M/s. Guruji Mercantile Pvt. Ltd, Kolkata V. ITO, Ward-6(2), Kolkata

ITA 207/KOL/2023

AI Insights

The case involves M/s. Guruji Mercantile Pvt. Limited, which appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The primary grievance was the confirmation of an addition of Rs.5,64,863 to the assessee's income, which was initially an interest receipt from M/s. Mohan Impressions Pvt. Limited. The assessee argued that TDS was deducted on this interest, and it was included in the income from 'other sources'. However, the CIT(Appeals) reclassified this income under a different tax regime applicable to winnings from lottery or crossword puzzles, taxing it at a flat rate of 30% without allowing any deductions. The Tribunal found that this reclassification was beyond the scope of the original appeal and lacked proper jurisdictional basis.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129043 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-04-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 13-03-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS; FORM 26AS
• Section: 143(1); 139(1)

Judgement Text

ITA No. 207/KOL/2023 Assessment Year : 2017-2018 M/s. Guruji Mercantile Pvt. Limited 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC’ BENCH, KOLKATA Before Shri Rajpal Yadav, Vice-President & Shri Rajesh Kumar, Accountant Member I.T.A. No. 207/KOL/2023 Assessment Year: 2017-2018 M/s. Guruji Mercantile Pvt. Limited,..........Appellant C/o. Rajesh Mohan & Associates, Unit no. 18, 5 th Floor, Bagati House, 34, Ganesh Chandra Avenue, Kolkata-700013 [PAN: AABCG7743G] -Vs.- Income Tax Officer,................................Respondent Ward-6(2), Kolkata, Aayakar Bhawan, 6 th Floor, P-7, Chowringhee Square, Kolkata-700069 Appearances by: Shri Abhishek Bansal, FCA, appeared on behalf of the assesseee Smt. Ranu Biswas, Addl. CIT, DR, appeared on behalf of the Revenue Date of concluding the hearing : April 27, 2023 Date of pronouncing the order : June 01, 2023 O R D E R Per Shri Rajpal Yadav, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income ITA No. 207/KOL/2023 Assessment Year : 2017-2018 M/s. Guruji Mercantile Pvt. Limited 2 Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 9 th March, 2023 passed for assessment year 2017-18. 2. The assessee has taken six grounds of appeal. However, its grievance is that ld. CIT(Appeals) has erred in confirming the addition of Rs.5,64,863/- in the total income of the assessee. 3. Brief facts of the case are that the assessee has filed its return of income under section 139(1) of the Income Tax Act declaring total income of Rs.71,404/-. The CPC while exercising the powers under section 143(1) determined the total taxable income at Rs.6,36,267/-. In this adjustment, CPC has made an addition of Rs.5,64,863/-, which is an interest receipt from M/s. Mohan Impressions Pvt. Limited. According to the revenue, TDS was not deducted by the payer of the interest and, therefore, total interest income is to be included in the taxable income of the assessee. The assessee filed application contending therein that it has computed Rs.32,07,748/- under the head “income from other sources” and in this income, the interest received from M/s. Mohan Impressions Pvt. Limited has been included. The assessee has also placed on record the rectified Form 26AS exhibiting the fact that TDS was also made on this interest. The assessee has filed the ITA No. 207/KOL/2023 Assessment Year : 2017-2018 M/s. Guruji Mercantile Pvt. Limited 3 complete details of Form 26AS and how CPC has disallowed it while processing the return under section 143(1) and rejecting the application under section 154. 4. The ld. CIT(Appeals) while considering the contentions of the assessee has observed that the assessee has income from ‘Winnings from Lottery’ or ‘Crossword Puzzles’. According to him, section 115BB prescribes a different tax regime and tax is charged @ 30% flat. Apart from this, no deduction, allowance or loss is allowed to be set off against such income as per section 58(4) of the Act. Hence this Winning is taxed at a straight rate of 30%. In other words, instead of deciding the issue whether interest income from M/s. Mohan Impressions Pvt. Limited has to be included in the income from other source or not, ld. CIT(Appeals) has totally changed the colour by holding that all these aspects are to be ignored only gross income from Winnings of Lottery or ‘Crossword Puzzles’ are to be taxed @ 30%. 5. It is to be observed that this was not the subject matter of appeal and ld. CIT(Appeals) has not issued any notice for enhancement. If all these are to be looked into, then the case of the assessee ought to have been selected for scrutiny assessment. The dispute before us is, whether addition of Rs.5,64,863/- is sustainable or not. ITA No. 207/KOL/2023 Assessment Year : 2017-2018 M/s. Guruji Mercantile Pvt. Limited 4 Instead of addressing this issue, ld. CIT(Appeals) went into altogether new issue and for that it has no jurisdiction. Therefore, we allow this appeal of the assessee and delete the addition made by the CPC. 6. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on June 1 st , 2023. Sd/- Sd/- (Rajesh Kumar) (Rajpal Yadav) Accountant Member Vice-President(KZ) Kolkata, the 1 st day of June, 2023 Copies to : (1) M/s. Guruji Mercantile Pvt. Limited, C/o. Rajesh Mohan & Associates, Unit no. 18, 5 th Floor, Bagati House, 34, Ganesh Chandra Avenue, Kolkata-700013 (2) Income Tax Officer, Ward-6(2), Kolkata, Aayakar Bhawan, 6 th Floor, P-7, Chowringhee Square, Kolkata-700069 (3) Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi; (4) Commissioner of Income Tax , (5) The Departmental Representative (6) Guard File TRUE COPY By order Assistant Registrar Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.