BANOO BATLIBOI, MUMBAI V. ACIT 16(1), MUMBAI

ITA 3151/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3209 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 05-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G N MAKNANA
• Keywords: Earning of tax free income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER & SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.3151/MUM/2014 ASSESSMENT YEAR : 2007-08 S MT BANOO BATLIBOI, RAAJ MAHAL, 33 ALTAMOUNT R D KEMPS CORNER MUMBAI 400 026 PAN AAJPB7757L VS. ACIT 16(1) MUMBAI (APPELLANT) RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI G N MAKNANA DATE OF HEARING : 2 4 .0 5 .201 6 DATE OF PRONOUNCEMENT : 27 .0 5 . 201 6 O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER THIS APPEAL BY ASSESSEE IS ARISING OUT OF THE ORDE R OF THE CIT(A) I, MUMBAI, IN APPEAL NO.CIT(A)-I/IT-16(234)/2011-12 DATED 11.0 2.2014. THE ASSESSMENT WAS FRAMED BY THE ACIT 16(1), MUMBAI, FOR A.Y. 2007-08 VIDE HIS ORDER DATED 11.02.2014 U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(A) IN CONFIRMING THE ADDITION MADE BY THE AO BE ING PARTNERSHIP PROFIT CLAIMED AS EXEMPT U/S. 10(2A) OF THE ACT AMOUNTING TO RS.48 ,000/- BEING DIFFERENCE ARISING ON ACCOUNT OF RENTAL INCOME. ITA NO.3151/MUM/2014 BANOO BATLIBOI 2 3. WE HAVE HEARD THE LEARNED SENIOR DR AND HAVE GON E THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. BRIEFLY STATED THE FACT S OF THE CASE ARE THAT THE ASSESSEE IS A PROPRIETOR OF M/S. RJB HANDS ON AND M/S. J R C O., WHICH ARE ENGAGED IN THE BUSINESS OF INTERIOR DESIGNING AND TRADING IN MATER IALS REQUIRED FOR INTERIOR DESIGNING. THE ASSESSEE IS ALSO PARTNER IN A PARTN ERSHIP FIRM JAMSHEDJI RATANJI & CO., WHERE THE ASSESSEES SHARE OF PROFIT IN THE FI RM IS 40%. THE SAID FIRM, INTER ALIA, HAS INCOME FROM HOUSE PROPERTY. DURING THE Y EAR UNDER CONSIDERATION, THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INC OME OF RS.72,62,329/- AND IN ADDITION, SHE HAD EARNED EXEMPT INCOME OF RS.3,13,9 70/- BEING HER SHARE IN PROFIT IN THE PARTNERSHIP FIRM. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, THE AO NOTED THAT THERE IS DIFFERENCE IN THE RENTAL INCOME AS AP PEARING IN THE PROFIT & LOSS ACCOUNT OF THE PARTNERSHIP CONCERN AS COMPARED TO THE RENTA L INCOME DECLARED FROM HOUSE PROPERTY ASSESSED IN THE HANDS OF THE FIRM. THE AS SESSEE EXPLAINED BEFORE THE AO THAT THE DIFFERENCE IS ON ACCOUNT OF DEDUCTION ALLO WED U/S. 24 OF THE ACT. THE AO IGNORED THE SUBMISSIONS AND MADE ADDITION BEING DIF FERENTIAL AMOUNT OF RS.48,000/. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A), WHO ALSO CONFIRMED THE ACTION OF THE AO OBSERVING AS UNDER: 3.2 I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE, SUBMISSIONS AND ARGUMENTS OF THE APPELLANT AND FIND INGS OF THE A.O. IN THE ASSESSMENT ORDER. THERE IS NO DISPUTE ON THE V ERIFIED AMOUNT OF SHARE OF THE APPELLANT IN THE TOTAL INCOME OF THE F IRM AS RECORDED BY THE A.O. IN THE ASSESSMENT ORDER. THE EXPLANATION GIVE N BY APPELLANT AS NOTED ABOVE REFERRING TO COMPUTATION OF TOTAL INCOM E OF THE FIRM IS CONTRADICTORY TO THE RECORDS NAMELY RETURN OF INCOM E OF THE FIRM AND THE VERIFICATION DONE BY THE A.O. IT IS ALSO NOT RELEV ANT IN RESPECT OF THE SHARE OF THE APPELLANT IN THE INCOME OF THE FIRM AS DISCUSSED BY THE A.O. IN FACT THE SUBMISSION OF THE APPELLANT IS TOTALLY DELINKED TO THE GROUND OF APPEAL STATING THAT SUCH AMOUNT IS NEITHER RECEIVED NOR RECEIVABLE IN THE FORM OF SALARY OR INTEREST. THE LEARNED AR HAS ARG UED FOR 30% STATUTORY DEDUCTION ALLOWABLE UNDER THE COMPUTATION PROVISION S OF INCOME FROM ITA NO.3151/MUM/2014 BANOO BATLIBOI 3 HOUSE PROPERTY, SEPARATELY IN THE HANDS OF APPELLAN T AGAINST THE RENTAL INCOME INCLUDED IN THE RETURN OF THE PARTNERSHIP FI RM AT RS.4 LAKHS. ONCE THE RENTAL INCOME IS COMPUTED AND INCLUDED IN THE RETURN OF PARTNERSHIP FIRM, SAME CANNOT BE RECOMPUTED IN THE HANDS OF APPELLANT RESULTING IN DOUBLE STATUTORY DEDUCTION OF 30% AS C LAIMED BY THE APPELLANT. IN ANY CASE, IF THERE WAS ANY APPARENT MISTAKE IN CALCULATION OF THE HOUSE PROPERTY IN THE HANDS OF THE FIRM, SAM E COULD HAVE BEEN EXPLAINED IN THE ASSESSMENT OF THE FIRM, FOLLOWED B Y ANY CORRECTIONS IN THE INCOME OF THE APPELLANT. THE REMEDY IS YET AVA ILABLE TO THE APPELLANT IN THAT MANNER. AGGRIEVED, NOW THE ASSESSEE IS IN SECOND ROUND OF A PPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE LEARNED SENIOR DR AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ONLY D ISPUTE IS REGARDING COMPUTATION OF STATUTORY DEDUCTION ALLOWABLE UNDER THE COMPUTAT ION PROVISIONS OF INCOME FROM HOUSE PROPERTY AND WHETHER IT FORMS PART OF CLAIM O F DEDUCTION U/S. 10(2A) OF THE ACT I.E. SHARE OF PROFIT FROM PARTNERSHIP FIRM. W E ARE OF THE VIEW THAT YES, THE ASSESSEE IS ENTITLED FOR CLAIM OF DEDUCTION AND ACC ORDINGLY, WE DIRECT THE AO TO RECOMPUTED THE DEDUCTION AND ALLOW THE CLAIM OF THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 7 TH MAY 2016. SD/- SD/- (RAJESH KUMAR) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED : MAY, 2016. SA ITA NO.3151/MUM/2014 BANOO BATLIBOI 4 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE C I T(A), MUMBAI. 4. THE C I T 5. THE DR, B BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI