Ram Mohan Dorairaj, Salem V. ITO(International Taxation)-2(1), Chennai

ITA 2173/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5771 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 05-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN JCIT D R
• Assessee Lawyers: G GOUTHAMANC A
• Keywords: Depreciation

Judgement Text

, B/ SMC , IN THE INCOME TAX APPELLATE TRIBUNAL B/SMC BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER I.T.A.NO.2173 /MDS./2017 ( ASSESSMENT YEAR : 2013-14 ) SHRI RAM MOHAN DORAI RAJ , C/O. D.BALAKRISHNAN, ACCOUNTS DEPARTMENT, SRC PROJECTS P. LTD., 4B,LAKSHMKPURAM GANDHI ROAD, SALEM 636 007. VS. THE INCOME TAX OFFICER, INTERNATIONAL TAXATION 2(1), CHENNAI. PAN AIGPD 9856 M ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MR.G.GOUTHAMAN,C.A / RESPONDENT BY : MR.B.SAGADEVAN, JCIT, D.R ! ' / DATE OF HEARING : 20.11.2017 #$%& ! ' /DATE OF PRONOUNCEMENT : 04.12.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-16, CHENN AI DATED 01.06.2017 PERTAINING TO ASSESSMENT YEAR 2013-14. ITA NO. 2173/MDS/2017 2 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS FOR ADJUDICATION. 1. THE ORDER OF THE APPELLATE COMMISSIONER REJECTIN G THE CLAIM OF THE APPELLANT IS ERRONEOUS AND UNSUSTAINABLE ON THE FAC TS OF THE CASE. 2. THE APPELLATE COMMISSIONER ERRED IN REJECTING TH E CLAIM OF THE ASSESSEE FOR THE ACTUAL EXPENSES INCURRED AGAINST THE SERVIC E CHARGES PAID BY THE TENANT AND THE PAYMENTS WERE ONLY FOR MEETING SUCH EXPENSES. 3. THE APPELLATE COMMISSIONER FAILED TO APPRECIATE THE FACT THAT THE APPELLANT IS ENTITLED TO CLAIM EXPENSES AS THE INCO ME COLLECTED ARE ONLY TO MAINTAIN AND UPKEEP THE PROPERTY AND FOR PROVIDING CERTAIN FACILITIES. 4. THE APPELLATE COMMISSIONER IS ALSO FAILED TO APP RECIATE THE FACT THAT, IT IS THE DUTY OF THE TENANT TO MAINTAIN AND UPKEEP THE L EASED PROPERTY. 5. THE APPELLATE COMMISSIONER IS ALSO FAILED TO TAK E INTO ACCOUNT THAT THE APPELLANT IS MAINTAINING PROPER RECORDS FOR HIS INC OME AND EXPENSES AND HIS SINCERITY AND REGULARITY AS MUCH AS IN FILING H IS RETURN OF INCOME AND DISCHARGING TAX LIABILITY WITHIN THE TIME LIMIT. 6. THE APPELLATE COMMISSIONER IS ALSO FAILED TO APP RECIATE THE FACT THAT THE APPELLANT IS GENUINELY COMPUTING HIS INCOME AND PAY ING THE TAXES. 7. THE APPELLATE COMMISSIONER IS FAILED TO TAKE INT O ACCOUNT THAT THE INTEREST INCOME IS DISCLOSED ON RECEIPT BASIS AND FAILED TO VERIFY THE SUBSEQUENT YEARS RECORD AS THE INCOME OFFERED IN THE SUBSEQUE NT YEAR. 8. THE APPELLATE COMMISSIONER FAILED TO CONSIDER TH E SUBMISSIONS MADE BY THE APPELLANT AND WITHOUT ANY REASON, SIMPLY REJECT ED THE APPEAL. 9. IN VIEW OF THE ABOVE SUBMISSIONS AND THE OTHER S UBMISSIONS WHICH MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THA T THE ORDER DATED 08- 03/20 16 PASSED BY THE LD. INCOME TAX OFFICER, INTE RNATIONAL TAXATION 2(1), CHENNAI, FOR THE Y 2013-14 MAY KINDLY BE SET ASIDE AND THE ADDITIONS MADE MAY ALSO BE DELETED. 2.1 THE CRUX OF THE ABOVE GROUND IS WITH REGARD TO DISALLOWANCE OF ` 6,32,856/- CLAIMED AS (I) EXPENDITURE TO EARN SERV ICE CHARGES ITA NO. 2173/MDS/2017 3 COLLECTED FROM HIS TENANT AND DISALLOWANCE OF ` 93,009/- CLAIMED AS (II) INTEREST INCOME ON RECEIPT BASIS. 