M/s Rajneesh Photo Sales, Chandigarh V. ITO, Chandigarh

ITA 312/CHANDI/2012

• Counselvise Citation: 31221514 RSA 2012
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-08-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 09-03-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SUNISH BINDLISH
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT ITA NO. 312/CHD/2012 ASSESSMENT YEAR: 2007-08 M/S RAJNEESH PHOTO SALES, VS THE ITO, WARD 3(3), CHANDIGARH CHANDIGARH PAN NO. AABFR3520M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUNISH BINDLISH RESPONDENT BY : SHRI AKHILESH GUPTA DATE OF HEARING : 07-08-2012 DATE OF PRONOUNCEMENT : 07-08-2012 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), CHANDIGARH DATED 14.12.2011 RELATING TO AS SESSMENT YEAR 2007-08. 2. GROUND NO.1 OF THE APPEAL IS GENERAL IN NATURE A ND HENCE NO COMMENCE ARE BEING OFFERED. 3. GROUND NO.2 OF THE APPEAL READS AS UNDER:- 2. WORTHY CIT(A) HAS ERRED IN CONFIRMING THE ADDITION MADE BY LD. ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE OF RS. 2,59,884/- U/S 40(A)(IA) OF THE INCOME TAX ACT. 2 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A FIRM CARRYING ON BUSINESS OF TRADING AND DEVELOPMENT OF PHOTO FILMS IN THE NAME AND STYLE OF M/S RAJNEESH PHOTO SALES AT SECTOR 22- B, CHANDIGARH. THE ASSESSEE HAD DEBITED AN AMOUNT OF RS. 2,59,884/- TO THE PROFIT AND LOSS ACCOUNT ON ACCOUNT OF RENT. THE ASSESSEE DID NOT D EDUCT TAX AT SOURCE ON THIS RENT AND WHEN THE ASSESSING OFFICER QUESTIONED, THE ASSESSEE FILED A RENT DEED EXECUTED ON 23.9.1998 FOR A PERIOD OF FIVE YEA RS FROM 1.10.1998 TO 30.10.2003 BETWEEN SHRI MOHAN SINGH S/O SHRI HARI S INGH, RESIDENT OF H.NO. 1300, SECTOR 18-C, CHANDIGARH THROUGH HIS ATTORNEY SHRI MANDEEP SINGH S/O SHRI MOHAN SINGH RESIDENT OF H.NO. 1300, SECTOR 18- C, CHANDIGARH AND THE THREE PARTNERS OF THE FIRM. AS PER CLAUSE-3 OF TH IS DEED, A FRESH RENT DEED WAS TO BE EXECUTED ON NEW TERMS AND CONDITIONS AFTE R EXPIRY OF THIS DEED. WHEN THE ASSESSING OFFICER POINTED OUT THAT THIS L EASE DEED HAD EXPIRED, THE ASSESSEE HAD SUBMITTED THAT THE SAME SYSTEM CONTINU ED WITHOUT ANY VARIATION. THE ASSESSEE FURTHER SUBMITTED THAT RENT PAID HAD B EEN DIVIDED AMONGST SHRI MOHAN SINGH, DR. PARDEEP SINGH, SHRI MANDEEP SINGH AND SHRI AMANDEEP SINGH AND SO TAX WAS NOT DEDUCTED. THE ASSESSING OFFICER DID NOT ACCEPT THE ABOVE SUBMISSIONS OF THE ASSESSEE AND DISALLOWED TH E ENTIRE AMOUNT OF RS. 2,59,884/- U/S 40(A)(IA) OF THE INCOME TAX ACT, 196 1 (IN SHORT 'THE ACT'). 5. ON APPEAL, THE CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER AND, HENCE, THE ASSESSEE IS IN APPEAL BEFORE THE TR IBUNAL. 3 6. I HAVE HEARD SHRI SUNISH BINDLISH, ADVOCATE, LD. COUNSEL FOR THE ASSESSEE AND SHRI AKHILESH KUMAR, LD. DR AT LENGTH. I HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. SHRI SUNISH BINDLISH , LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE ISSUE IS SQUARELY COV ERED BY THE DECISION OF THE ITAT CHANDIGARH, BENCH B CHANDIGARH IN THE CASE O F ITO VS SMT. VANDANA GOEL, SIRSA DATED 28.5.2012 IN ITA NO. 1436/CHD/20 10 RELATING TO ASSESSMENT YEAR 2007-08. THE TRIBUNAL RELYING ON T HE DECISION OF ITAT, VISAKHAPATNAM - SPECIAL BENCH IN THE CASE OF MERILY N SHIPPING AND TRANSPORTS VS ADDITIONAL CIT [2012] 16 ITR (TRIB) 1 (VISAKHAPATNAM)[SB] HELD AS UNDER:- 9. WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE IS SQUARELY COVERED BY THE RATIO OF THE DECISION IN TH E SPECIAL BENCH OF ITAT VISAKHAPATNAM (SUPRA). IN VI EW OF THIS, ISSUE IS RESTORED TO THE FILE OF THE ASSESSIN G OFFICER, FOR THE PURPOSE OF ADJUDICATING THE SAME, STRICTLY IN TERMS OF THE RATIO OF THE DECISION OF THE SPECIAL BENCH O F ITAT VISAKHAPATNAM (SUPRA), AFTER AFFORDING PROPER AND REASONABLE OPPORTUNITY TO THE ASSESSEE. THE ASSESS ING OFFICER SHOULD VERIFY THE ACTUAL AMOUNT OF RENT PAI D BY THE ASSESSEE DURING THE RELEVANT FINANCIAL YEAR FROM TH E RELEVANT RECORDS AND ADJUDICATE THE ISSUE AFRESH, A S PER THE DECISION OF THE SPECIAL BENCH REFERRED TO ABOVE . IN VIEW OF THIS, FOR THIS LIMITED PURPOSE, THE ISSUE I S RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJU DICATION. THE GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PUR POSE. 7. THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE FACTS OF THE CASE OF SMT. VANDANA GOEL (SUPRA). RESPECTFULLY FOLLOWING THE ABOVE DECISION, I SET ASIDE THE ORDER OF CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF 4 ASSESSING OFFICER, FOR THE PURPOSE OF ADJUDICATING THE SAME, STRICTLY IN TERMS OF THE DECISION OF THE SPECIAL BENCH OF THE ITAT, V ISAKHAPATNAM (SUPRA). THE ASSESSING OFFICER IS ALSO DIRECTED TO OFFER AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. FURTHER, THE ASSESSING OFFICER SH OULD VERIFY THE ACTUAL AMOUNT OF RENT PAID BY THE ASSESSEE DURING THE RELE VANT FINANCIAL YEAR FROM THE RELEVANT RECORD AND ADJUDICATE THE ISSUE AFRESH AS PER THE DECISION OF THE SPECIAL BENCH REFERRED TO ABOVE. IN VIEW OF THE AB OVE, FOR THIS LIMITED PURPOSE, THE ISSUE IS RESTORED TO THE FILE OF ASSES SING OFFICER FOR FRESH ADJUDICATION. THE GROUND OF APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES. 8. GROUND NO.3 OF THE APPEAL READS AS UNDER:- 3. WORTHY CIT(A) HAS ERRED IN CONFIRMING THE ADDITI ON MADE BY LD. ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE AT RS. 2,935/- OF FRINGE BENEFIT TAX (F OR SHORT FBT). 9. AT THE TIME OF HEARING OF THE APPEAL, SHRI SUNIS H BINDLISH, LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS FOR THIS GROUND OF A PPEAL AND ACCORDINGLY I DISMISS THE SAME AS NOT PRESSED. 10. NO OTHER POINT WAS RAISED OR ARGUED BEFORE ME. 11. IN THE RESULT, THE APPEAL IS ALLOWED PARTLY FOR STATISTICAL PURPOSES AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 7 TH AUGUST, 2012. SD/- (H.L.KARWA) VICE PRESIDENT DATED : 7 TH AUGUST, 2012 RKK 5 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR