RAJAT R. PATEL, MUMBAI V. DCIT CEN CIR 25, MUMBAI

ITA 3183/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1575 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: H
• Next Hearing Date: 07-12-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 26-05-2015
• Court: TRIBUNAL
• Department Lawyers: GULSHAN RAJ
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI AMIT SHUKLA (JM) I.T.A. NO. 3183 /MUM/ 2015 (ASSESSMENT YEAR 200 8 - 0 9 ) I.T.A. NO. 3184/MUM/2015 (ASSESSMENT YEAR 2009 - 10) I.T.A. NO. 318 5 /MUM/2015 (ASSESSMENT YEA R 20 1 0 - 11 ) I.T.A. NO. 3186/MUM/2015 (ASSESSMENT YEAR 2011 - 12) SHRI RAJAT R. PATEL 6, RAJ HEM 27, VAIKUNTHLAL MEHTA ROAD JVPD SCHEME VILE PARLE WEST MUMBAI - 400 056. VS. DCIT CC - 25 NEW MARINE LINES M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) PA N NO . AAIPP5183F ASSESSEE BY NONE DEPARTMENT BY SHRI GULSHAN RAJ DATE OF HEARING 7 .1 2 . 201 6 DATE OF PRONOUNCEMENT 7 . 12 . 201 6 O R D E R PER BENCH: ALL THE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS PASSED BY LD CIT(A) - 51, MUMBAI AND THEY RELATE TO THE ASSESSMENT YEARS 2008 - 09 TO 2011 - 12. NONE APPEARED ON BEHALF OF THE ASSESSEE, EVEN THOUGH NOTICES WERE ISSUED BY REGISTERED POST ONE MORE THAN ONE OCCASION. HENCE WE PROCEED TO DISPOSE OF THESE APPEALS EX - PARTE, WITHOUT THE PRESENCE OF THE ASSESSEE. RAJAT R. PATEL 2 2. ALL THESE ASSESSMENTS HAVE BEEN FRAMED U/S 153C OF THE ACT, CONSEQUENT TO SEARCH CONDUCTED IN THE CASE OF M/S PATEL ENGINEERING LTD ON 16.12.2010, DURING THE COURSE OF WHICH CERTAIN DOCUMENTS RELATING TO THE ASSESSEE WERE FOUND. 3. THE COMMON ISSUE URGED IN ALL THE FOUR YEARS RELATES TO DISALLOWANCE OF EXPENSES CLAIMED BY THE ASSESSEE AGAINST THE INTEREST INCOME RECEIVED FROM PARTNERSHIP FIRM. SINCE THE ASSESSEE DID NOT SUBSTANTIATE THAT THE EXPENSES WERE INCURRED TOWAR DS EARNING INTEREST INCOME FROM THE PARTNERSHIP FIRM, THE AO DISALLOWED THE SAME IN ALL THE FOUR YEARS. THE LD CIT(A) ALSO CONFIRMED THE SAID DISALLOWANCE MADE IN ALL THE FOUR YEARS. 4. WE HEARD LD D.R AND PERUSED THE RECORD. WE NOTICE THAT THE ASSE SSEE DID NOT ESTABLISH THAT THE EXPENSES WERE NECESSARY TO EARN THE INTEREST INCOME FROM THE PARTNERSHIP FIRM. HENCE WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE IN ALL THE FOUR YEARS. 5. IN ASSESSMENT YEAR 2009 - 10, THE ASSESSEE HAS URGED FOLLOWING ISSUES ALSO: - (A) REJECTION OF CLAIM OF SET OFF OF BUSINESS LOSS AGAINST BUSINESS INCOME. (B) REJECTION OF CLAIM OF SET OFF OF SHORT TERM CAPITAL LOSS. 6. THE FIRST ISSUE RELATES TO THE REJECTION OF CLAIM OF SET OFF O F BUSINESS LOSS AGAINST BUSINESS INCOME. THE ASSESSEE HAD DECLARED CAPITAL LOSS OF RS.10,34,772/ - . THE AO TREATED A SUM OF RS.2,01,274/ - AS BUSINESS LOSS. THE ASSESSEE SOUGHT SET OFF OF ABOVE SAID BUSINESS LOSS AGAINST BUSINESS INCOME DECLARED BY HIM. SINCE THE ASSESSED INCOME WOULD GO BELOW THE RETURNED INCOME, IF THE ABOVE SAID SET OFF IS ALLOWED, THE AO REJECTED THE SAID CLAIM AND LD CIT(A) ALSO CONFIRMED THE SAME. RAJAT R. PATEL 3 7. WE HEARD LD D.R AND PERUSED THE RECORD. WE NOTICE THAT IT IS THE AO, WHO HAS TREATED A PART OF CAPITAL LOSS DECLARED BY THE ASSESSEE AS BUSINESS LOSS. SINCE THE ASSESSEE ACCEPTED THE SAME, HE HAS SOUGHT FOR SETTING OFF OF THE SAME AGAINST BUSINESS INCOME IN ACCORDANCE WITH THE LAW. WE NOTICE THAT THE TAX AUTHORITIES HAVE REJECTE D THE SAID CLAIM ONLY FOR THE REASON THAT THE ASSESSED INCOME SHALL GO BELOW THE RETURNED INCOME, IF SUCH SET OFF OF LOSS IS ALLOWED. IN OUR VIEW, THE SAID STAND OF THE TAX AUTHORITIES DOES NOT APPEAR TO BE IN ACCORDANCE WITH THE LAW. IT IS SETTLED PRINC IPLE THAT THERE IS NO ESTOPPEL AGAINST LAW. ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND DIRECT THE AO TO ALLOW SET OFF OF LOSS IN ACCORDANCE WITH THE LAW. 8. THE NEXT GROUND RELATES TO THE REJECTION OF CLAIM OF SET OFF O F SHORT TERM CAPITAL LOSS. THE TAX AUTHORITIES HAVE REJECTED THE SAME ON THE GROUND THAT THE ASSESSEE DID NOT MAKE THIS CLAIM IN THE RETURN OF INCOME. WE NOTICE THAT THE ASSESSEE DID NOT SUBSTANTIATE HIS CLAIM WITH PROPER EVIDENCES. UNDER THESE SET OF FA CTS, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE. 9. IN ASSESSMENT YEAR 2010 - 11 AND 2011 - 12, THE ASSESSEE IS CHALLENGING THE ASSESSMENT OF RENTAL INCOME ON PROTECTIVE BASIS. THE ASSESSEE RETIRED FROM A PARTNE RSHIP FIRM AND UPON HIS RETIREMENT, HE WAS ALLOTTED FIVE FLATS. THE ASSESSEE CONVERTED THREE FLATS INTO ONE RESIDENTIAL UNIT AND LET OUT THE REMAINING TWO FLATS. THE ASSESSEE DID NOT OFFER RENTAL INCOME ON THE PLEA THAT THE SAME WAS OFFERED BY THE PARTNE RSHIP FIRM. HOWEVER, THE AO ASSESSED THE RENTAL INCOME ON PROTECTIVE BASIS. THE LD CIT(A) ALSO CONFIRMED THE SAME. 10. WE HAVE HEARD LD D.R AND PERUSED THE RECORD. SINCE THE RENTAL INCOME HAS BEEN ASSESSED ON PROTECTIVE BASIS, WE ARE OF THE VIEW TH AT THE LD CIT(A) WAS JUSTIFIED IN NOT DISTURBING THE PROTECTIVE ASSESSMENT SO MADE. RAJAT R. PATEL 4 11. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE FOR AY 2008 - 09, 2010 - 11 AND 2011 - 12 ARE DISMISSED. THE APPEAL FILED FOR AY 2009 - 10 IS TREATED AS PARTLY ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 7 .1 2 .2016 SD/ - SD/ - (AMIT SHUKLA ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 7 / 1 2 / 20 1 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI PS