Mamta Kapur, New Delhi V. ACIT, Circle- 31(1), New Delhi

ITA 2743/DEL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9410 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 19-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR CHOPRA
• Assessee Lawyers: AMIT GOEL; NIPPUN MITTAL
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC BENCH, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 2743/DEL/2018 [ASSESSMENT YEAR: 2014-15] MAMTA KAPUR, VS. ACIT, CIRCLE 31(1), C-2/7, SAFDARJUNG ENCLAVE, NEW DELHI DEVELOPMENT AREA, NEW DELHI 110 016 (PAN: AHJPK4419P) [APPELLANT] [RESPONDENT] ASSESSEE BY: SH. AMIT GOEL, CA & SH. NIPPUN MITTAL, CA REVENUE BY : SH. MANOJ KUMAR CHOPRA, SR . DR. ORDER THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX [APPEALS]-21, NEW DELHI DATED 21.03.2018 PERTAINING TO ASSESSMENT YEAR 2014-15 ON THE FOLLOW ING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) ERRED IN CONFIRMING ACTION OF THE AO OF DENIAL DEDUCTION OF AMOUNT OF RS. 25,98,622/- PAID TO MUN ICIPAL CORPORATION OF DELHI. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) ERRED IN CONFIRMING ADDITION OF RS. 18,1 9,035/- MADE BY THE AO UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE APPELLANT CRAVES LEAVE TO ADD ONE OR MORE GROUN D FO APPEAL OR TO ALTER/ MODIFY THE EXISTING GROUND BEFO RE OR AT THE TIME OF HEARING OF APPEAL. THE AFORESAID GROUNDS OF APPEAL ARE WITHOUT PREJUDI CE TO EACH OTHER. 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS HAVING 25% SHARE IN PROPERTY AT B-1-I/2, MOHAN COOPERATIVE IND USTRIAL ESTATE, MATHURA ROAD, NEW DELHI WHICH HAS BEEN GIVEN ON REN T TO MAX BUPA HEALTH INSURANCE COMPANY LTD. WHILE COMPUTING THE I NCOME FROM THIS PROPERTY UNDER THE HEAD INCOME FROM HOUSE PROPERTY, THE ASSESSEE HAS DEDUCTED A SUM OF RS. 27,37,851/- TOWARDS TAX PAID TO THE LOCAL AUTHORITIES FOR THIS PROPERTY. THE AO ASKED THE ASS ESSEE TO FURNISH THE EVIDENCE IN RESPECT OF THIS PAYMENT. THE AR OF THE ASSESSEE FURNISHED THE EVIDENCE FOR PAYMENT OF PROPERTY TAX AMOUNTING TO R S. 1,39,229/- AND FOR THE BALANCE AMOUNT, THE ASSESSEE FURNISHED THE COPY OF THE, CHEQUE OF RS. 25,98,622/- ISSUED IN FAVOUR OF THE COMMISSIONE R, SOUTH DELHI MUNICIPAL CORPORATION AND SUBMITTED THAT THE PAYMEN T RECEIPT WAS NOT AVAILABLE AT THAT TIME. THE AO HAS DISALLOWED THIS SUM OF RS. 25,98,622/- WHILE COMPUTING INCOME UNDER THE HEAD INCOME FROM H OUSE PROPERTY AND HAS MADE AN ADDITION OF RS. 18,19,035/- AFTER ALLOW ING STANDARD DEDUCTION @ 30% AND COMPLETED THE ASSESSMENT AT RS. 41,52,670/- U/S. 143(3) OF THE I.T. ACT, 1961 VIDE ORDER DATED 21.12.2016. AGAINST THE ASSESSMENT ORDER, ASSESSEE APPEALED BEFORE THE LD. CIT(A) WHO VIDE HIS IMPUGNED ORDER DATED 21.3.2018 HAS DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED WITH THE IMPUGNED ORDER DATED 2 1.3.2018, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. DURING THE HEARING, LD. AR OF THE ASSESSEE HAS S UBMITTED THAT THE LD. CIT(A) HAS GONE WRONG ON FACTS. THE PAYMENT MAD E TO SOUTH DELHI MUNICIPAL CORPORATION WAS NOT FOR CONVERSION FROM L EASEHOLD TO FREEHOLD. THE AMOUNT PAID WAS IN THE NATURE OF TAX CHARGES LE VIED BY THE MUNICIPALITY IN RESPECT OF THE PROPERTY FOR RENTING IT OUT FOR COMMERCIAL USE. THE LD. AR HAS ALSO REFERRED TO PROVISIONS OF PROVISO TO SECTION 23 TO CONTEND THAT WHAT IS ALLOWED TO BE DEDUCTED IS TAXE S LEVIED