M/s.Pathi Investments (Pvt) Ltd., Bangalore V. Income Tax Officer, Bangalore

ITA 2126/BANG/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7698 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 05-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI JT
• Assessee Lawyers: DR VISHNU BHARATH
• Keywords: Business income
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - B BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO.2126/BANG/2016 ASSESSMENT YEAR : 2013-14 M/S. PATHI INVESTMENTS (PVT) LTD., NO.112, NAGARTHPET ROAD, BENGALURU 560 053. PAN: AABCP 3251A VS. THE INCOME TAX OFFICER, 5(1)(2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : DR. VISHNU BHARATH, CA RESPONDENT BY : SMT. PADMA MEENAKSHI, JT.CIT(DR)(ITAT) DATE OF HEARING : 02.08.2017 DATE OF PRONOUNCEMENT : 04.08.2017 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAIN ST THE ORDER OF CIT(APPEALS) INTER ALIA ON THE FOLLOWING GROUNDS:- 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUITY, W EIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE FINDING OF THE AUTHORITIES BELOW IS PERVERS E AND IS CONTRARY TO THE EVIDENCE OR RECORD AND THUS IS VITI ATED. 3. THE ORDER OF THE LEARNED CIT APPEALS IS ERRONEO US, AS THE MAIN GROUND THAT THE ASSESSING OFFICER OUGHT TO HAV E CONSIDERED THE BOOKS OF COMPANY WHICH WAS NOT REJECTED BUT TAK EN THE ITA NO.2126/BANG/2016 PAGE 2 OF 5 RENTALS AS PER THE AGREEMENTS WITH THE TENANTS, WAS NEVER CONSIDERED. 4. THE LEARNED CIT APPEALS FAILED TO APPRECIATE TH AT WHEN THE BOOKS OF ACCOUNTS ARE MAINTAINED, AND ACCEPTED, WITHOUT REJECTING U/S 145, THERE IS NO SCOPE FOR ARRIVING T HE INCOME ON THE BASIS OF RENTAL AGREEMENTS. 5. THE LEARNED CIT APPEALS IS NOT CORRECT IN STATI NG THAT 'THE GROUNDS ARE NOT PRESSED AND THEREFORE THE SAME ARE TREATED DISMISSED.' 6. THE BOOKS OF ACCOUNT OF THE ASSESSEE WHICH ALSO CONTAINED THE RENT RECEIVED FROM DIFFERENT TENANTS' HAD NOT B EEN REJECTED BY THE ASSESSING OFFICER FOR THE RELEVANT PERIOD AND T HAT THERE WAS NO ADVERSE MATERIAL AVAILABLE WITH THE ASSESSING OF FICER IN RESPECT OF RENTALS AS PER BOOKS, WITHOUT FINDING AN Y DISCREPANCY IN THE BOOKS OF ACCOUNT TAKING AS PER AGREEMENTS, W AS PRESUMPTIVE AND CONTRARY TO THE LAW. THE RELIANCE W AS PLACED ON THE FOLLOWING CASE LAWS: 1. SAKTHI TOURIST HOME VS. CIT [2009] 308 ITR 228 ( KER) 2. SMT. AMIYA BALA PAUL VS. CIT [2003] 262 ITR 407 (SC) 3. CIT VS. STAR BUILDERS [2007] 294 ITR 338 (GUJ.) NOW THE DEPARTMENT IS IN APPEAL. 4. SARGAM CINEMA VS. CIT [2010] 328 ITR 513 (SC) 7. APPELLANT MAINTAINED BOOKS OF ACCOUNT WHICH WER E PRODUCED BEFORE THE ASSESSING OFFICER WHO TEST CHEC KED THOSE BOOKS, HOWEVER, COULD NOT POINT OUT ANY DISCREPANCY IN THOSE BOOKS OF ACCOUNT. THE BOOKS OF ACCOUNTS THEREFORE N OT REJECTED U/S 145, OFFICER SIMPLY RELIED ON THE AGREEMENTS, W HILE MAKING THE IMPUGNED ADDITION IS NOT JUSTIFIED. 