Technomark Television Network Pvt Ltd , Bangalore V. Income Tax Officer Ward-7(1)(1), Bangalore

ITA 2349/BANG/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 2618 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 09-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K BIJU
• Assessee Lawyers: MURALIDHARA H
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH B SMC BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.2 349/BANG/2018 (ASST. YEAR 2015-16) TECHNOMARK TELEVISION NETWORK PVT. LTD., BENGALURU. . APPELLANT PAN AABCT3014H. VS. THE INCOME-TAX OFFICER, WARD-7(1)(1), BENGALURU. . RESPONDENT APPELLANT BY : SHRI MURALIDHARA H, ADVOCATE RESPONDENT BY : SHRI M.K BIJU, ADDL. CIT DATE OF HEARING : 04- 09-2018 DATE OF PRONOUNCEMENT : -10-2018 O R D E R PER SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER : THIS APPEAL IS PREFERRED BY THE ASSESSEE AGA INST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) INTER ALIA ON FOLLOWING GROUNDS:- 1. THE ORDER OF LEARNED COMMISSIONER OF INCOME TA X (APPEAL) IS OPPOSED LAW AND FACTS OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN UPHOLDING THE ORDER OF THE ASSESSING OFFIC ER. 3. THE APPELLANT HAS CLAIMED THE DEDUCTION TOWARDS THE PAYMENT OF MUNICIPAL U/S23(1) PAID BY HIM TOWARDS T HE DEMAND RAISED BY BBMP AFTER APPELLANT BECOMING THE OWNER, BUT THE LEARNED COMMISSIONER OF INCOME-TAX AND THE ASSESSING OFFICER ERRED IN NOT ALLOWING THE DEDUCTION ON THE GROUND THAT THE DEMAND WAS RELATING TO EARLIER YEARS. WHER EAS THE ITA NO.2349/B/18 2 SECTION 23(1) OF THE INCOME TAX ACT PROVIDES TO ALL OW THE DEDUCTION FOR ALL THE DEMANDS RAISED AND PAID FOR A NY PERIOD DURING THE YEAR. 4. WITH THESE AND SUCH OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING THE APPELLANT PRAYS FOR THE REL IEF SOUGHT FOR. 2. DURING THE COURSE OF HEARING THE LD COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION THAT THE ASSESSEE HAS PURCHA SED THE PROPERTY AT NGEF LAYOUT, K.R PURAM HOBBLI, BANGALORE ON THE BASIS A S IS WHERE IS AND AS IS WHAT IS THROUGH E-AUCTION ON 27/7/2014. AFTER THE PURCHASE OF THE PROPERTY ASSESSEE RECEIVED A DEMAND OF MUNICIPALITY TAX OF RS.25,93,939/- AND THE SAME WAS PAID BY THE ASSESSEE. WHILE COMPU TING ANNUAL LET OUT VALUE AS PER SEC. 23 OF THE ACT, THE ASSESSEE HAS C OMPUTED THE SAME BUT THE AO DISALLOWED THE COMPUTATION OF ANNUAL LET OUT VAL UE (ALV) WORKED OUT BY THE ASSESSEE ON THE GROUND THAT THE LIABILIT Y TO PAY SUCH TAX WAS INCURRED BY THE PREVIOUS OWNER AND NOT BY THE ASSE SSEE. HE ACCORDINGLY DISALLOWED THE MUNICIPAL TAX OF RS.25,93,939/- AND THE HOUSE PROPERTY INCOME HAD BROUGHT IT TO TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 3. THE ASSESSEE PREFERRED AN APPEAL BEFORE TH E CIT(A) AND HE DID NOT FIND FAVOUAR WITH IT. 4. NOW THE ASSESSEE IS BEFORE THE TRIBUNAL AN D INVITED OUR ATTENTION TO THE PROVISION TO SEC. 23 OF THE ACT, ACCORDING TO WHICH, THE TAX LEVIED BY ANY AUTHORITY IN RESPECT TO PROPERTY SHALL BE DEDUC TED WITH RESPECT TO THE PREVIOUS YEAR TO PAY SUCH TAX WAS INCURRED BY THE O WNER ACCORDING TO THE METHOD OF ACCOUNTING REGULARLY IMPLIED BY LAW IN DE TERMINING THE ANNUAL LET OUT VALUE OF THE PROPERTY WITH THE PREVIOUS YEA R IN WHICH TAX ARE ACTUALLY PAID BY HIM. THE LD COUNSEL FOR THE ASSES SEE FURTHER CONTENDED THAT SINCE THE PROPERTY WAS PURCHASED BY THE ASSESS EE IN LIEU OF E-ACTION ITA NO.2349/B/18 3 AS IS WHERE IS AND AS IS WHAT IS BASIS, IT PURCH ASED THE PROPERTY ALONG WITH ALL LIABILITIES. THEREFORE, THE LIABILITY OF T HE PROPERTY BECOMES THE LIABILITY OF THE ASSESSEE AND SAME MAY BE DEDUCTED WHILE COMPUTING THE ALP AS PER SEC. 23 OF THE ACT. 5. THE LD DR ON THE OTHER HAND BESIDES PLACING R ELIANCE ON THE ORDER OF THE CIT((A) HAS CONTENDED THAT THE ASSESSEE SHOULD BE THE OWNER OF THE PROPERTY AT THE TIME LIABILITY PERTAINS. SINCE THE LIABILITY RELATES TO THE EARLIER YEAR IN WHICH THE ASSESSEE WAS NOT THE OWNE R OF THE PROPERTY, THE SAME CANNOT BE ALLOWED WHILE COMPUTING ALP. 6. HAVING CAREFULLY EXAMINED THE ORDERS OF THE AUTHORITIES BELOW AND IN THE LIGHT OF THE RIVAL SUBMISSIONS, I FIND THAT UND ISPUTEDLY ASSESSEE HAS PURCHASED THE PROPERTY IN E-AUCTION AS IS WHERE IS AND AS IS WHAT IS BASIS MEANING THEREBY THE ASSESSEE PURCHASED THE PR OPERTY ALONG WITH ALL LIABILITIES ATTACHED TO IT. THEREFORE, IT IS THE RESPONSIBILITY OF THE ASSESSEE TO DISCHARGE ALL LIABILITIES ATTACHED TO THE PROPER TY AND DURING THE YEAR, THE ASSESSE HAD PAID THE MUNICIPAL TAX WITH REGARD TO T HE IMPUGNED PROPERTY, THEREFORE WHILE COMPUTING THE ALP OF THE PROPERTY, THE PAYMENT OF DEMAND BY MUNICIPALITY SHOULD BE DEDUCTED. ACCORDI NGLY, WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AO TO RE-COM PUTE THE ALP VALUE AFTER ALLOWING DEDUCTION OF PAYMENT OF MUNICIPALITY TAXES MADE BY THE ASSESSEE DURING THE IMPUGNED PREVIOUS YEAR. ACCORD INGLY, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTIC AL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ITA NO.2349/B/18 4 ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH OCT , 2018 . SD/- (SUNIL KUMAR YADAV) JUDICIAL MEMBER BANGALORE DATED : 5/10/2018 VMS COPY TO :1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER ASST. REGISTRAR, I TAT, BANGALORE ITA NO.2349/B/18 5 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT.. 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..