Ashiyana Project Pvt. Ltd., Howrah V. ITO, Ward - 1(2), Kolkata, Kolkata

ITA 271/KOL/2012

• Counselvise Citation: 27123514 RSA 2012
• Duration Of Justice: 2 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2014
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 06-06-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 17-02-2012
• Court: TRIBUNAL
• Department Lawyers: MADHU MALTI GHOSH JCITSR
• Assessee Lawyers: S K BASU LD AR
• Keywords: Business income; Opportunity of being heard; Principle of natural justice

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH: KO LKATA ( ) , 1 , BEFORE HONBLE HONBLE SRI SHAMIM YAHYA, AM & HON BLE SRI GEORGE MATHAN, JM ITA NO. 271/KOL/2012 A.Y 2006-07 M/S. ASHIYANA PROJECT PVT. LTD PAN: AAECA 1654K - - - VERSUS -. I.T.O WARD 1(2), KOLKATA ( $ / APPELLANT ) ( %&$ / RESPONDENT ) $ / FOR THE APPELLANT/ SHRI S.K. BASU, LD. AR %&$ / FOR THE RESPONDENT/: SMT. MADHU MALTI GHOSH, JCIT/SR.DR * + /DATE OF HEARING: 17-07-2014 * + /DATE OF PRONOUNCEMENT: 5-08-2014 / ORDER , SHRI SHAMIM YAHYA, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), I, KOLKATA DATED 02.12.2011 PERTAI NING TO ASSESSMENT YEAR 2006-07. 2. GROUNDS OF APPEAL READ AS UNDER:- (1) FOR THAT THE ORDER IS ARBITRARY, ILLEGAL FAR FROM THE NATURAL JUSTICE. (2) FOR THAT THE EXPENDITURE I.E. CONNECTED WITH THE EXISTENCE OF THE COMPANY LIKE AUDIT FEES, ROC FEES WAS NOT CONSIDER ED. (3) FOR THAT THE DEFINITION OF RENT UNDER SECTION 1 94 I WAS NOT CONSIDERED. (4) FOR THAT THE ASSESSEE EARNING INCOME FROM THE G ODOWN WAS TREATED AS RENTAL INCOME INSTEAD OF BUSINESS INCOME IN A W RONG WAY. (5) FOR THAT THE ASSESSEE FOLLOWING THE SAME ACCO UNTING AND RETURN WAS FILED AS A BUSINESS INCOME AS IN EARLIER YEARS WAS NOT CONSIDERED. (6) FOR THAT THE ADDITION OF RS.6,41,882/- TO BE DE LETED SINCE THE EXPENDITURE CLAIMED IN BUSINESS ACCOUNT WAS NOT DISPUTED. (7) FOR THAT YOUR PETITIONS CRAVES LEAVE TO ADVANC E ANY GROUND OR GROUNDS DURING THE COURSE OF HEARING. . ITA NO. 271/KOL/ 2012-C-AM M/S. ASHIYANA PROJECT PVT. LTD 2 3. IN THIS CASE ON SCRUTINY OF ASSESSEES RETURN THE AO NOTED THAT NATURE OF RECEIPT MENTIONED IN THE RETURN WAS RENT, WHICH THE ASSESSEE HAS CLAIMED AS BUSINESS INCOME. THE AO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE CONCLUDED THAT THE ASS ESSEE WAS DEEMED OWNER OF THE PROPERTY AND THE RECEIPT WILL BE TREATED AS RENT. AGAINST WHICH, TH E AO ALLOWED 30% DEDUCTION U/S. 24(A) OF THE IT A CT 1961. 4. AGAINST THE ABOVE ORDER, THE ASSESSEE WENT IN AP PEAL BEFORE THE LD.CIT(A). THE LD. CIT(A) UPHELD THE ACTION OF THE AO. 5. BEFORE US THE LD. COUNSEL OF THE ASSESSEE HAS SU BMITTED THAT THE ASSESSSEE HAS ACTUALLY SUB-LET THE SAID PROPERTY AND EARNED ONLY INCOME FROM SUB- LETTING OF THE PROPERTY. IN THIS REGARD, HE HAS REFERRED TO THE PROVISIONS OF THE I.T ACT 1961 AND SUBMITTED THAT INCOME FROM SUB-LETTING OF PROPERTY SHOULD BE TREATED AS INCOME FROM OTHER SOURCES. HE FURTHER CLAIMED THAT ALL THE NECESSARY EXPENSES INCURRED FOR EARNING THE INCOME FROM OTHER SOURCES SHOULD BE ALLOWED AS PER THE MANDATE OF THE I.T ACT, 1961. HENCE, HE SUBMITTED THAT THE EXPENSES CL AIMED BY THE ASSESSEE SHOULD BE ALLOWED. 6. THE LD. DR, ON THE OTHER HAND, HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORD. UPON CAREFUL CONSIDERATION, WE FIND THAT THE ISSUE NEEDS TO BE REFERRED BACK TO THE FI LE OF THE AO. ACCORDINGLY, WE HOLD THAT THE AO SHAL L EXAMINE THE CLAIM OF THE ASSESSEE AS PER PROVISION S OF THE I.T ACT 1961 THAT THE INCOME FROM SUB- LETTING OF THE PROPERTY IS TO BE CONSIDERED UNDER THE HEAD INCOME FROM OTHER SOURCES. ACCORDINGLY , EXPENDITURE RELATED TO EARNING OF THE SAID INCOME ALSO HAVE TO BE CONSIDERED. NEEDLESS TO ADD ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESS EE STANDS ALLOWED FOR STATISTICAL PURPOSE. . THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT 5 /08/2014 SD/- SD/- ( 1 , ) ( , ) ( GEORGE MATHANH, JUDICIAL MEMBER ) ( SHAMIM YAHYA, ACCOUNTANT MEMBER ) ( + + + + ) DATE 5/08/2014 ITA NO. 271/KOL/ 2012-C-AM M/S. ASHIYANA PROJECT PVT. LTD 3 ** PRADIP SPS * %1 21 / COPY OF THE ORDER FORWARDED TO: 1. $ /APPELLANT- M/S. ASHIYANA PROJECT PVT. LTD. 103, FORESHORE ROAD, HOWRAH-711102. 2 %&$ / RESPONDENT : I.T.O W 1(2), AAYKAR BHAWAN, 7 TH FL., P-7 CHOWRINGHEE SQ., KOL-69. 3. / THE CIT, 4. ( )/ THE CIT(A), KOLKATA 5. % / DR, KOLKATA BENCHES, KOLKATA &1 % / TRUE COPY, / BY ORDER, /ASSTT. REGISTRAR