Manjunathesh Ware Housing , Hassan V. The Income Tax Officer Ward-1 , Hassan

ITA 2315/BANG/2018

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 0776 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 03-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NITISH RANJAN
• Keywords: Opportunity of being heard; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO. 23 15 /BANG/2018 ASSESSMENT YEAR : 20 0 7 - 08 M/S. MANJUNATHESH WARE HOUSING, B. KATIHALI, ARASIKERE ROAD, HASSAN 573 201. PAN : ABAFS 2953 D VS. THE INCOME-TAX OFFICER, WARD 1, HASSAN. APPELLANT RESPONDENT ASSESSEE BY : SHRI. NITISH RANJAN, CA REVENUE BY : SHRI. PRIYADARSHI MISHRA, JCIT, SPECIAL RANGE - III DATE OF HEARING : 14 .0 8 .2018 DATE OF PRONOUNCEMENT : 05 . 10 .2018 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), INTER ALIA, ON FOLLOWING GROUNDS: 1. THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)('CIT(A)') IS OPPOSED TO LAW, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE ORDER IS PASSED IN HASTE, WITHOUT PROVIDING SUFFICIENT AND REASONABLE OPPORTUNITY OF BEING HEARD. 3. THE ORDER IS PASSED AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND THUS LIABLE TO BE QUASHED. 4. THE LD. CIT(A) ERRED IN UPHOLDING THE INCOME COMPUTED BY THE LD. ASSESSING OFFICER ('AO'), OF RS 6,56,994/- AS AGAINST THE LOSS OF RS. 1,12,410/- DECLARED BY THE APPELLANT UNDER THE CONTENTION THAT THE RENTAL INCOME OF THE APPELLANT IS TO BROUGHT UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' AND NOT UNDER 'BUSINESS AND PROFESSION'. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT THE MAIN BUSINESS OF THE APPELLANT IS ITA NO.2315/BANG/2018 PAGE 2 OF 3 PROVIDING WAREHOUSING SERVICES AND ANY INCOME RECEIVED IN THIS BEHALF WOULD FALL UNDER INCOME FROM BUSINESS OR PROFESSION. 6. THE LD. CIT(A) AND LD. AO HAS FAILED TO THROW LIGHT ON THE FACT THAT THE APPELLANT IS A PARTNERSHIP FIRM REGISTERED UNDER THE INDIAN PARTNERSHIP ACT,1932 AND THE NATURE OF BUSINESS STATED IN THE PARTNERSHIP DEED INCLUDES: '... WAREHOUSE, FERTILIZER MIXING AND SUCH OTHER BUSINESS WHICH ARE USUALLY ASSOCIATED OR INCIDENTAL TO THE SAID BUSINESS.... 7. THE LD. AO HAS IGNORED THAT THE APPELLANT IS EXPECTED TO PROVIDE OTHER SERVICES SUCH AS SECURITY, LIGHTING, PEST CONTROL ETC. IN ORDER TO BE IN PAR WITH OTHER COMPETITORS AND SUCH EXPENDITURES ARE INCIDENTAL TO ITS MAIN BUSINESS. 8. THE LD. CIT(A) AND THE LD. AO HAS ERRED IN NOT APPRECIATING THE FACT THAT THE TRANSACTION IS TO BE LOOKED FROM BUSINESSMEN POINT OF VIEW, AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF A. M/S. CHENNAI PROPERTIES & INVESTMENTS LTD VS. COMMISSIONER OF INCOME TAX [2015] 373 ITR 673 B. M/S. KARANPURA DEVELOPMENT CO., LTD VS THE COMMISSIONER OF INCOME- TAX [1962] 44 ITR 362 AND C. M/S. RAYALA CORP. PVT LTD VS ASSISTANT COMMISSIONER OF INCOME [6438/2016] THE APPELLANT SEEKS YOUR LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE GROUNDS URGED AT THE TIME OF HEARING. 2. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION THAT CIT(A) HAS DISMISSED THE APPEAL EX-PARTE WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. DESPITE REQUEST OF THE ASSESSEE, THE CIT(A) HAS NOT AFFORDED OPPORTUNITY AND DISPOSED OFF THE APPEAL EX-PARTE THAT TOO NOT ON MERIT. 3. THE LEARNED DR ON THE OTHER HAND PLACED RELIANCE UPON THE ORDER OF CIT(A). 4. HAVING CAREFULLY EXAMINED THE ORDERS OF LOWER AUTHORITIES IN THE LIGHT OF RIVAL SUBMISSIONS, WE FIND THAT CIT(A) HAS DISPOSED OFF THE APPEAL EX-PARTE WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO ITA NO.2315/BANG/2018 PAGE 3 OF 3 THE ASSESSEE. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO READJUDICATE THE GROUNDS RAISED BEFORE HIM ON MERIT, AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF OCTOBER, 2018. SD/- SD/- (A. K. GARODIA) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE. DATE: 5 TH OCTOBER, 2018. /NS/ COPY TO: 1. APPELLANTS 2. RESPONDENTS 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE