DCIT, Haldwani V. Krishi Utpadan Mandi Samiti, Haldwani

ITA 2966/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9733 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2009
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 25-09-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 22-09-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: H K LAL
• Keywords: Business income; Depreciation; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `D : NEW DELHI) BEFORE SHRI D.R. SINGH, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.2966/DEL./2008 (ASSESSMENT YEAR : 2003-04) DCIT, HALDWANI. VS. M/S KRISHI UTPADAN MANDI SAMI T, HALDWANI (PAN/GIR NO. N. A.) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE (POD ON RECORD) REVENUE BY : SHRI H.K. LAL, SR.DR ORDER PER A.K. GARODIA: AM THIS IS A REVENUES APPEAL DIRECTED AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, DEHRADUN, DATED 10.07.2006 FOR ASSESSMENT YEAR 2003-04. THE ONLY GROUND RAISED BY THE REVENUE READS AS UNDER: LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETI NG THE ADDITION OF RS.29,00,578/- HOLDING THE RENTAL INCOME FROM SHOPS GODOWN ETC. AS BUSINESS INCOME IGNORING THAT ASSESSEE HAS NOT SUBMITTED THE DESIRED INFORMATION DURING ASSESSMENT PROCEEDINGS AND ALSO IGNORING THAT THESE SHOPS GODOWN ETC. WERE ALLOTTED TO DIFFERENT PERSON UNDER SELF FINANCING S CHEME ON HIRE PURCHASE BASIS, WHICH IS EVIDENT FROM THE FINDING OF THE A.O. FOR A .Y. 2005-06. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPITE OF NOTICE SERVED ON THE ASSESSEE AS PER THE ACKNOWLEDGEMENT AVAILABLE ON RECORD AND, HENCE WE PROCEED TO DECIDE THIS APPEAL OF THE REVENUE EX-PARTE QUA-THE-ASSESSEE. 3. BRIEFLY STATED, THE FACTS ARE THAT IT IS NOTED B Y THE ASSESSING OFFICER ON PAGE NO.2 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAS GIVEN CHABUTRA, WALLS, SHOPS, GODOWNS ETC. ON RENT AND INCOME FROM RENT GODOWN/CANTEENS HAS BE EN DECLARED AT RS.29,22,030. THE ASSESSING OFFICER FURTHER STATED THAT THIS INCOME I S ASSESSABLE AS INCOME FROM HOUSE PROPERTY AND NOT BUSINESS INCOME AND, HENCE DEPRECI ATION ON BUILDING AND OTHER ASETS IS I.T.A. NO.2966/DEL./2008 (A.Y. : 2003-04) 2 NOT ALLOWABLE DEDUCTION. IN THIS CASE, THE ASSESSI NG OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE REGARDING DEPRECIATION TO THE EXTENT OF RS .29,00,578. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS). THE COMMISSI ONER OF INCOME-TAX (APPEALS) HAS DELETED THIS DISALLOWANCE ON THE BASIS THAT IN HIS VIEW, THE SHOPS, GODOWN, CHABUTRA, BELONGING TO THE ASSESSEE CONSTITUTE BUSINESS ASSET OF THE ASSESSEE AND ANY INCOME ARISING OUT OF THE LETTING OUT OF SAID ASSETS IN THE COURSE OF BUSINESS CONSTITUTE BUSINESS OF THE ASSESSEE AND, HENCE DEPRECIATION IS ALLOWABLE BECAU SE THE ASSESSEE HAS NOT CLAIMED ANY STANDARD DEDUCTION U/S 24 OF THE ACT OUT OF THE REN TAL INCOME. NOW, THE REVENUE IS IN APPEAL BEFORE US. 5. LD.DR OF THE REVENUE SUPPORTED THE ASSESSMENT O RDER. 6. WE HAVE CONSIDERED THE SUBMISSION OF THE LD.DR O F THE REVENUE AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FI ND THAT NO BASIS IS GIVEN BY THE COMMISSIONER OF INCOME-TAX (APPEALS) IN HOLDING THA T THE RENTAL INCOME IN THE PRESENT CASE IS ASSESSABLE AS BUSINESS INCOME. THE REASONI NG GIVEN BY THE COMMISSIONER OF INCOME-TAX (APPEALS) THAT THE ASSESSEE HAS NOT CALM ED ANY STANDARD DEDUCTION U/S 24 OUT OF RENTAL INCOME IS NOT A BASIS TO HOLD THAT THE IN COME IN QUESTION IS BUSINESS INCOME. IN THIS REGARD, WE ARE OF THE OPINION THAT THE ASSESSE E DESERVES TO BE ALLOWED DEDUCTION ALLOWABLE TO THE ASSESSEE U/S 24 OF THE ACT AGAINST THE RENTAL INCOME ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY, BUT DEDUCTION CANN OT BE ALLOWED ON ACCOUNT OF DEPRECIATION. WE HOLD ACCORDINGLY AND DIRECT THE A SSESSING OFFICER TO ALLOW DEDUCTION TO THE ASSESSEE U/S 24 AND WE SET ASIDE THE ORDER OF T HE COMMISSIONER OF INCOME-TAX (APPEALS) REGARDING HIS DIRECTION TO THE ASSESSING OFFICER IN ALLOWING THE DEPRECIATION. 7. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS PARTLY ALLOWED. 8. ORDER PRONOUNCED IN OPEN COURT ON 11.09.2009. (D.R. SINGH ) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: SEPT. 11 , 2009. *SKB* I.T.A. NO.2966/DEL./2008 (A.Y. : 2003-04) 3 COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A), DEHRADUN. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT