Sh. Rup Lal Jalota, Phagwara V. The Dy. Commissioner of Income-tax, Phagwara

ITA 276/ASR/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2215 (ITAT-AMRITSAR)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 28-03-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 15-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: Y K SUD
• Keywords: Difference of opinion
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.276(ASR)/2012 ASSESSMENT YEAR:2004-05 PAN :AAMPJ1147K SHRI RUP LAL JALOTA VS. DY.COMMR. OF INCOME TAX, C/O SAURABH SOOD ADVOCATE, CIRCLE PHAGAWARA. SINGLA MARKET, PHAGWARA. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. Y.K. SUD, CA RESPONDENT BY:SH.TARSEM LAL, DR DATE OF HEARING: 22/04/2013 DATE OF PRONOUNCEMENT:22/04/2013 ORDER PER BENCH ; THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE CIT(A), JALANDHAR, DATED 15.03.2012 FOR THE ASSESSMENT YEAR 2004-05. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOL DING PENALTY @ 100% OUT OF 200% PENALTY IMPOSED BY THE A.O. AMOUN TING TO RS.51,000/-. 2. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN PASSIN G THE ORDER WITHOUT PROPERLY SERVING THE NOTICE OF HEARING OF APPEAL ON THE ITA NO.276(ASR)/2012 2 ASSESSEE THEREBY NOT GIVING THE ASSESSEE AN OPPORT UNITY TO REPRESENT HIS APPEAL. 3. THAT THE LD. CIT(A) FAILED TO APPRECIATE THAT A T THE TIME OF PASSING THE APPELLATE ORDER THE QUANTUM APPEAL WAS PENDING BEFORE HIM WHICH HE SUBSEQUENTLY DECIDED IN FAVOUR OF THE ASSESSEE. 4. THAT THE ORDER OF THE CIT IS AGAINST THE LAW AN D FACTS OF THE CASE. 2. THE BRIEF FACTS ARE THAT THE ASSESSEE WAS FOUND TO HAVE CLAIMED EXCESSIVE DEDUCTION OF RS.85,000/- AGAINST INCOME F ROM HOUSE PROPERTY. IN THE PENALTY PROCEEDINGS THE ASSESSEE HAD SUBMITTED THAT THE DEDUCTION OF RS.85,000/- HAD BEEN CLAIMED ON ACCOUNT OF PAYMENT MADE TOWARDS PARKING 3 CARS BY THE ASSESSEE. IT WAS CONTENDED THAT THE RENT RECEIVED WAS INCLUSIVE OF RENT FOR SPACE FOR 3 CARS PARKING AND THE SAME C OULD BE APPORTIONED BETWEEN THE RENT FOR BUILDING AND RENT FOR CAR PARK ING. IT WAS CONTENDED THAT THE ACTUAL RENT RECEIVED FOR BUILDING WAS RS.10,23, 800/- AND THAT THE SUM OF RS.85,000/- HAD BEEN SPENT BY THE ASSESSEE TO MANAG E HIRING OF CAR SPACES FOR TENANTS. IT WAS CONTENDED BY THE ASSESSEE THAT IT COULD NOT BE SAID THAT ANY PARTICULAR HAD NOT BEEN DISCLOSED BY THE ASSESS EE AND INACCURATE PARTICULARS HAD BEEN SUBMITTED BECAUSE THE ADDITION MADE IN THE ASSESSMENT ORDER WAS AS A RESULT OF DIFFERENCE OF OPINION ON THE RENT PAID ON PARKING OF CAR AND NO PENALTY COULD BE LEVIED IN RESPECT OF DI