RST Holdings Pvt. Ltd., Kolkata V. DCIT, Circle - 4, Kolkata, Kolkata

ITA 1687/KOL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8771 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-03-2019
• Assessment Year: 2003-2004
• Appeal Filed On: 19-07-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RADHEY SHYAM
• Assessee Lawyers: A N KESHARI
• Keywords: Principle of natural justice; Deemed to accrue or arise in india
• Section: 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA SMC BENCH, KOLKATA [BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER] I.T.A. NO. 1687/KOL/2017 ASSESSMENT YEAR: 2003-04 RST HOLDINGS PVT. LTD..............APPELLANT 3-B, LAL BAZAR STREET 2 ND FLOOR KOLKATA 700 001 [PAN : AABCR 4072 M] DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-4, KOLKATA...................................RESPONDENT APPEARANCES BY: SHRI A.N. KESHARI, FCA, APPEARED ON BEHALF OF THE ASSESSEE. SHRI RADHEY SHYAM, CIT D/R, APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : MARCH 26 TH , 2019 DATE OF PRONOUNCING THE ORDER : APRIL 3 RD , 2019 O R D E R PER J. SUDHAKAR REDDY :- THIS APPEAL FILED BY THE ASSESSE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 2, KOLKATA, (HEREINAFTER THE LD. CIT (A)), PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DT. 11/04/2017, FOR THE ASSESSMENT YEAR 2003-04. 2. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, WE HOLD AS FOLLOWS:- 3. THE ASSESSEE IN THIS CASE CLAIMS TO HAVE ADVANCED MONEY FOR PROPERTY AT BENGALURU AND THAT THE TRANSACTION IS NOT COMPLETE AND THAT THE OWNERSHIP OF THE PROPERTY WAS NOT TRANSFERRED TO THE ASSESSEE AND HENCE UNDER THESE CIRCUMSTANCES, THE ASSESSING OFFICER AS WELL AS THE LD. CIT(A) WAS WRONG IN BRINGING TO TAX THE DEEMED INCOME FROM RENT U/S 23 OF THE ACT. THE LD. CIT D/R, ON THE OTHER HAND, POINTED OUT THAT THE ASSESSEE WAS HIGHLY NEGLIGENT AND HE HAS NOT LED EVIDENCE BEFORE THE ASSESSING OFFICER NOR BEFORE THE LD. CIT(A) IN SUPPORT OF ITS CLAIM THAT WHAT WAS GIVEN WAS ONLY AN ADVANCE FOR PROPERTY AND THAT THE PROPERTY 2 I.T.A. NO. 1687/KOL/2017 ASSESSMENT YEAR: 2003-04 RST HOLDINGS PVT. LTD WAS NOT TRANSFERRED IN THE NAME OF THE ASSESSEE. ON A QUERY FROM THE BENCH, THE LD. D/R, HAS NOT OBJECTION TO SETTING ASIDE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION AS THE ASSESSEE PLEADS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. HENCE I RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER, FOR FRESH ADJUDICATION, IN ACCORDANCE WITH LAW. HENCE GROUND NOS. 2, 3 & 4 OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 4. THE SECOND ISSUE IS THE DISALLOWANCE OF RENT FOR USE OF PREMISES AT 3B, 15, BELVEDERE ROAD. AFTER HEARING RIVAL CONTENTIONS, WE ARE OF THE CONSIDERED OPINION THAT THE GROUNDS ON WHICH THE DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER IS NOT SUSTAINABLE. THE ASSESSEE HAD GIVEN AN EXPLANATION THAT HE WAS KEEPING IMPORTANT DOCUMENTS, BOOKS OF ACCOUNTS AND OTHER RECORDS AT THAT PREMISES AND THAT IT RUNS ONLY ADMINISTRATIVE ACTIVITIES FROM ITS OFFICE AT 3B, LAL BAZAAR STREET, AGAINST PAYMENT OF ADMINISTRATIVE CHARGES OF RS.10,000/- PER MONTH. 4.1. IN VIEW OF THE ABOVE DISCUSSION, WE ALLOW GROUND NO. 5 OF THE ASSESSEE. 5. GROUND NO. 6, IS AGAINST THE DISALLOWANCE OF RS.27,125/- CLAIMED AS BAD DEBT. AS THIS AMOUNT WAS WRITTEN OFF AND CHARGED TO PROFIT AND LOSS ACCOUNT, WE ALLOW THIS GROUND OF THE ASSESSEE. 6. GROUND NO. 7, IS CONSEQUENTIAL IN NATURE. 7. GROUND NOS. 1 & 8 ARE GENERAL IN NATURE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. KOLKATA, THE 3 RD DAY OF APRIL, 2019. [ J. SUDHAKAR REDDY] ACCOUNTANT MEMBER DATED :03.04.2019 {SC SPS} 3 I.T.A. NO. 1687/KOL/2017 ASSESSMENT YEAR: 2003-04 RST HOLDINGS PVT. LTD COPY OF THE ORDER FORWARDED TO: 1. RST HOLDINGS PVT. LTD 3-B, LAL BAZAR STREET 2 ND FLOOR KOLKATA 700 001 2. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-4, KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES