M/s Prestige Amuseuments Private Limited , Bangalore V. Assistant Commissioner of Income Tax Circle-5(1)(2), Bangalore

ITA 1689/BANG/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5167 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-10-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 21-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R PREMI
• Assessee Lawyers: B R SUDHEENDRA
• Keywords: Set aside

Judgement Text

ITA NO.1689/BANG/2018 PRESTIGE AMUSEMENTS PVT. LTD., BANGALORE IN THE INCOME TAX APPELLATE TRIBUNAL CBENCH: BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENTAND SHRI B.R. BASKARAN, ACCOUTANT MEMBER ITA NO.1689/BANG/2018 ASSESSMENT YEAR: 2014-15 PRESTIGE AMUSEMENTS PRIVATE LTD. THE FALCON HOUSE NO.1, MAIN GUARD CROSS ROAD BANGALORE-560 001 PAN NO :AABCP6614R VS. ASST. COMMISSIONER OF INCOME TAX CIRCLE-5(1)(2) BANGALORE APPELLANT RESPONDENT APPELLANT BY : SHRI B.R. SUDHEENDRA, A.R. RESPONDENT BY : SMT. R. PREMI, D.R. DATE OF HEARING : 08.10.2020 DATE OF PRONOUNCEMENT : 09.10.2020 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 1.3.2018 PASSED BY LD. CIT(A), BENGALURU AND IT REL ATES TO ASSESSMENT YEAR 2014-15. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD. CIT(A) IN CONFIRMING THE ADDITION OF RS.1,43,13,879/- RELATIN G TO MALL SHOPPING FESTIVAL EXPENSES AND RS.27,09,868/- RELAT ING TO PARKING AMOUNT DUE TO LAND LORD. 3. THE FACTS RELATING TO THE CASE ARE STATED IN BRI EF. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANAGING COMMERCIAL P ROPERTIES. IT ITA NO.1689/BANG/2018 PRESTIGE AMUSEMENTS PVT. LTD., BANGALORE PAGE 2 OF 8 FILED ITS RETURN OF INCOME FOR AY 2014-15 DECLARING A TOTAL INCOME OF RS.3,57,97,830/-. DURING THE COURSE OF SCRUTINY PR OCEEDINGS, THE A.O. CALLED FOR DETAILS OF LARGE EXPENSES CLAIMED I N PROFIT & LOSS ACCOUNT AND THE TURNOVER RELATED TO THE SAME. IN T HE STATEMENT OF LARGE EXPENSES, THE ASSESSEE, DISCLOSED FOLLOWING T WO ITEMS, EVEN THOUGH THEY DID NOT FIND PLACE IN THE PROFIT AND LO SS ACCOUNT. MARKETING FUND INCOME AGAINST EXPENDITURE SET-OFF 1,43,13,897 PARKING AMOUNT TRANSFERRED TO PAYABLE 27,09,868 4. THE A.O. NOTICED THAT THE ASSESSEE HAS NOT DEBIT ED PROFIT & LOSS ACCOUNT WITH THE AMOUNT OF RS.1,43,13,879/- RE LATING TO MALL SHOPPING FESTIVAL EXPENSES. WHEN QUESTIONED ABOUT IT, THE ASSESSEE EXPLAINED THAT IT HAS EARNED GROSS COLLECTIONS OF R S.1,63,16,060/- ON ACCOUNT OF CONDUCTING MALL SHOPPING FESTIVAL AND INCURRED EXPENDITURE OF RS.1,43,13,897/- ON CONDUCTING THE S AID FESTIVAL. ACCORDINGLY, THERE WAS NET INCOME OF RS.20,02,163/- AND THE SAME WAS SHOWN IN THE P&L ACCOUNT UNDER THE HEAD INCOME FROM FACILITIES & MAINTENANCE. 