Loudon Properties (P) Ltd., Kolkata V. ITO, WD-6(2), KOLKATA, Kolkata

ITA 311/KOL/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4968 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2003-2004
• Appeal Filed On: 29-02-2016
• Court: TRIBUNAL
• Department Lawyers: MD GHAYAS UDDIN
• Assessee Lawyers: K M ROY
• Keywords: Opportunity of being heard
• Section: 143(3); 147

Judgement Text

I.T.A. NOS. 311, 312 & 313/KOL./2016 ASSESSMENT YEAR: 2003-2004, 2004-2005 & 2005-2006 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NOS. 311, 312 & 313 /KOL/ 2016 ASSESSMENT YEARS: 2003-2004, 2004-2005 & 2005-2006 LOUDON PROPERTIES (P) LIMITED,..................... ................APPELLANT 6/7A, A.J.C. BOSE ROAD, KOLKATA-700 017 [PAN : AAACL 9033 F] -VS.- INCOME TAX OFFICER,................................ ...........................RESPONDENT WARD-6(2), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 APPEARANCES BY: SHRI K.M. ROY, C.A., FOR THE ASSESSEE MD. GHAYAS UDDIN, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : APRIL 28, 2016 DATE OF PRONOUNCING THE ORDER : APRIL 29, 2016 O R D E R THESE THREE APPEALS FILED BY THE ASSESESE AGAINST T HREE SEPARATE ORDERS ALL DATED 20.01.2016 PASSED BY THE LD. COMMI SSIONER OF INCOME TAX (APPEALS)-17, KOLKATA INVOLVE A COMMON ISSUE AN D THE SAME, THEREFORE, HAVE BEEN HEARD TOGETHER AND ARE BEING D ISPOSED OF BY A SINGLE CONSOLIDATED ORDER. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY. D URING THE YEARS UNDER CONSIDERATION, IT HAD TAKEN HOUSE PROPERTY SI TUATED AT 24, PARK STREET, KOLKATA ON A LONG-TERM LEASE FROM MRS. MALL IKA JALAN AND THE SAME WAS GIVEN ON RENT TO DEVELOPMENT CONSULTANTS LIMITE D. THE RENT RECEIVED FOR THE SAID PROPERTY WAS DECLARED BY THE ASSESSEE UNDER THE HEAD PROFITS AND GAINS FROM BUSINESS OR PROFESSION AND AFTER CLAIMING VARIOUS I.T.A. NOS. 311, 312 & 313/KOL./2016 ASSESSMENT YEAR: 2003-2004, 2004-2005 & 2005-2006 PAGE 2 OF 5 EXPENSES AGAINST THE SAME, TOTAL INCOME OF RS.18,71 0/-, RS.8,587/- AND RS.11,990/- WAS DECLARED BY THE ASSESSEE IN THE RET URNS OF INCOME FILED FOR A.Y. 2003-04, 2004-05 AND 2005-06 RESPECTIVELY. THESE RETURNS FILED BY THE ASSESSEE WERE INITIALLY ACCEPTED BY THE ASSE SSING OFFICER UNDER SECTION 143(1). SUBSEQUENTLY THE ASSESSMENTS, HOWEV ER, WERE REOPENED BY HIM FOR ALL THE THREE YEARS UNDER CONSIDERATION AND IN THE ASSESSMENTS COMPLETED UNDER SECTION 143(3) READ WITH SECTION 14 7 VIDE ORDERS DATED 10.09.2008 FOR ALL THE THREE YEARS UNDER CONSIDERAT ION, THE RENTAL INCOME WAS ASSESSED BY HIM TO TAX IN THE HANDS OF THE ASSE SSEE UNDER THE HEAD INCOME FROM HOUSE PROPERTY AS THE ASSESSEE WAS FO UND TO BE A DEEMED OWNER OF THE PROPERTY WITHIN THE MEANING OF SECTION 27(IIIB). AFTER ALLOWING STANDARD DEDUCTION UNDER SECTION 24(A) AGA INST THE RENTAL INCOME ASSESSED TO TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESSING OFFICER AT RS.1,34,690/-, RS.1,41,430/- AND RS.1,48,500/- FOR A.Y. 2003-04, 2004-05 AND 2005-06 RESPECTIVELY. ON APPEAL, THE LD. CIT(AP PEALS) UPHELD THE ORDERS PASSED BY THE ASSESSING OFFICER UNDER SECTIO N 143(3) READ WITH SECTION 147. ON FURTHER APPEAL, THE TRIBUNAL VIDE I TS COMMON ORDER DATED 10.12.2010 PASSED FOR ALL THE THREE YEARS UNDER CON SIDERATION UPHELD THE ACTION OF THE AUTHORITIES BELOW IN ASSESSING THE RE NTAL INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM HOUSE PROPERTY . THE TRIBUNAL, HOWEVER, FOUND THAT NEITHER THE ASSESSING OFFICER N OR THE LD. CIT(APPEALS) HAD COMPUTED THE TAXABLE INCOME OF THE ASSESSEE AS PER LAW AS THE ALLOWABILITY OF VARIOUS EXPENSES CLAIMED BY THE ASSESSEE IN THE PROFIT & LOSS ACCOUNT WAS NOT CONSIDERED BY THEM. T HE TRIBUNAL, THEREFORE, RESTORED THE MATTER TO THE FILE OF THE A SSESSING OFFICER FOR THE LIMITED PURPOSE OF CONSIDERING THE ALLOWABILITY OF THE VARIOUS EXPENSES DEBITED BY THE ASSESSEE IN THE PROFIT & LOSS ACCOUN T. 3. AS PER THE DIRECTION OF THE TRIBUNAL, THE MATTER WAS TAKEN UP BY THE ASSESSING OFFICER FOR CONSIDERATION IN THE SET ASID E PROCEEDINGS. ACCORDING TO HIM, THE ASSESSEE, HOWEVER, DID NOT CO MPLY WITH HIS I.T.A. NOS. 311, 312 & 313/KOL./2016 ASSESSMENT YEAR: 2003-2004, 2004-2005 & 2005-2006 PAGE 3 OF 5 REQUIREMENTS AND REQUESTED TO KEEP THE SET ASIDE PR OCEEDINGS IN ABEYANCE AS THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IN RESPECT OF THE ORDER OF THE TRIBUNAL WAS PENDING. S INCE THE MATTER WAS GETTING TIME BARRED, THE ASSESSING OFFICER PROCEEDE D TO COMPLETE THE ASSESSMENTS UNDER SECTION 143(3) READ WITH SECTIONS 147 AND 254 OF THE ACT FOR ALL THE THREE YEARS UNDER CONSIDERATION VID E ORDERS DATED 30.12.2011, WHEREIN HE DID NOT ALLOW ANY EXPENDITUR E CLAIMED BY THE ASSESSEE IN THE PROFIT & LOSS ACCOUNT. 4. AGAINST THE ORDERS PASSED BY THE ASSESSING OFFIC ER UNDER SECTION 143(3) READ WITH SECTIONS 147 AND 254 FOR ALL THE T HREE YEARS UNDER CONSIDERATION, THE ASESSEE AGAIN FILED APPEALS BEFO RE THE LD. CIT(APPEALS). DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE T HE LD. CIT(APPEALS), RELIANCE, INTER ALIA, WAS PLACED BY THE ASSESSEE ON CERTAIN JUDICIAL PRONOUNCEMENTS IN SUPPORT OF ITS CLAIM THAT EVEN IF THERE WAS NO INCOME ASSESSED UNDER THE HEAD PROFITS AND GAINS OF BUSIN ESS OR PROFESSION IN THE CASE OF A COMPANY, THE EXPENDITURE INCURRED TO MAINTAIN ITS ESTABLISHMENT FOR COMPLYING WITH STATUTORY OBLIGATI ON SO LONG AS IT IS IN OPERATION AND ITS NAME IS STRUCK OFF THE REGISTER H AS TO BE ALLOWED. THE JUDICIAL PRONOUNCEMENTS CITED BY THE ASSESSEE WERE FOUND BY THE LD. CIT(APPEALS) DISTINGUISHABLE ON FACTS AND HE UPHELD THE ORDERS PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) READ WIT H SECTIONS 147 AND 254 FOR ALL THE THREE YEARS UNDER CONSIDERATION BY OBSERVING THAT THERE WAS NO CASE MADE BY THE ASSESSEE FOR ALLOWING ANY D EDUCTION OTHER THAN THE DEDUCTION ALREADY ALLOWED UNDER SECTION 24(A). AGGRIEVED BY THE ORDERS OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PR EFERRED THESE APPEALS BEFORE THE TRIBUNAL. 5. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ALTHOUGH THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE I.T.A. NOS. 311, 312 & 313/KOL./2016 ASSESSMENT YEAR: 2003-2004, 2004-2005 & 2005-2006 PAGE 4 OF 5 CASE OF CHENNAI PROPERTIES AND INVESTMENT LIMITED VS.- CIT (CIVIL APPEAL NO. 4494 OF 2004 DATED 09.04.2015) TO CONTEND THAT THE RENTAL INCOME RECEIVED BY THE ASSESSEE IS ASSESSABLE UNDER THE HE AD PROFITS AND GAINS OF BUSINESS OR PROFESSION, I FIND THAT THE ISSUE A S REGARDS THE HEAD OF INCOME UNDER WHICH THE RENTAL INCOME RECEIVED BY TH E ASSESSEE IS CHARGEABLE TO TAX HAS ALREADY BECOME FINAL VIDE TRI BUNALS ORDER DATED 10.12.2010 AND SINCE THE MATTER WAS RESTORED TO THE FILE OF THE ASSESSING OFFICER BY THE SAID ORDER OF THE TRIBUNAL FOR THE L IMITED PURPOSE OF CONSIDERING AND ALLOWING DEDUCTION ON ACCOUNT OF VA RIOUS EXPENSES CLAIMED BY THE ASSESSEE IN THE PROFIT & LOSS ACCOUN T, THE SCOPE OF THE SET ASIDE PROCEEDINGS IS LIMITED TO THAT EXTENT ONLY. I N THIS REGARD, IT IS OBSERVED THAT EVEN THOUGH OPPORTUNITY OF BEING HEAR D WAS GIVEN BY THE ASSESSING OFFICER TO THE ASSESSEE TO GIVE EFFECT TO THE ORDER OF THE TRIBUNAL DATED 10.12.2010 (SUPRA), THE ASSESSEE SOU GHT TIME AS THE MISCELLANEOUS APPLICATION FILED BY IT AGAINST THE O RDER OF THE TRIBUNAL WAS PENDING AT THE RELEVANT TIME. THE ASSESSEE THUS DID NOT GET ANY EFFECTIVE OPPORTUNITY TO PUT FORTH ITS CASE ON THE ISSUE OF ALLOWABILITY OF VARIOUS EXPENSES DEBITED IN THE PROFIT & LOSS ACCOU NT BEFORE THE ASSESSING OFFICER DURING THE COURSE OF SET ASIDE PR OCEEDINGS. EVEN THE LD. CIT(APPEALS) WHILE DISPOSING OF THE APPEALS OF THE ASSESSEE VIDE HIS IMPUGNED ORDERS CONFINED HIMSELF TO DISTINGUISH THE CASE LAWS CITED BY THE ASSESSEE AND DID NOT CONSIDER SPECIFICALLY THE ALLOWABILITY OF EXPENSES DEBITED BY THE ASSESSEE TO THE PROFIT & LOSS ACCOUN T AS PER THE DIRECTION OF THE TRIBUNAL. IN THESE FACTS AND CIRCUMSTANCES O F THE CASE, AS CLEARLY EVIDENT FROM THE RECORD, THE LD. COUNSEL FOR THE AS SESSEE HAS URGED THAT ONE MORE OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE T O MAKE OUT A CASE BEFORE THE ASSESSING OFFICER AND ALTHOUGH THE LD. D .R. HAS STRONGLY OPPOSED THE SAME BY SUBMITTING THAT THE ASSESSEE HA S ALREADY BEEN GIVEN SUFFICIENT OPPORTUNITY TO DO SO. I AM OF THE VIEW T HAT THE ASSESSEE IN THE FACTS AND CIRCUMSTANCES OF THE CASE DESERVES TO BE GIVEN ONE MORE OPPORTUNITY TO PUT FORTH ITS CASE BEFORE THE ASSESS ING OFFICER IN THE INTEREST OF JUSTICE. IN THAT VIEW OF THE MATTER, I SET ASIDE THE IMPUGNED ORDERS OF THE LD. CIT(APPEALS) AND RESTORE THE MATT ER TO THE FILE OF THE I.T.A. NOS. 311, 312 & 313/KOL./2016 ASSESSMENT YEAR: 2003-2004, 2004-2005 & 2005-2006 PAGE 5 OF 5 ASSESSING OFFICER WITH A DIRECTION TO CONSIDER AND DECIDE THE ISSUE RELATING TO THE ALLOWABILITY OF VARIOUS EXPENSES DE BITED BY THE ASSESSEE IN THE PROFIT & LOSS ACCOUNT AFRESH ON MERIT IN ACCORD ANCE WITH LAW AFTER GIVING PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, ALL THE THREE APPEALS OF THE ASSE SSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON APRIL 29, 201 6. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 29 TH DAY OF APRIL, 2016 COPIES TO : (1) LOUDON PROPERTIES (P) LIMITED, 6/7A, A.J.C. BOSE ROAD, KOLKATA-700 017 (2) INCOME TAX OFFICER, WARD-6(2), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (3) COMMISSIONER OF INCOME TAX (APPEALS)-17, KOLKA TA (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.