RARE ROSE PREMSIES P. LTD, MUMBAI V. ITO 7(2)(1), MUMBAI

ITA 2844/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2366 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 28-07-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 13-05-2015
• Court: TRIBUNAL
• Assessee Lawyers: FORAM PAREKH

Judgement Text

, . . , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA , A CCOUNTANT MEMBER ./ ITA NO . 2844 /MUM /20 1 5 ( / ASSESSMENT YEAR : 200 7 - 200 8 ) RARE ROSE PR EMISES PRIVATE LIMITED, PENINSULA CHAMBERS, 5 TH FLOOR, PENINSULA CORPORATE PARK, GANPATRAO KADAM MARG, LOWER PAREL, MUMBAI - 400013 VS. ITO - 7(2)(1), MUMBAI ./ ./ PAN/GIR NO. : A A BCR 7389 F ( / APPELLANT ) .. ( / RESPO NDENT ) /ASSESSEE BY : MS. FORAM PAREKH /REVENUE BY : SHRI ABHISHEK SHARMA / DATE OF HEARING : 28 / 0 7 /2016 / DATE OF PRONOUNCEMENT 29/07 /201 6 / O R D E R TH IS IS A N APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) FOR ASSESSMENT YEAR 2007 - 08, WHEREIN THE ASSESSEE IS AGGRIEVED FOR DISALLOWANCE OF RS.55,908/ - BEING ORDINARY EXPENSES INCURRED FOR RUNNING AND MAINTENANCE OF THE COMPANY. 2. AT THE OUTSET, LD. AR PLACED ON RECORD ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2008 - 09, DATED 10 - 5 - 2013, WHEREIN EXACTLY SIMILAR ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE AFTER HAVING THE FOLLOWING OBSERVATION : - AS REGARDS THE ISSUE RAISED IN GRO UND NO. 2, THE ID. COUNSEL FOR THE ASSESSEE HAS SUBMITTED BEFORE US THAT THE EXPENSES IN QUESTION WERE INCURRED BY THE ASSESSEE TO COMPLY WITH THE STATUTORY REQUIREMENTS AS THE ASSESSEE IS A PRIVATE LIMITED COMPANY. HE HAS CONTENDED THAT THE EXPENSES SO IN CURRED WERE VERY .MINIMAL TO RUN ANY CORPORATE BODY AND AS THE SAME WERE INCURRED FOR THE PURPOSE OF BUSINESS, THEY ARE ALLOWABLE AS DEDUCTION UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR 'PROFESSION'. WE FIND MERIT IN ITA NO. 2844/2015 2 THIS CONTENTION OF THE ID. COUNSE L FOR THE ASSESSEE IN VIEW OF THE FACT THAT THE BUSINESS OF THE ASSESSEE COMPANY IS THAT OF LETTING OUT PROPERTIES OWNED BY IT AND THE SAME WAS VERY MUCH CARRIED ON IN THE YE AR UNDER CONSIDERATION. NO DOUBT, THE INCOME FROM LETTING OUT IS CHARGEABLE TO TAX UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY AS PER THE SPECIFIC PROVISIONS CONTAINED IN THE INCOME T AX ACT BUT THE FACT REMAINS THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS DURING THE YEAR UNDER CONSIDERATION IN ITS CAPACITY AS PRIVATE LIMITED COMPANY AN D THE EXPENSES INCURRED TO MAINTAIN ITS STATUS AS A COMPANY AND TO COMPLY WITH THE STATUTORY REQUIREMENTS WERE WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE . SAID. BUSINESS. WE ARE THEREFORE OF THE. VIEW THAT THE EXPENSES INCURRED BY THE ASSESSEE TO MAINT AIN AND RUN THE CORPORATE BODY ARE ALLOWABLE AS DEDUCTION UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' AS CLAIMED BY THE ASSESSEE. IN THAT VIEW OF THE MATTER, WE DELETE THE DISALLOWANCE MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) AND ALL OW GROUND NO.2 OF THE ASSESSEES APPEAL. 3. I HAD CAREFULLY GONE THROUGH THE ORDERS OF THE TRIBUNAL AS WELL AS ORDERS OF THE LOWER AUTHORITIES DURING THE YEAR UNDER CONSIDERATION. AS THE FACTS AND CIRCUMSTANCES ARE EXACTLY SIMILAR, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, GROUNDS TAKEN BY THE ASSESSEE IS ALLOWED. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . O RDER PRONOUNCED IN THE OPEN COURT ON THIS 29/07 / 201 6 . SD/ - ( R.C.SHARMA ) / ACCOUNTANT MEMBER MUMBAI ; DATED 29/07 /201 6 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//