DCIT 1(2), MUMBAI V. KILACHAND DEVCHIND & CO. P. LTD, MUMBAI

ITA 2364/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1920 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-04-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 13-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP DAHIYA
• Assessee Lawyers: R J SHUKLA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI. BEFORE SHRI R.V.EASWAR, SR.VP AND SHRI J.SUDHAKAR R EDDY,AM I.T.A. NO.2364/MUM/2009 (ASSESSMENT YEAR: 2005-06) THE DEPUTY COMMISSIONER OF INCOME TAX, 1(2), 535, 5 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400 020. VS. M/S.KILACHAND DEVCHAND & CO. PVT. LTD., ORIENTAL HOUSE, 5 TH FLOOR, 7 J. TATA ROAD, CHURCHGATE, MUMBAI-400 020. PAN:AABCK9303Q (APPELLANT) (RESPONDENT) APPELLANT BY : MR. SANDEEP DAHIYA, DR RESPONDENT BY : MR. R.J.SHUKLA O R D E R PER R.V.EASWAR, SENIOR VICE PRESIDENT: THIS APPEAL IS BY THE REVENUE AND IT RELATES TO THE ASSESSMENT YEAR 2005 -06. THE ASSESSEE IS A PRIVATE LIMITED COMPANY TRADING IN CO TTON, CHEMICALS AND YARN AND ALSO ACTS AS COMMISSION AGEN TS. THE APPEAL ARISES OUT OF THE ASSESSMENT FRAMED UNDER SE CTION 143(3) OF THE INCOME TAX ACT BY ORDER DATED 31.12.2007. 2. THE ONLY GROUND IS THAT THE CIT(A) ERRED IN DELE TING THE ADDITION OF RS.7,57,800/- ON ACCOUNT OF RENT RECEIV ABLE FROM M/S. LALJEE GODHOO & CO. IT IS CLAIMED IN THE GROUN D THAT THE CIT(A) DID NOT KEEP IN VIEW THE FACTS PRESENTED BEF ORE THE ASSESSING OFFICER. 3. WHILE COMPLETING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THERE WERE CERTAIN D ISCREPANCIES BETWEEN THE RENTAL INCOME DECLARED BY THE ASSESSEE AND THE TDS CERTIFICATES. HE CONCLUDED THAT THE DISCREPANCI ES POINTED OUT THAT THE AGGREGATE RENTAL INCOME OF RS.27,62,85 0/- WAS NOT SHOWN IN THE RETURN OF INCOME AND ACCORDINGLY ADDE D THE SAME AS THE ASSESSEES UNDISCLOSED INCOME. ON APPEAL, TH E CIT(A) NOTED THAT THE ADDITION OF RS.27,62,850/- CONSISTED OF TWO ITA NO.2364/M/09 2 AMOUNTS I.E. RS.20,05,050/- RECEIVED FROM TWO PART IES AND RS.7,57,800/- RECEIVED FROM M/S.LALJEE GODHOO & CO. AS FAR AS THE AMOUNT OF RS.20,05,050/- IS CONCERNED, HE FOUND THAT THERE WAS NO OMISSION TO MAKE A DECLARATION OF THE SAME I N THE RETURN AND ACCORDINGLY DELETED THE ADDITION AGAINST WHICH THERE IS NO GROUND TAKEN BY THE REVENUE. THE CIT(A) ALSO NOTED THAT SO FAR AS THE AMOUNT OF RS.7,57,800/- RECEIVED AS RENT FRO M M/S.LALJEE GODHOO & CO. IS CONCERNED, THE RENTAL RE CEIPT WAS DULY ACCOUNTED FOR IN THE PROFIT AND LOSS ACCOUNT B Y THE ASSESSEE AND THE NET INCOME BY WAY OF RENT, AFTER DEDUCTING THE EXPENDITURE, WAS TAKEN TO THE RETURN OF INCOME. HE ACCORDINGLY DELETED THE ADDITION AGAINST WHICH THE REVENUE IS I N APPEAL. 4. AT THE TIME OF THE HEARING, THE LEARNED REPRESEN TATIVE FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TO THE PROFIT AND LOSS ACCOUNT AND BALANCE SHEET AND POINTED OUT THAT THER E WAS NO OMISSION TO INCLUDE THE RENTAL INCOME RECEIVED FROM M/S. LALJEE GODHOO & CO. WE FIND MERIT IN THE SUBMISSION. THE A SSESSEE HAS CREDITED OTHER INCOME OF RS.1,39,50,702/- IN TH E PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.03.2005. THE DET AILS OF THE SAME ARE SHOWN IN SCHEDULE 12 WHICH IS AT PAGE 12 O F THE PAPER BOOK. IN THIS SCHEDULE, A SUM OF RS.8,281/- HAS BE EN SHOWN AS RENTAL INCOME UNDER THE SUB-HEAD OTHER MISCELLANEO US RECEIPTS. THIS FIGURE IS PART OF THE OTHER INCOME OF RS.1,39,50,702/-. THIS NET RENTAL INCOME HAS BEEN E XPLAINED BY WAY OF A CHART AT PAGE 22 OF THE PAPER BOOK. IN THI S CHART, ALL THE RENTALS RECEIVED BY THE ASSESSEE FROM VARIOUS ENTIT IES HAVE BEEN CREDITED, AGAINST WHICH THE RENT PAID BY THE ASSESS EE HAS BEEN DEBITED. THE TOTAL RENTAL RECEIPTS OF THE ASSESSEE AS PER THIS CHART FOR THE YEAR ENDED 31.03.2005 IS RS.8,43,281/ - AGAINST WHICH THE RENT OF RS.8,35,000/- PAID FOR THE GODOW N UPTO 31.03.2005 HAS BEEN DEDUCTED AND THE NET RENTAL INC OME OF RS.8,281/- HAS BEEN TRANSFERRED TO THE PROFIT AND L OSS ACCOUNT AND TAKEN UNDER THE HEAD OTHER INCOME. INCLUDED IN THE ITA NO.2364/M/09 3 RENTAL RECEIPTS OF RS.8,43,281/- IS THE RENTAL INCO ME OF RS.7,50,000/- FROM M/S. LALJEE GODHOO & CO. AT PAG E 21 OF THE PAPER BOOK, THE ASSESSEE HAS ALSO FILED THE STATEME NT OF TDS WHICH SHOWS THAT A SUM OF RS.1,58,456/- HAS BEEN DE DUCTED BY M/S. LALJEE GODHOO & CO. AS TAX FROM THE RENT PAID TO THE ASSESSEE. IT IS THUS CLEAR FROM THE ACCOUNTS THEMS ELVES THAT THE RENTAL INCOME FROM M/S.LALJEE GODHOO & CO. HAS BEEN SHOWN IN THE PROFIT AND LOSS ACCOUNT. THE COMPUTATION OF THE INCOME (PAGE 19 OF THE PAPER BOOK) STARTS FROM THE NET PRO FIT SHOWN IN THE PROFIT AND LOSS ACCOUNT. THUS THERE IS NO DOUBT THAT THE RENTAL INCOME FROM M/S. LALJEE GODHOO & CO. HAS BE EN DECLARED IN THE ACCOUNTS AS WELL AS THE RETURN OF I NCOME. THIS IS WHAT THE CIT(A) HAS FOUND AND HIS FINDING IS BASED ON THE ACCOUNTS OF THE ASSESSEE, WHICH HAS BEEN OVERLOOKED BY THE ASSESSING OFFICER WHILE MAKING THE ADDITION. WE ACC ORDINGLY CONFIRM THE DECISION OF THE CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. ORDER PRONOUNCED ON THIS 30 TH DAY OF APRIL, 2010. SD/- (J.SUDHAKAR REDDY) SD/- ( R.V.EASWAR ) ACCOUNTANT MEMBER SENIOR VICE PRESIDENT MUMBAI, DATED 30 TH APRIL, 2010. SOMU COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-I MUMBAI. 4. THE CIT(A)-I, MUMBAI 5. THE DR A BENCH /TRUE COPY/ BY ORDE R ASSTT. REGISTRAR, I.T.A.T, MUMBAI