FFERENCE OF OPINION. THE AO DID NOT AGREE WITH THE ASSESSEE. HE NOTED THAT T HE ADDITION HAD BEEN CONFIRMED BY THE LD. CIT(A) IN HIS ORDER DATED 10.1 0.2008 IN WHICH IT WAS ITA NO.276(ASR)/2012 3 NOTED THAT THE RENT RECEIVED BY THE ASSESSEE WAS I N RESPECT OF FLAT NO.308, KAILASH BUILDING , 26KG MARKET, NEW DELHI AND THAT THE DEDUCTIONS ALLOWABLE AGAINST THE ANNUAL VALUE HAD BEEN SPECIFI ED IN SECTIONS 23 AND 24 OF THE ACT. NO DEDUCTIONS OTHER THAN THOSE SPECIFIE D WERE PERMISSIBLE. THE AO HAS HELD THAT IT WAS CLEAR THAT THE ADDITION WAS NOT ON ACCOUNT OF DIFFERENCE OF OPINION BUT ON ACCOUNT OF PROVISIONS OF LAW. HENCE, HE IMPOSED THE IMPUGNED PENALTY. 3. THE LD. CIT(A), CONFIRMED THE ACTION OF THE ASSE SSING OFFICER. 4. THE LD. COUNSEL FOR THE ASSESSEE, MR. Y.K. SUD, CA ARGUED THAT THE MATTER IN THE FIRST ROUND IN QUANTUM WAS DECIDED B Y THE LD. CIT(A), JALANDHAR, VIDE ORDER DATED 10.10.2008 AGAINST WHIC H THE ASSESSEE FILED THE APPEAL BEFORE THE ITAT, AMRITSAR BENCH, WHICH HAD S ET ASIDE THE MATTER TO THE FILE OF THE LD. CIT(A) VIDE ORDER DATED 05.10.2 009 IN ITA NO.284(ASR)/2009 TO DECIDE THE MATTER AFRESH IN VIE W OF THE DECISION OF ITAT, AHMEDABAD BENCH IN THE CASE OF J.B.PATEL AND CO. VS. DCIT REPORTED IN 312 ITR (AT) 171 AFTER GIVING OPPORTUNI TY TO THE ASSESSEE. THE LD. CIT(A) IN THE SET ASIDE PROCEEDINGS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND DELETED THE QUANTUM ADDITION VIDE ORDE R DATED 26.04.2012, A COPY OF THE SAME WAS PLACED ON RECORD. MR. Y.K.SUD , CA THE LD. COUNSEL FOR THE ASSESSEE, FURTHER ARGUED THAT PENALTY PROCEEDIN GS HAD BEEN DECIDED BY ITA NO.276(ASR)/2012 4 THE LD. CIT(A), JALANDHAR, VIDE HIS ORDER DATED 15. 03.2012 EARLIER THAN THE ORDER OF THE LD. CIT(A) JALANDHAR DATED 26.04.2012 FOR DELETION OF QUANTUM IN SET ASIDE PROCEEDINGS. NOW THE QUANTUM HAVING B EEN DELETED BY THE LD. CIT(A) THEN THE PENALTY HAS NO LEGS TO STAND AND TH EREFORE, SH.Y.K.SUD, CA PRAYED TO SET ASIDE THE PENALTY CONFIRMED BY THE LD . CIT(A) VIDE HIS ORDER DATED 15.03.2012. 5. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE O RDERS OF BOTH THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. AS PER THE FACTS MENTIONED HEREINABOVE, THE A SSESSEE WAS FOUND TO HAVE CLAIMED EXCESSIVE DEDUCTION OF RS.85,000/- AGA INST INCOME FROM HOUSE PROPERTY FOR WHICH THE ADDITION WAS MADE BY THE A.O . VIDE ORDER DATED 25.08.2006 PASSED U/S 143(3) OF THE ACT. PENALTY P ROCEEDINGS U/S 271(1)(C) WERE INITIATED AND SHOW CAUSE NOTICE DATED 25.08.20 06 WAS ISSUED TO THE ASSESSEE. THE ASSESSEE SUBMITTED THE EXPLANATION W HICH DID NOT FIND FAVOUR TO THE A.O. AND THE A.O. IMPOSED A PENALTY @ 200% A T RS.51,000/- ON THE ASSESSEE VIDE ORDER DATED 18.03.2009. AGAINST THE S AID ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO CONF IRMED THE ACTION OF THE A.O. VIDE ORDER DATED 15.03.2012. ITA NO.276(ASR)/2012 5 6.1. IN THE MEANTIME, THE ASSESSEE PREFERRED AN APP EAL AGAINST THE ORDER OF THE LD. CIT(A) DATED 10.10.2008 IN QUANTUM PROCE EDINGS BEFORE THE ITAT, AMRITSAR BENCH, WHO SET ASIDE THE MATTER TO T HE FILE OF THE LD. CIT(A) AND THE RELEVANT PARA 5 OF THE ORDER OF ITAT, AMRIT SAR BENCH, DATED 5.10.2009 PASSED IN ITA NO.284(ASR)/2009 IS REPROD UCED FOR THE SAKE OF CLARITY AS UNDER: 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT RECORD AVAILABLE WITH US. WE HAVE ALSO GONE THROUGH THE P APER BOOK CONTAINING PAGES 1 TO 16, WHEREIN THE LD. COUNSEL FOR THE ASSESSEE HAS FILED COPY OF WRITTEN SUBMISSIONS ALONGWITH THE LE ASE AGREEMENT FILED BEFORE THE CIT(A) AND COPY OF JUDGMENT OF IT AT, AHMEDABAD BENCH, IN THE CASE OF J.B. PATEL AND CO. VS. DCIT , REPORTED IN 312 ITR (AT)171. AFTER PERUSING THE SAME, WE ARE OF TH E CONSIDERED OPINION THAT THE LD. FIRST APPELLATE AUTHORITY HAS NOT DECIDED THE ISSUE IN DISPUTE I.E. THE ISSUE RAISED IN GROUND NO.2 RE GARDING REDUCTION OF CAR PARKING COST FROM THE TOTAL RENT RECEIVED BY THE LESSOR FOR COMPUTING THE ANNUAL LETTING VALUE ( IN SHORT A.L .V.) . WE HAVE PERUSED THE IMPUGNED ORDER AND FOUND THAT THE LD. FIRST APPELLATE AUTHORITY HAS NOT PASSED A SPEAKING ORDER ON THIS ISSUE. THEREFORE, IN THE INTEREST OF JUSTICE, THE MATTER REQUIRES APPRE CIATION OF THE WRITTEN SUBMISSIONS, WHICH ARE ALREADY ON RECORD OF THE LD . CIT(A) AND THE JUDGMENT OF ITAT, AHMEDABAD BENCH, IN THE CASE OF J.B. PATEL AND CO. VS. DCIT (SUPRA). IN VIEW OF THE ABOVE, WE SE T ASIDE THE ISSUE INVOLVED IN GROUND NO.2 TO THE FILE OF THE LD. FIR ST APPELLATE AUTHORITY TO DECIDE THE SAME AFRESH UNDER THE LAW AND AS PER THE DECISION OF THE ITAT, AHMEDABAD BENCH, REPORTED IN 312 ITR (AT) 17 1 (SUPRA), AFTER GIVING OPPORTUNITY TO THE ASSESSEE. THE APPE AL OF THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.276(ASR)/2012 6 6.2. THE LD. CIT(A) IN THE SET ASIDE PROCEEDINGS AL LOWED THE CLAIM OF THE ASSESSEE VIDE PARA 5.1 & 6 OF HIS ORDER DATED 26.0 4.2012, WHICH FOR THE SAKE OF CLARITY IS REPRODUCED AS UNDER: 5.1 THUS, IN THE CASE OF J.B.PATEL VS. DCIT (SUPR A) IT HAS BEEN HELD WHILE ACCEPTING THAT DEDUCTION ON MAINTENANCE EX PENDITURE ETC. WERE NOT ALLOWABLE U/S 24 OF THE ACT THAT EXPEND ITURE INCURRED ON PROVIDING AMENITIES TO THE TENANTS, WHICH THE TENA NTS MAY OBTAIN FOR THEMSELVES IF NOT PROVIDED BY THE LANDLORD AND RED UCE THE RENT PAYABLE CORRESPONDINGLY, EFFECTIVELY IMPLIED THAT THE ANNU AL VALUE OF THE PROPERTY, I.E. THE VALUE AT WHICH THE PROPERTY IS EXPECTED TO LET FROM YEAR TO YEAR, WAS LOWER THAN THE ACTUAL RENT RECEI VED WHERE SUCH SERVICES WERE PROVIDED BY LANDLORDS. IN THE PRESEN T CASE UNDER APPEAL, THE ASSESSEE HAS SOUGHT DEDUCTION OF RS.85,000/- I N RESPECT OF AMOUNT PAID FOR PROVIDING CAR PARKING TO THE TENANTS, WHI CH HE CLAIMS WAS TO BE PROVIDED TO THE TENANTS. IN TERMS OF THE DECISI ON IN THE CASE OF J. B. PATEL VS. DCIT (SUPRA) IT IS CLEAR THAT DEDUCTION OF RS.85,000/- SHOULD BE ALLOWED TO THE ASSESSEE FROM THE ANNUAL VALUE, SINCE THE TENANTS COULD HAVE OBTAINED THE CAR PARKING THEMSELVES A ND WOULD HAVE REDUCED THE RENT PAYABLE ACCORDINGLY. THE AO IS, T HEREFORE, DIRECTED TO REDUCE THE ANNUAL VALUE OF THE PROPERTY GIVEN ON RENT BY THE ASSESSEE BY RS.85,000/- AND COMPUTE THE INCOME FR OM HOUSE PROPERTY OF THE ASSESSEE ACCORDINGLY. 6. IN THE RESULT, THE QUESTION SET-ASIDE TO THIS O FFICE BY THE HONBLE ITAT IS DECIDED IN FAVOUR OF THE ASSESSEE. 6.3. IT IS A MATTER OF FACT THAT PENALTY ORDER PASS ED BY THE LD. CIT(A), JALANDHAR ON 15.03.2012, IS AN EX-PARTE ORDER, IS E ARLIER THAN THE ORDER OF THE LD. CIT(A), JALANDHAR DATED 26.04.2012 IN THE SET A SIDE PROCEEDINGS BY THE ITAT, AMRITSAR BENCH, WHERE THE LD. CIT(A), JALANDH AR VIDE HIS ORDER DATED 26.04.2012 HAS DELETED THE ADDITION OF RS.85,000/- AND THE DECIDED THE APPEAL IN FAVOUR OF THE ASSESSEE AND THERE IS NO AP PEAL REPORTED BY THE ITA NO.276(ASR)/2012 7 REVENUE AGAINST THE SAID DECISION OF LD. CIT(A) IN VIEW OF CLARIFICATION SOUGHT BY THE BENCH. THEREFORE, THE SAID ORDER OF T HE LD. CIT(A), JALANDHAR, DATED 26.04.2012 HAVING BEEN PASSED AFTER THE PENA LTY ORDER DATED 15.03.2012, THE FACT REMAINS THAT THE QUANTUM HAVIN G BEEN DELETED THEN THE PENALTY DOES NOT HAVE ANY LEGS TO STAND AND, THEREF ORE, NO PENALTY CAN BE SUSTAINED ON THE ASSESSEE ON THE ISSUE BEFORE US. A CCORDINGLY, PENALTY SO LEVIED BY THE LD. CIT(A) IS DIRECTED TO BE CANCELLE D. THUS, ALL THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.276(ASR)/2012 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22ND APRIL, 2013. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22ND APRIL, 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. RUP LAL JALOTA, PHAGWARA. 2. THE DCIT, CIRCLE PHAGWARA. 3. THE CIT(A), JLR. 4. THE CIT, JLR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) ITA NO.276(ASR)/2012 8 INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.