SHRI SUBHASH CHAND AGARWAL, Kota V. INCOME TAX OFFICER, WARD-1-2, KOTA

ITA 336/JPR/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2923 (ITAT-JAIPUR)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 13-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B V MAHESHWARI
• Keywords: Business income; Depreciation; Salary income; Revised return; Capital Gains
• Section: 44AD; 80C; 139(5); 139(1); 139(4); 56

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HES A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRA M SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 336/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2012-13 SHRI SUBHASH CHANDRA AGARWAL, C/O B VISHAL & CO. RAGHUKUL, 15, UIT PLOTS B/H, GUMANPURA POLICE STATION, JHALAWAR ROAD, KOTA CUKE VS. ITO, WARD-1(2), KOTA LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AATPA6866D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SH. B. V. MAHESHWARI (CA) JKTLO DH VKSJ LS @ REVENUE BY : MS. CHANCHAL MEENA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 03/03/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 06/03/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A), KOTA DATED 21.01.2019 WHEREIN THE ASSESSEE HAS TAKE N FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD. AO GROSSLY ERRED ON LAW & FACTS IN NOT CONSIDERING THE REVISED RETURN FILED BY THE ASSESSEE AND THE LD . CIT(A) ALSO ERRED IN DISMISSING THE GROUND, ALTHOUGH HE HAS ALSO STAT ED TO HAVE ADMITTED THE GROUND. 2. THAT THE LD. AO GROSSLY ERRED IN MAKING THE ADDI TION TO WORDS SALARY RS. 8,59,515.00/- THE ASSESSEE DECLARED SALA RY AS PER CERTIFICATE RS. 1,80,000.00/- THUS THE LD. AO MADE ADDITION OF RS. 6,79,515.00/- THE LD. CIT(A) HAVE NOT DISCUSSED IN DETAILS & REST RICT THE SALARY AT RS. 6,00,000.00/- THEREBY SUSTAINED THE ADDITION OF RS. 4,20,000.00/- BASED ON REVISED RETURN. ITA NO. 336/JP/2019 SHRI SUBHASH CHANDRA AGARWAL, KOTA VS. ITO, KOTA 2 3. THAT THE LD. AO GROSSLY ERRED ON LAW & FACTS IN NOT ALLOWING THE LOSS IN HOUSE PROPERTY AS CLAIMED BY THE ASSESSEE & APART FROM THAT, HE ASSESSED INCOME FROM HOUSE PROPERTY RS. 3,17,940 .00/-. HOWEVER THE LD. CIT(A) PARTLY ALLOWED THE GROUND OF THE ASS ESSEE & HOUSE PROPERTY LOSS WAS RESTRICTED TO RS. (-) 11,872.00/- IN PLACE OF RS. (-) 3,08,872.00/- THEREBY SUSTAINED THE ADDITION OF RS. 2,97,000.00/-. 4. THAT THE LD. AO GROSSLY ERRED ON LAW & FACT IN M AKING THE ADDITION OF RS. 12,209.00/- UNDER INCOME FROM OTHER SOURCES, THE LD. CIT(A) ALSO ERRED IN SUSTAINING THE SAID ADDITION. 5. THAT THE LD. AO GROSSLY ERRED ON LAW & FACTS IN DISALLOWANCE OF RS. 18,75,50.00/- OUT OF HOSTEL EXPENSES THE LD. CI T(A) SUSTAINED RS. 75,000.00/- I.E. PART OF THAT. 6. THAT THE LD. AO GROSSLY ERRED ON LAW & FACTS IN NOT CONSIDERING DEDUCTION U/S 80C RS. 84,027.00/- HOWEVER THE LD. C IT(A) ERRED IN NOT CONSIDERING THE DEDUCTION TO THE EXTENT OF RS. 1,00 ,000.00/- HE CONSIDERED RS. 73,057.00/- THEREBY SUSTAINED THE AD DITION OF RS. 45,393.00/-. 2. REGARDING GROUND NO. 1, DURING THE COURSE OF HEA RING, THE LD. AR SUBMITTED THAT THE ASSESSEE IS AN INDIVIDUAL & FILE D RETURN U/S. 139(4) OF I.T. ACT. 1961 ON 26.03.2013 SHOWING NIL INCOME RAT HER LOSS OF RS. 365843/-. IN THE SAID RETURN, THE ASSESSEE HAS NOT SHOWN SALARY & HOUSE PROPERTY INCOME, BUT ON COMPILATION OF BOOKS, HE REALIZED THAT THERE IS MISTAKE IN TAKING THE INCOME AND FOUND THA T THE ROI FILED IN HURRY ON 30.03.2013 WAS NOT PROPER, THEN HE COLLECT ED DATA FROM EMPLOYER, BANKS AND NOTED THE FOLLOWING THINGS. THE SALARY WAS RECEIVED RS. 180,000/- BUT, SINCE FORM NO. 16 WAS NOT AVAILA BLE AT THE TIME OF ORIGINAL RETURN, AND WHEN THE FORM NO. 16 WAS RECEIVED, THEN THE ASSESSEE BECAME AWARE & FILED REVISED RETURN SHOWING SALARY AS PER FORM NO. 16, AND OTHER ITA NO. 336/JP/2019 SHRI SUBHASH CHANDRA AGARWAL, KOTA VS. ITO, KOTA 3 INCOME EARNED DURING THE YEAR. HOWEVER, THE LD. A.O . ESTIMATED SALARY INCOME BASED ON A.Y. 2010-11. THAT THE ASSESSEE HAS NOT WORKED FOR KENDRIYA ACADEMY VIDHYALAYA VIDYALAY SHIKSHA SAMITI , HE WORKED FOR NEW SCHOOL, BEING DEVELOPED I.E. NAVEEN KENDRIYA SHIKSH A SAMITI,BARAN AND GOT THE SALARY RS. 180,000/- (15,000/- P.M.), SIMILARLY HE HAS SHOWN RENT RS. 120,000/- RECEIVED FROM STUDENTS & AFTER CLAIMING I NTEREST, HE DECLARED THE LOSS. THUS THE RETURN WAS REVISED TO BRING TO TAX T HE ACTUAL INCOME. IT HAS BEEN DECIDED BY THE ALLAHABAD HIGH COURT THAT THERE IS NO BAR IN FILLING A BELATED OR REVISED RETURN AS LONG AS NO ASSESSMENT INTERVENED NIRANJAN LAL RAM CHANDRA (ALL) 134 ITR 352 (1982). 3. IT WAS FURTHER SUBMITTED THAT ONCE A REVISED RET URN IS FILED, THE ORIGINAL RETURN COULDN'T BE ADVERTED TO AT ALL AS W AS DECIDED BY PUNJAB & HARYANA HIGH COURT IN THE MATTER OF DEPRECIATION CL AIM FOLLOWING THE DECISION OF BECO ENGG CO. LTD. V/S. CIT (1984) 148 ITR 478 (P & H) THIS IS FOLLOWED IN OTHER DECISION IN THE CASE OF CIT V/S M AHENDRA MILLS (2000) 243 ITR 56 (SC) IT WAS SO DECIDED IN KAWAL TEXTILES V/S ITO (1991) 189 ITR 339 (M.P.). 4. THUS, WHEN THE REVISED RETURN IS SUPPORTED BY FO RM NO. 16, INTEREST CERTIFICATE ETC. THEN THE LD. AO OUGHT TO ACCEPT THE FIGURES OF REVISED RETURN. FURTHER THE LD. CIT(A) ALSO IGNORED THE FACTS & PROCEEDED WITH THE ORIGINAL RETURN AND ASSESSMENT ORDER WHICH HAVE NO BASE AT ALL. IN VIEW OF ABOVE WE SUBMIT TO ALLOW THE REVISED RETURN & THE GROUND BASED THEREON. 5. REGARDING GROUND NO. 2, THE LD. AR SUBMITTED THA T THIS IS THE ADDITION MADE BY ESTIMATING THAT THE ASSESSEE WOULD HAVE RECEIVED SO MUCH SALARY FROM HIS EMPLOYER. IN CASE OF SALARY, T HERE MUST BE TWO PERSONS - ONE EMPLOYER AND THE OTHER EMPLOYEE. AT T HE TIME OF ASSESSMENT THE ASSESSEE HAS GIVEN FORM NO. 16 THAT HOW MUCH HE RECEIVED THE SALARY ITA NO. 336/JP/2019 SHRI SUBHASH CHANDRA AGARWAL, KOTA VS. ITO, KOTA 4 DURING THE YEAR, BUT THE LEARNED A.O. NARRATED SO M ANY THINGS IN THE ASSESSMENT ORDER AND IT SHOWS THAT HE PROCEEDED WIT H A PREJUDICED MIND. WHAT HE STATES IS THAT IN THE AY 2010 - 11 (IGNORED AY 2011 - 12) SALARY WAS RS. 7,25,863/- AND IN THIS YEAR IT IS NIL. HE H AS NOT LOOKED INTO THE RETURN. IN THE RETURN THE SALARY HAS BEEN SHOWN RS. 1,80,000/- WHICH IS AS PER FORM NO. 16 ISSUED BY THE EMPLOYER. ON THIS ISS UE THE LEARNED A.O. HAS NO AUTHORITY TO QUESTION WHY IT IS REDUCED, HOW IT CAN BE GIVEN MORE SINCE IN THE YEAR UNDER CONSIDERATION THE EMPLOYEE HAS WO RKED IN OTHER SCHOOL. THIS IS THE MUTUAL THING BETWEEN AN EMPLOYER AND EM PLOYEE AND THE MOST