5. WITH REGARD TO THE PARKING AMOUNT, IT WAS SUB MITTED THAT PARKING INCOME AND EXPENDITURE DO NOT BELONG TO ASS ESSEE AND THE NET INCOME HAS TO BE GIVEN TO THE OWNERS OF THE MAL L. IT WAS SUBMITTED THAT THE PARKING EXPENSES WAS DEBITED TO THE MALL OWNERS ACCOUNT. IT WAS SUBMITTED THAT BOTH THE A BOVE ITEMS WERE INCLUDED IN THE STATEMENT OF LARGE EXPENSES SUBMI TTED TO THE AO, SINCE THEY RELATE TO THE MALL. 6. SINCE THE MALL SHOPPING FESTIVAL EXPENSES OF RS.1,43,13,879/- WAS NOT DEBITED TO P&L ACCOUNT, THE A.O. ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. WITH REGARD TO PARKIN G EXPENSES, THE A.O. EXPRESSED THE VIEW THAT THE ASSESSEE HAS INCLU DED EXPENSES OF ITA NO.1689/BANG/2018 PRESTIGE AMUSEMENTS PVT. LTD., BANGALORE PAGE 3 OF 8 RS.27,09,868/- IN THE DETAILS OF LARGE EXPENSES FUR NISHED TO HIM. SINCE THIS EXPENDITURE IS NOT RELATABLE TO THE ASSE SSEE, THE A.O. ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 7. THE LD. CIT(A) CONFIRMED BOTH THE ADDITIONS A ND HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 8. THE LD. A.R. SUBMITTED THAT THE ASSESSEE HAS REC EIVED GROSS COLLECTIONS OF RS.1,63,16,060/- ON ACCOUNT OF CONDU CTING MALL SHOPPING FESTIVAL AND INCURRED EXPENDITURE OF RS.1, 43,13,897/- IN THAT REGARD. ACCORDINGLY, THERE WAS NET INCOME OF R S.20,02,163/-. HE SUBMITTED THAT THE ASSESSEE HAS INCLUDED THIS AM OUNT UNDER THE HEAD INCOME FROM FACILITIES & MAINTENANCE AND THE SAME IS REPORTED AS REVENUE FROM OPERATIONS. THE LD. A.R . INVITED OUR ATTENTION TO SCHEDULE 16 OF THE ANNUAL REPORT, WHIC H GIVES DETAILS OF REVENUE FROM OPERATIONS. UNDER THE SAID HEAD, THE INCOME FROM FACILITIES & MAINTENANCE WAS DISCLOSED AT RS.22,41, 89,479/-. THE LD A.R SUBMITTED THAT THE ASSESSEE HAS FURNISHED TH E DETAILS OF INCOME FROM FACILITIES AND MAINTENANCE AND THE SA ID DETAILS WOULD SHOW INCOME FROM SHOPPING FESTIVAL EXPENSES AT RS.2 0,02,163/-. ACCORDINGLY HE SUBMITTED THAT THE NET INCOME DISCLO SED IN THE ABOVE LIST, I.E., RS.20,02,163/- REPRESENTS NET AMO UNT OF GROSS COLLECTIONS OF RS.1,63,16,060/- LESS EXPENDITURE OF RS.1,43,13,879/-. ACCORDINGLY HE SUBMITTED THAT TH E ABOVE SAID EXPENDITURE HAS BEEN REDUCED FROM RELATED INCOME, I NSTEAD OF SHOWING SEPARATELY IN THE DEBIT