: HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT ITA. NO.1510/HYD/2017 ASSESSMENT YEAR: 2013 - 2014 DSL INFRASTRUCTURE AND SPACE DEVELOP ERS PRIVATE LIMITED, HYDERABAD. PAN: AACCD 4918 P VS. ITO, WARD - 17(1), HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE: SHRI B. SATYANARAYANA MURTHY FOR REVENUE : SMT. KOMALI KRISHNA, DR DATE OF HEARING : 08.02.2018 DATE OF PRONOUNCEMENT : 0 8 .02.2018 ORDER PER D. MANMOHAN , VP. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY LD. CIT(A) - 5, HYDERABAD AND IT PERTAINS TO A.Y. 2013 - 2014. 2. THE ASSESSEE - COMPANY IS ENGAGED IN THE BUSINESS OF DEVELOPMENT AND CONSTRUCTION OF COMMERCIAL COMPLEX. IT TOOK UP THE PROJECT OF CONSTRUCTION OF A COMMERCIAL COM PLEX CONSISTING OF IT PARK, MULTIPLEX AND SHOPPING ARCADE. FOR THIS PURPOSE, THE COMPANY ACQUIRED LANDS AND SHEDS BELONGING TO SOME OTHER INDUSTRIAL UNITS. AT THE TIME OF SUCH PURCHASE, SOME OF THE SHEDS WERE TENANTED. AS THERE WAS DELAY IN EVICTING THE TENANTS, THE ASSESSEE - COMPANY TOOK THE RESPONSIBILITY OF EVICTING THE TENANTS . S UBJECT THERETO THE PROPERTIES WERE REGISTERED IN FAVOUR OF THE ASSESSEE - COMPANY. FURTHER THE COMPANY INCURRED EXPENDITU RE IN VACATING THESE TENANTS BUT IN THE MEANTIME RENT ALS WERE RECEIVED FROM THE TENANTS. THE EXPENDITURE INCURRED IN THIS REGARD WAS 2 SET - OFF AGAINST THE RECEIPTS AND CASE OF THE ASSESSEE - COMPANY WAS THAT THE RECEIPT CANNOT BE TAKEN IN ISOLATION A N D T A X E D . T HE A.O. DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND BROUGHT TO TAX THE RENTAL INCOME FROM M/S. RAM. DHARAM KANTA UNDER THE HEAD OTHER SOURCES. 3. LD. CIT(A) HAVING AFFIRMED THE ACTION OF THE ASSESSING OFFICER, SECOND APPEAL WAS PREFERRED BEFORE TH E TRIBUNAL CONTENDING , INTER ALIA , THAT THERE IS AN INEXTRICABLE CONNECTION BETWEEN THE RECEIPT OF INCOME AND THE EXPENDITURE AND HENCE THE INCOME EARNED SHOULD BE SET - OF F AGAINST THE COSTS INCURRED IN RAISING THE COMMERCIAL COMPLEX. 4. AT THE TIME OF HEARI NG, LD COUNSEL FOR THE ASSESSEE PLACED A COPY OF THE ORDER OF THE ITAT HYDERABAD B BENCH (SMC) IN THE ASSESSEES OWN CASE FOR THE A.YS 2008 - 09 TO 2011 - 12 (ITA NOS. 319 TO 322/HYD/2017) WHEREIN THE BENCH OBSERVED THAT THE RENT RECEIVED DESERVES TO BE SET - OFF TO THE COST OF A PROJECT AND DIRECTED ACCORDINGLY. IT WAS CATEGORICALLY STATED THAT THE SAID AMOUNT CANNOT BE BROUGHT TO TAX AS INCOME FROM HOUSE PROPERTY AND THE ASSESSEE HAS RIGHTLY TREATED THEM AS RECEIPTS. 5. I HAVE ALSO HEARD THE LEARNED DEPAR TMENTAL REPRESENTATIVE AND CAREFULLY PERUSED THE RECORD . I N THE LIGHT OF THE DETAILED ANALYSIS MADE IN THE ASSESSEES OWN CASE FOR THE EARLIER YEARS , T HE CLAIM OF THE ASSESSEE IS HEREBY ACCEPTED AND THE A.O. IS DIRECTED TO RECOMPUTE THE INCOME ACCORDINGLY. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE - COMPANY IS ALLOWED. PRONOUNCED ACCORDINGLY IN THE OPEN COURT ON 08 TH FEBRUARY, 2018. S D / - (D. MANMOHAN) VICE PRESIDENT HYDERABAD, DATED: 0 8 T H FEBRUARY, 2018. 3 OKK, SR.PS COPY TO 1. VENUGOPAL & CHENOY, CHARTERED ACCOUNTANTS, 4 - 1 - 889/16/2, TILAK ROAD, HYDERABAD - 500001. 2. INCOME TAX OFFICER, WARD - 17(1), HYDERABAD. 3. CIT (A) - 5, HYDERABAD. 4. PR. COMMISSIONER OF INCOME TAX - 5, HYDERABAD. 5. DR, ITAT, HYDERABAD. 6. GUARD FILE