3. WITH REGARD TO FIRST ISSUE, THE ASSESSEE CLAIME D FOLLOWING EXPENSES OUT OF SERVICE CHARGES RECEIVED BY THE ASS ESSEE FROM TENANT. THE ASSESSEE HAD CLAIMED EXPENSES U/S.57 OF THE ACT AS DETAILED BELOW:- PARTICULARS ` SEVANTS SALARY 3,90,000 GAS SUPPLY 78,395 EQUIPMENTS MAINTENANCE 62,817 GEN. EXPENSES 70,130 DEPRECIATION @ 15% ON 2,10,095/- 31,514 TOTAL 6,32,856 THE ASSESSEE HAS NOT FURNISHED ANY PROOF OF THE ABO VE EXPENDITURE EITHER BEFORE THE LD. ASSESSING OFFICER OR BEFORE T HE LD.CIT(A). HENCE SAME WAS DISALLOWED BY THE REVENUE. AGAINST THE ORD ER OF LD.CIT(A), NOW THE ASSESSEE IS IN APPEAL BEFORE US. 4. BEFORE US, LD.A.R SUBMITTED THAT THE MAINTENANC E CHARGES COLLECTED FROM TENANTS BY THE AGENT OF THE ASSESSEE AS THE ASSESSEE WAS NON-RESIDENT, AND THE SAID REPRESENTATIVE OF A SSESSEE INCURRED THE ABOVE EXPENDITURE AND THAT REPRESENTATIVE PRODU CED THE ITA NO. 2173/MDS/2017 4 STATEMENT OF EXPENSES TO THE ASSESSEE. THE SAME WA S CLAIMED AS EXPENDITURE OUT OF THE INCOME OF SERVICE CHARGES RE CEIVED FROM VARIOUS TENANTS. SINCE THE ASSESSEE WAS IN ABROAD, IT WAS NOT POSSIBLE TO KEEP ALL THE EVIDENCES/RECEIPTS OF THE EXPENDITURE WITH HIM. 5. ON THE OTHER HAND, LD.D.R SUBMITTED THAT THE AS SESSEE HAS NOT PRODUCED ANY EVIDENCE TO CLAIM ABOVE EXPENDITURE. THEREFORE, THE SAME WAS DISALLOWED. 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. ADMITTEDLY, THE ASSESSEE CLAIMED THE EXP ENDITURE TOTALING TO ` 6,32,856/-. AS DISCUSSED EARLIER, THE ASSESSEE HAD NOT PRODUCED ANY EVIDENCE IN SUPPORT OF THE CLAIM AND THE PLEA O F THE LD.A.R IS THAT THE AGENT WAS PRODUCED THE STATEMENT OF EXPENDITURE AND ASSESSEE IS NOT HAVING ANY PROOF FOR THE SAME. IT WAS STATE D BY THE LD.A.R THAT THERE WAS NO EVIDENCE PLACED BEFORE THE LOWER AUTHO RITIES OTHER THAN THE STATEMENT PRODUCED BY THE PERSON, WHO HAS COLLE CTED THE MAINTENANCE CHARGES FROM VARIOUS TENANTS. IN MY OPI NION, WHENEVER THE ASSESSEE CLAIMED ANY EXPENDITURE, IT IS THE DUT Y OF THE ASSESSEE TO SUBSTANTIATE THE SAME BY PRODUCING THE BILLS, VO UCHERS, ITA NO. 2173/MDS/2017 5 RECEIPTS ETC. TO CLAIM SUCH EXPENDITURE. IN THE ABS ENCE OF THE SAME, I AM NOT IN A POSITION TO APPRECIATE THE ARGUMENT OF THE LD.A.R AND ACCORDINGLY I AM INCLINED TO REMIT THE ISSUE IN DIS PUTE TO THE FILE OF LD. ASSESSING OFFICER FOR FRESH CONSIDERATION. THE ASS ESSEE IS DIRECTED TO PRODUCE THE NECESSARY EVIDENCE BEFORE THE A.O. 7. RELATING TO THE SECOND ISSUE, THE LD.A.R SUBMIT TED THAT THE ASSESSEE OFFERED THE INTEREST INCOME ON CASH SYSTEM METHOD AND A SUM OF ` 93,009/- WAS OFFERED TO TAX IN THE NEXT ASSESSMEN T YEAR AND ALSO WAS NOT CLAIMED ANY TDS CREDIT IN THE ASSE SSMENT YEAR UNDER CONSIDERATION. 8. LD.D.R SUBMITTED THAT THE ISSUE MAY BE EXAMINED BY THE AO AFRESH. 9. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. IN MY OPINION, IF THE ASSESSEE OFFERING T HE INTEREST INCOME UNDER CASH SYSTEM, THE ACCRUED INTEREST OF ` 93,009/- CANNOT BE TAXED IN THE ASSESSMENT YEAR UNDER CONSIDERATION AND IT I S TO BE TAXED WHEN IT ACTUALLY RECEIVED BY THE ASSESSEE. IT IS AL SO STATED BY THE LD.A.R THAT IT WAS OFFERED TAXATION ON THE SUBSEQUE NT ASSESSMENT YEAR. BEING SO, IT IS APPROPRIATE TO REMIT THE ISS UE TO THE FILE OF LD. ITA NO. 2173/MDS/2017 6 ASSESSING OFFICER TO EXAMINE WHETHER THE ASSESSEE F OLLOWING THE CASH SYSTEM OF BOOK KEEPING AND THE IMPUGNED AMOUNT WHICH WAS OFFERED TO TAX IN THE SUBSEQUENT ASSESSMENT YEAR, I F IT IS OFFERED TO SUBSEQUENT ASSESSMENT YEAR ON THE CASH SYSTEM OF AC COUNTING, THE SAME ADDITION CANNOT BE MADE ON THE ASSESSMENT YEAR UNDER CONSIDERATION. ACCORDINGLY, THIS ISSUE IS REMITTED TO THE FILE OF LD. ASSESSING OFFICER FOR FRESH CONSIDERATION. 10. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTL Y ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 04 TH DECEMBER, 2017. SD/- ( ) ( CHANDRA POOJARI ) /ACCOUNTANT MEMBER CHENNAI, DATED THE 04 TH DECEMBER, 2017 . K S SUNDARAM. ' ( )!*+ ,+%! / COPY TO: 1 . / APPELLANT 3. ' ' -! () / CIT(A) 5. +0 1 )!)23 / DR 2. / RESPONDENT 4. ' ' -! / CIT 6. 1 45 6 / GF