BY ANY LOCAL AUTHORITY IN RESPECT OF THE PROPERTY. THE LD. AR HA S FURTHER CONTENDED THAT THE DEDUCTION IS NOT CONFINED TO PROPERTY TAX. THE DEDUCTION IS AVAILABLE IN RESPECT OF TAXES LEVIED IN RESPECT OF THE PROPERTY. THE TAXES LEVIED MAY BE CALLED BY WHATEVER NAME BE IT HOUSE T AX OR PROPERTY TAX OR 3 MUNICIPAL TAX OR RATES OR CHARGES OR FEES. TO SUPPO RT HIS CONTENTION, HE HAS RELIED UPON DECISION OF COORDINATE BENCH OF IT AT, DELHI IN CASE OF DCIT V HALDIRAM PRODUCTS PRIVATE LIMITED (ITA NO. 5 158/DEL/2012) WHEREIN, IT WAS HELD THAT CONVERSION CHARGES WERE IN THE NATURE OF MUNICIPAL TAXES. THE LD. AR HAS ALSO SUBMITTED THAT THE ISSUE IS NO MORE DEBATABLE AS THE AO HAS HIMSELF ALLOWED THE DEDUCTI ON OF SIMILAR EXPENSES IN THE ASSESSMENT MADE U/S. 143(3) OF THE ACT FOR THE SUBSEQUENT YEAR I.E. AY. 2015-16 BY FILING THE COPY OF THE ASSESSMENT ORDER DATED 08.12.2017. ACCORDINGLY, HE SUBMITTED T HAT THE DEDUCTION SHOULD BE ALLOWED FOR THIS YEAR ALSO. 4. ON THE OTHER HAND, THE LD. DR RELIED UPON THE O RDERS OF AUTHORITIES BELOW AND DID NOT REFER ANY CONTRARY DECISION WHICH CONTROVERTS THE AFORESAID CONTENTION OF THE LD. COUNSEL FOR THE ASS ESSEE. 5. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES, ASSESSMENT ORDER DATED 8.12.2017 PASSED IN THE CASE OF THE ASSESSEE FOR THE AY 2015- 16 U/S. 143(3) AS WELL AS ITAT, DELHI C BENCH DECISION DATED 08.2.2013 P ASSED IN THE CASE OF DCIT VS. HALDIRAM PRODUCTS PVT. LTD. PASSED IN IT A NO. 5158/DEL/2012 (AY 2008-09). I NOTE THAT AO HAS MADE NET DISALLOW ANCE OF RS. 18,19,035/- IN RESPECT OF PAYMENT MADE TO SOUTH DELHI MUNICIPAL CORPORATION IN RELATION TO THE PROPERTY LET OUT BY THE ASSESSEE. IT IS FURTHER NOTED THAT THE AO MADE THE DISALLOWANCE BE CAUSE THE RECEIPT ISSUED BY SOUTH DELHI MUNICIPAL CORPORATION WAS NOT AVAILABLE NOT AVAILABLE AND / OR MISPLACED BY THE ASSESSEE AND T HE DUPLICATE RECEIPT COULD NOT BE RECEIVED TILL THE COMPLETION OF ASSESS MENT PROCEEDINGS THOUGH THE ASSESSEE FURNISHED THE PROOF OF PAYMENT BY WAY OF BANK STATEMENT AND BANK CERTIFICATE. HOWEVER, THE DUPLIC ATE RECEIPT WAS RECEIVED DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE LD. CIT(A) AND THE SAME WAS FURNISHED BEFORE HIM. I FURTHER NOTE T HAT COORDINATE BENCH OF ITAT, DELHI IN CASE OF DCIT V HALDIRAM PRODUCTS PRIVATE LIMITED DECIDED IN ITA NO. 5158/DE1/2012 VIDE ITS ORDER DATED 08.2. 2013 HAS HELD THAT CONVERSION CHARGES WERE IN THE NATURE OF MUNICIPAL TAXES. AS PER 4 PROVISIONS OF SECTION 23 OF THE INCOME TAX ACT, 196 1, DEDUCTION OF TAXES LEVIED BY ANY LOCAL MUNICIPALITY IN RESPECT OF THE LET OUT PROPERTY IS ALLOWABLE DEDUCTION. IN THE SCRUTINY ASSESSMENT MAD E IN THE CASE OF THE ASSESSEE FOR THE SUBSEQUENT ASSESSMENT YEAR I.E. AY . 2015-16, THE AO VIDE HIS ORDER DATED 08.12.2017 HAS HIMSELF ALLOWED THE DEDUCTION OF SIMILAR EXPENSES. HENCE, THE ADDITION IN DISPUTE IS NOT SUSTAINABLE IN THE EYES OF LAW. ACCORDINGLY, I DIRECT THE AO TO ALLO W THE DEDUCTION IN DISPUTE BY DELETING THE ADDITION OF RS. 18,19,035/- MADE IN THE HANDS OF THE ASSESSEE. ACCORDINGLY, THE GROUND NO. 1 & 2 RAI SED BY THE ASSESSEE ARE ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THE ORDER PRONOUNCED ON 09.01.2020. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATED:09-01-2020 SRB COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) ASST. REGISTRAR, 5. DR ITAT, NEW DELHI