8. CIT APPEALS FURTHER HAS NOT CONSIDERED THE GROU ND OF APPEAL WITH REGARDS TO CREDIT NOT GIVEN FOR THE SEL F ASSESSMENT TAX PAID OF RS. 1,47,016/- AND ALSO CHARGING INTEREST U /S 234 B & 234 C WHICH IS CHARGED WITHOUT GIVING CREDIT FOR TAXES PAID. 9. FOR THESE AND OTHER GROUNDS WHICH MAY BE TAKEN UP AT THE TIME OF THE HEARING, THE APPELLANT PRAY FOR ALLOWIN G THE APPEAL BY TREATING AS BUSINESS INCOME AND FOR ALLOWING THE PA RTNERS REMUNERATION THEREON. ITA NO.2126/BANG/2016 PAGE 3 OF 5 2. DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE CIT(APPEALS) HAS NOT PROPERLY AP PRECIATED THE FACTS AND MATERIAL PLACED BEFORE HIM AND DISMISSED THE APPEAL OF THE ASSESSEE. HE HAS NOT RATHER CONSIDERED THE ACTUAL RENT RECEIVED BY THE ASSESSEE. 3. DURING THE COURSE OF HEARING, A SPECIFIC QUERY W AS RAISED THAT IF THERE IS FACTUAL IN THE ORDER OF AO, WHETHER ASSESS EE HAS MOVED AN APPLICATION U/S. 154 OF THE ACT AND IN RESPONSE THE RETO, IT WAS CONTENDED THAT HE HAS MOVED APPLICATION U/S. 154 AND AO HAS P ASSED AN ORDER THEREON. THE AO HAS ACCORDINGLY TAKEN RENTAL INCOM E OF RS.31,45,508 WITHOUT APPRECIATING THE CONTENTIONS OF THE ASSESSE E THAT IT HAS RECEIVED LESSER RENT. 4. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTEND ED THAT THE MATTER BE RESTORED TO THE AO TO RE-EXAMINE THE DETAILS OF THE ACTUAL RENT RECEIVED BY THE ASSESSEE AND ALSO THE SERVICE TAX PAID OUT O F RENT RECEIVED BY THE ASSESSEE. 5. THE LD. DR, ON THE OTHER HAND, HAS PLACED RELIAN CE ON THE ORDER OF CIT(APPEALS). 6. HAVING CAREFULLY EXAMINED THE ORDER OF LOWER AUT HORITIES IN THE LIGHT OF RIVAL SUBMISSIONS, I FIND THAT THE CIT(APPEALS) HAS EXAMINED THE ISSUE IN DETAIL IN THE LIGHT OF ASSESSEES CONTENTIONS. THE CIT(A) HAS ALSO TAKEN ITA NO.2126/BANG/2016 PAGE 4 OF 5 NOTE OF THE FACT THAT ACTUAL RENT RECEIVED WAS RS.3 1,45,508 AGAINST THE RENT CONSIDERED BY THE AO AT RS.37,81,647. THOUGH THE A SSESSEE HAS ARGUED ORALLY, BUT NO GROUND IS RAISED WITH REGARD TO PAYM ENT OF SERVICE TAX BY THE ASSESSEE ITSELF. GENERAL GROUNDS WERE RAISED BEFOR E ME. I HAVE, HOWEVER, CAREFULLY EXAMINED THE ORDERS OF LOWER AUTHORITIES AND I FIND THAT THE CIT(APPEALS) HAS TAKEN NOTE OF ACTUAL RENT RECEIVED AND HAS DIRECTED THE AO TO COMPUTE THE ACTUAL RENTAL INCOME RECEIVED AFT ER CONSIDERING THE FACT THAT PART PERIOD OF PROPERTY WAS VACANT. SINCE THE CIT(APPEALS) HAS TAKEN COGNIZANCE OF THE RELEVANT FACTS AND ISSUED NECESSA RY DIRECTIONS TO THE AO, I FIND NO INFIRMITY IN HIS ORDER. ACCORDINGLY, I C ONFIRM HIS ORDER. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMISS ED. PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF AUGUST, 2017. SD/- (SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE, DATED, THE 4 TH AUGUST, 2017. / D ESAI S MURTHY / ITA NO.2126/BANG/2016 PAGE 5 OF 5 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.