Shetkari Sahakari Sangh Ltd, Kolhapur V. Deputy Commissioner of Income-tax, Circle - 1, Kolhapur

ITA 234/PUN/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 0253 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 24-01-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Deemed to accrue or arise in india
• Section: 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपीऱ सं. / ITA No.234/PUN/2018 निर्धारण वषा / Assessment Year : 2010-11 Shetkari Sahakari Sangh Ltd., S.V. Phadnis C.A. / Sushant S. Phadnis, 613 E Ward, Phadnis Chambers, Shahupuri, 1 st Lane, Kolhapur – 416001 PAN: AAATS5436L .......अऩीऱाथी / Appellant बिधम / V/s. The Dy. Commissioner of Income Tax, Circle 1, Kolhapur ......प्रत्यथी / Respondent Assessee by : None Revenue by : Shri S.P. Walimbe स ु नवाई की तारीख / Date of Hearing : 14-07-2022 घोषणा की तारीख / Date of Pronouncement : 20-07-2022 आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the assessee directed against the order of Ld. Commissioner of Income Tax (Appeals)-1, Kolhapur, dated 16.11.2017 for the assessment year 2010-11. 2. Briefly, the facts of the case are as under: 2 ITA No.234/PUN/2018 Shetkari Sahakari Sangh Ltd. The appellant is a co-operative society engaged in the business of purchase & sale of household material like wheat, rice, etc. and sale of petroleum products. The return of income for the assessment year 2010- 11 was filed on 15.10.2010 declaring Nil income after set off of brought forward business losses, etc. Against the said return of income, assessment was completed by the Assessing Officer (AO) after making addition of Rs.22 lakhs under the head „Income from house property‟. The factual matrix of the case is as under: The appellant society owns a building at Kolhapur which was given on lease to M/s. Home Care Retail Marts Pvt. Ltd. at Rs.2,00,000/- per month w.e.f. August, 2008. However, during the previous year under consideration, the appellant society received rent of only Rs.2,00,000/- and the balance rent was unrealized by the appellant and the same was not offered to tax on the ground that the rented premises was locked and tenant was not traceable and the appellant could not recover the rent from the tenant. It was claimed that Arbitrator was appointed by the Hon‟ble Bombay High Court in the above circumstances of unrealized rent of Rs.22 lakhs was not offered to tax. However, the AO was of the view that since the appellant was following mercantile system of accounting, the accrued rent should be offered to tax irrespective of the fact that the rent was realized or not, accordingly, brought to tax the unrealized rent of Rs.22 lakhs. Being aggrieved by the above addition, an appeal was filed before the CIT(A), who on due consideration of the submissions made on behalf of 3 ITA No.234/PUN/2018 Shetkari Sahakari Sangh Ltd. the appellant, had confirmed the findings of AO and accordingly, dismissed the appeal. 3. Being aggrieved by the order of CIT(A), the assessee is in appeal before us in the present appeal. When the matter was called on, none appeared on behalf of the appellant society, despite due service of notice of hearing. 4. On the other hand, ld. Sr.DR supported the orders of lower authorities and submitted that no interference is called for. 5. We have heard the learned Sr.DR and perused the material on record. The issue in the present appeal relates to the assessability of unrealized rent while computing the income under “house property”. On conjoint reading of sections 2(24), 14, 20 and 23 of the Income-tax Act, 1961, it makes clear that what is to be taxed under the provisions of section 22 under the head „Income from house property‟ is deemed income of the assessee from the property owned by him as held by Hon'ble Supreme Court in the case of Chelmsford Club vs. CIT 243 ITR 89 (SC) and what is charged to tax under section 22 is that the annual value of the property irrespective of the fact whether income was actually received or had accrued to the assessee. There is no provision for allowing unrealized rent while computing the income under the head „Income from house property‟. Therefore, we are of the considered opinion that the AO had rightly brought to tax the unrealized rent of Rs.22 lakhs. We do not find 4 ITA No.234/PUN/2018 Shetkari Sahakari Sangh Ltd. any reason to interfere in the orders of authorities below. Accordingly, the appeal filed by the assessee stands dismissed. 6. In the result, the appeal filed by the assessee is dismissed. Order pronounced in the open court on 20 th July, 2022. Sd/- Sd/- S.S.VISWANETHRA RAVI INTURI RAMA RAO JUDICIAL MEMBER ACCOUNTANT MEMBER ऩ ु णे / Pune; ददनाांक / Dated : 20 th July, 2022 GCVSR आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order is forwarded to : 1. अऩीऱाथी / The Appellant; 2. प्रत्यथी / The Respondent; 3. आयकर आय ु क्त(अऩीऱ) / The CIT(A)-1, Kolhapur; 4. The Pr.CIT-1, Kolhapur 5. ववभागीय प्रतततनधध, आयकर अऩीऱीय अधधकरण, ऩ ु णे “A” / DR ‘A’, ITAT, Pune; 6. गार्ड पाईऱ / Guard file. आदेशान ु सार / BY ORDER, //सत्यावऩत प्रतत// True Copy// वररष्ठ तनजी सधिव / Sr. Private Secretary आयकर अऩीऱीय अधधकरण, ऩ ु णे / ITAT, Pune