SIDE OF PROFIT AND LOSS ACCOUNT. ACCORDINGLY HE SUBMITTED THAT THE TAX AUTHORITIES A RE NOT RIGHT IN PRESUMING THAT THE ASSESSEE HAS NOT CLAIMED THE ABO VE SAID EXPENDITURE AND ACCORDINGLY THEY ARE NOT JUSTIFIED IN MAKING THIS ADDITION. ITA NO.1689/BANG/2018 PRESTIGE AMUSEMENTS PVT. LTD., BANGALORE PAGE 4 OF 8 9. WITH REGARD TO THE PARKING EXPENSES PAYABLE TO T HE LANDLORD, THE LD. A.R. SUBMITTED THAT THE RELEVANT EXPENDITUR E HAS BEEN DEBITED TO THE MALL OWNER/LANDLORD ACCOUNT TITLED A S PARKING & MP PAYABLE TO LO EVA ACCOUNT AND IT WAS NOT CLAIMED B Y THE ASSESSEE AS EXPENDITURE AT ALL. HE SUBMITTED THAT THE SAID AMOUNT, HOWEVER, WAS INCLUDED IN THE STATEMENT OF LARGE EXPENSES FU RNISHED TO THE A.O. ACCORDINGLY, THE LD. A.R. SUBMITTED THAT THER E IS NO NECESSITY TO MAKE SEPARATE DISALLOWANCE OF AN ITEM, WHICH WAS NOT CLAIMED BY THE ASSESSEE AT ALL. 10. THE LD. D.R. ON THE CONTRARY, PLACED HER RELIAN CE ON THE ORDER PASSED BY LD. CIT(A). 11. WE HEARD THE PARTIES AND PERUSED THE RECORD. T HE FIRST ADDITION RELATES TO MALL SHOPPING FESTIVAL EXPENSES OF RS.1,43,13,879/-. THE ASSESSEE HAS SUBMITTED THAT THE GROSS INCOME EARNED OUT OF THAT FUND IS RS.1,63,16,060/- AND THE EXPENDITURE INCURRED WAS RS.1,43,13,879/- RESULTING IN NET INCOME OF RS.20,02,163/-. THE ABOVE SAID AMOUNT WAS INCLU DED UNDER THE LEDGER ACCOUNT INCOME FROM FACILITIES & MAINTENANC E AMOUNTING TO RS.22,41,89,479/-, WHICH IS REPORTED UNDER THE HEAD REVENUE FROM OPERATIONS IN THE PROFIT & LOSS ACCOUNT. THE ASSESSEE FURNISHED THE DETAILS OF INCOME FROM FACILITIES & M AINTENANCE AS UNDER: ITA NO.1689/BANG/2018 PRESTIGE AMUSEMENTS PVT. LTD., BANGALORE PAGE 5 OF 8 _ PARTICULARS DEBIT CREDIT MAIN HEAD SUB NOTE 3MMD INTEREST PAYABLE - TENANTS 47,440 P&L REVENUE FROM OPERATIONS CENTRE MANAGEMENT FEE - VIJAYA MALL 1,32,01,178 P&L REVENUE FROM OPERATIONS DEDUCTIONS 7,16,925 P&L REVENUE FROM OPERATIONS DEFICIT MALL MANAGEMENT RECOVERY 2,80,96,389 P&L REVENUE FROM OPERATIONS DEPRN - AC - COMMON - FL 17,53,647 P&L REVENUE FROM OPERATIONS DEPRN - AC - DEMISED - CL 45,59,302 P&L REVENUE FROM OPERATIONS DEPRN - DG - COMMON - EL 17,56,197 P&L REVENUE FROM OPERATIONS DINO MACHINE HIRE CHARGES RECEIVED 3,18,000 P&L REVENUE FROM OPERATIONS ELECTRICITY - AC - COMMON - F 13,08,873 P&L REVENUE FROM OPERATIONS ELECTRICITY - AC - DEMISED - C 3,15,13,596 P&L REVENUE FROM OPERATIONS ELECTRICITY - COMMON AREA - D 1,03,56,991 P&L REVENUE FROM OPERATIONS ELECTRICITY - COMMON - AREA - D - EVA 4,69,267 P&L REVENUE FROM OPERATIONS ELECTRICITY - DEMISED - A 5,46,23,251 P&L REVENUE FROM OPERATIONS ELECTRICITY - DEMISED - EVA 1,05,57,418 P&L REVENUE FROM OPERATIONS ESCALATOR MAINT. RECD - FM 88,200 P&L REVENUE FROM OPERATIONS EXPS RECOVERY - ST 8,371 P&L REVENUE FROM OPERATIONS HK SERVICES - RECOVERY 4,38,887 P&L REVENUE FROM OPERATIONS MANAGEMENT CHARGES - UBC 67,80,794 P&L REVENUE FROM OPERATIONS MANAGEMENT FEE - HVAC 2,28,920 P&L REVENUE FROM OPERATIONS MATERIALS (PLU&ELE) RECOVERY - FM 14,180 P&L REVENUE FROM OPERATIONS MNGT. CHARGES 10% I -FORUM 56,78,464 P&L REVENUE FROM OPERATIONS OTHER CHARGES COMMON TO COMPLEX - EVA 81,21,526 P&L REVENUE FROM OPERATIONS OTHER CHARGES COMMON TO COMPLEX . LIK 3,65,33,571 P&L REVENUE FROM OPERATIONS OZONISATIONRECD - PVR 5,82,432 P&L REVENUE FROM OPERATIONS RENT - RECD 7.5% - EVA 3,72,115 P&L REVENUE FROM OPERATIONS REXRECD EVA - 5% 78,749 P&L REVENUE FROM OPERATIONS SHOPP ING FESTIVAL EXPENSES P&L CR 20,02,163 P&L REVENUE FROM OPERATIONS WATER CHARGES RECD - G 32,84,074 P&L REVENUE FROM OPERATIONS WATER CHARGES RECEIVED - EVA 7,15,301 P&L REVENUE FROM OPERATIONS TOTAL 8,371 22,41,97,850 NET REVENUE 22,41,89,479 REVENUE AS PER FINANCIALS 22,41,89 ,479 12. IT CAN BE NOTICED FROM THE ABOVE LIST THAT THE ASSESSEE HAS DISCLOSED THE AMOUNT OF RS.20,02,163/- AS INCOME FR OM SHOPPING FESTIVAL EXPENSES. SINCE THE ASSESSEE HAS INCLUDED NET INCOME, THERE WAS NO NECESSITY FOR THE ASSESSEE TO DISCLOSE THE EXPENDITURE SEPARATELY AGAIN IN THE PROFIT & LOSS ACCOUNT. 13. IT WAS SUBMITTED THAT THE ASSESSEE HAS DISCLOSE D THE MALL SHOPPING FESTIVAL EXPENSES ALSO IN THE STATEMENT O F LARGE EXPENSES CALLED FOR BY THE ASSESSEE, EVEN THOUGH IT WAS NETT ED OFF AGAINST THE ITA NO.1689/BANG/2018 PRESTIGE AMUSEMENTS PVT. LTD., BANGALORE PAGE 6 OF 8 INCOME. WE HAVE NOTICE EARLIER THAT THERE WAS NO N ECESSITY TO SHOW EXPENSES SEPARATELY IN THE PROFIT & LOSS ACCOUNT, W HEN THE EXPENSE ARE NETTED OFF AGAINST THE RELEVANT INCOME. ACCORD INGLY, IT IS NOTICED THAT THE ASSESSEE HAS ACCOUNTED FOR THE EXPENDITURE OF RS.1,43,13,879/- IN THE BOOKS OF ACCOUNTS AND ALSO IN THE PROFIT & LOSS ACCOUNT IN THE FORM OF NETTING OFF THE SAME AG AINST THE RELEVANT INCOME. HENCE, THE TAX AUTHORITIES ARE NOT JUSTIFI ED IN ASSESSING THE SAME AGAIN IN THE HANDS OF THE ASSESSEE. ACCORDING LY, WE SET ASIDE THE ORDER PASSED BY LD. CIT(A) AND DIRECT THE A.O. TO DELETE THIS ADDITION. 14. THE NEXT ISSUE RELATES TO ADDITION OF RS.27,09, 868/- RELATING TO PARKING EXPENSES. THE ASSESSEE SUBMITTED THAT T HE PARKING INCOME & EXPENSES DO NOT BELONG TO IT. SINCE THE A .O. HAS CALLED FOR DETAILS OF LARGE EXPENSES RELATING TO THE MALL OPER ATIONS, THE ASSESSEE INCLUDED THE SAME IN THE STATEMENT OF EXPE NSES FURNISHED TO THE ASSESSEE. THE LD. A.R. INVITED OUR ATTENTIO N TO THE LEDGER ACCOUNT COPIES AND DEMONSTRATED THAT THE PARKING EX PENSES OF RS.27,09,868/- HAS BEEN DEBITED TO THE MALL OWNER/L AND LORD ACCOUNT. ACCORDINGLY HE SUBMITTED THAT ABOVE SAID AMOUNT WAS NOT CLAIMED AS EXPENDITURE IN THE P&L ACCOUNT. 15. THE LEDGER ACCOUNT OF MALL OWNER/LAND LORD AC COUNT TITLED AS PARKING & MP PAYABLE TO LO EVA IS SHOWING A CREDI T BALANCE OF RS.72,59,328/- AS DETAILED BELOW:- ITA NO.1689/BANG/2018 PRESTIGE AMUSEMENTS PVT. LTD., BANGALORE PAGE 7 OF 8 PARKING & MP PAYABLE TO LO EVA LEDGER ACCOUNT 1 APR 2013 TO 31 MAR 2014 DATE PARTIUCLARS VCH TYPE VCH NO. DEBIT CREDIT 1.4.2013 BY OPENING BALANCE 66,30,211.00 31.3.2014 BY PARKING- INCOME - EVA JOURNAL 4945 33,38,985.00 INCOME TRANSFERRED FOR THE YEAR TO PARKING EXPSTRS TO LO JOURNAL 4998 27,09,868.00 EXPS FOR THE YEAR TRANSFERRED TO LO 27,09,868.00 99,69,196.00 TO CLOSING BALANCE 72,59,328.00 99,69,196.00 99,69.196.00 IT CAN BE NOTICED THAT THE PARKING EXPENSES OF RS.2 7,09,868/- IS DEBITED TO THIS ACCOUNT, MEANING THEREBY, THE ASSES SEE DID NOT CLAIM THE ABOVE SAID AMOUNT AS ITS EXPENDITURE. TH E ABOVE SAID LIABILITY OF RS.72,59,328/- IS SHOWN AS CURRENT LIA BILITIES UNDER THE HEAD OTHERS UNDER SCHEDULE 7 (CURRENT LIABILITIES ). THE BREAKUP OF OTHER LIABILITIES IS GIVEN BELOW: PARKING & MP PAYABLE TO LO EVA 72,59,328 RENT RECD OTHERS EVA (PAYABLE TO LO) 25,96,161 TOTAL 98,55,489 16. HENCE, IT IS AMPLY CLEAR THAT THE ASSESSEE HAS NOT CLAIMED THE ABOVE SAID AMOUNT OF RS.27,09,868/- AS EXPENDITURE IN THE BOOKS OF ACCOUNTS. ACCORDINGLY, THE TAX AUTHORITIES ARE NOT JUSTIFIED IN MAKING DISALLOWANCE OF AN ITEM WHICH IS NOT CLAIMED BY THE ITA NO.1689/BANG/2018 PRESTIGE AMUSEMENTS PVT. LTD., BANGALORE PAGE 8 OF 8 ASSESSEE. ACCORDINGLY, WE SET ASIDE THE ORDER PASSE D BY LD. CIT(A) AND DIRECT THE A.O. TO DELETE THIS DISALLOWANCE ALS O. 17. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH OCT, 2020. SD/- (N.V. VASUDEVAN) VICE PRESIDENT SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 9 TH OCT, 2020. VG/SPS COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.