IMPORTANT THING IS THAT WHEN THE PAYMENT IS GIVEN B Y THE EMPLOYER AND IS DULY ACKNOWLEDGED BY THE EMPLOYEE, IN THAT CASE THE RE IS NO CHANCE OF INCREASE OR REDUCTION. IT IS NOT A BUSINESS INCOME THAT CAN BE BASED ON THE EARLIER YEAR, HENCE THE ESTIMATION OF SALARY MADE B Y THE LEARNED A.O. BASED ON THE AY 2010 - 11 IS TOTALLY WRONG AND ADDITION I S BASED ON HIS ASSUMPTION, THEREFORE, MAY KINDLY BE DELETED. THE LD. CIT(A) AL SO REITERATED THE LD. A.O.'S VERSION & CHOOSE TO ESTIMATE THE SALARY IN P LACE OF ACTUAL SALARY & ESTIMATED THE SALARY RS. 600,000/- IN PLACE RS. 180 ,000/-, WE SUBMIT TO ALLOW THE GROUND ON ACTUAL BASIS. 6. REGARDING GROUND NO. 3, THE LD. AR SUBMITTED THA T IN CASE OF HOUSE PROPERTY, THE ASSESSEE OWNS A HOUSE SITUATED AT 756 , PRATAP NAGAR, KOTA JOINTLY WITH HIS WIFE AND SON. ON PURCHASE AND CONS TRUCTION OF THIS HOUSE, HE HAS TAKEN LOAN FROM ICICI BANK AND THE LOAN WAS OF RS. 90 LAKHS; A FAIR PROPORTION OF 1/3 RD WAS TO BE GIVEN BY HIM AND OUT OF THE SAID 1/3 RD LIABILITY HE HAS PAID THE INTEREST ON THE LOAN AND AGAINST TH AT HE ALSO RECEIVED RENT OF RS. 1,20,000/- WHICH HAS BEEN SHOWN IN THE RETUR N. AFTER GETTING THE DEDUCTION OF INTEREST AND REPAIRS ETC., THERE WAS A LOSS AND IT HAS BEEN STATED IN THE RETURN OF THE ASSESSEE. HOWEVER, THE LEARNED A.O. DISCUSSED THIS ISSUE THAT THE ASSESSEE HAS CLAIMED LOSS SINCE HE HAS NOT CONSIDERED THE REVISED INCOME WHICH WAS DULY FILED IN TIME AND A COPY THEREOF WAS ITA NO. 336/JP/2019 SHRI SUBHASH CHANDRA AGARWAL, KOTA VS. ITO, KOTA 5 SUBMITTED IN COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. ESTIMATED THE RENT THAT IN THE TWO YEARS THE RENT WAS SHOWN THIS MUCH AND BY MAKING HIS OWN ESTIMATE HE HAS ASSESSED THE POSITIVE INCOME FR OM THE HOUSE INSTEAD OF LOSS CLAIMED BY THE ASSESSEE. HOWEVER COMPLETE D ETAILS OF PURCHASE OF PROPERTY, LOAN, BANK STATEMENT WHICH HAVE BEEN GIVE N TO THE LEARNED A.O. AND COPIES THEREOF ARE FURTHER ENCLOSED HEREWITH TO SUBSTANTIATE THAT WHATEVER AMOUNT CLAIMED BY US, IS CONFIRMED AND THE ADDITION MADE BY THE LEARNED A.O. BASED ON HIS ESTIMATION MAY KINDLY BE DELETED. THE LD. CIT(A) ALLOWED THE INTEREST BUT ESTIMATED THE RENTAL INCOM E RS. 454,200/- WHICH HAS NO BASE. HE HAS TAKEN RENT BASED ON A.Y. 2010-11 WH ICH IS ENTIRELY DIFFERENT. IN A.Y. 2010-11, THE RENT FROM H NO.- 756 HAVE BEEN ASSESSED RS. 1,20,000/- AND AFTER DEDUCTIONS THE LOSS WAS ALLOW RS. 3,19,72 0/-. ON PERUSAL OF THE RETURN OF THE PREVIOUS YEAR THERE WAS RENT OF DIFFE RENT PROPERTY & IN 2010- 11 IT WAS QUITE DIFFERENT, IN THIS YEAR HE HAS LET OUT 2 ROOMS TO STUDENTS FOR 10 MONTHS OF HIS HOUSE NO. 756, PRATAP NAGAR, HENCE THE BASIS TAKEN BY LD. A.O. OF A.Y. 2010-11 IS NOT OF SAME HOUSE. FURT HER THE LD. CIT(A) HAVE NOT GONE IN TO DETAILS OF RENT, PROPERTY, REPAYMENT HENCE SUSTAINED THE PART OF THE ADDITION BASED ON A.O.'S ORDER. WE THUS SUBMIT THAT THE ACTUAL RENT BE CONSIDERED AND ALLOW THE GROUND OF THE ASSE SSEE. 7. REGARDING GROUND NO. 5, THE LD. AR SUBMITTED THA T IN RELATION TO HOSTEL INCOME, COMPLETE DETAILS WERE FILED. WE HAVE GIVEN RECEIPTS AND EXPLAINED THE ACCOUNT. THERE WAS A RECEIPT OF RS. 1 1,51,600/-, OUT OF THAT THE ASSESSEE HAS SHOWN INCOME TO THE EXTENT OF RS. 4,02,570/- WHICH IS AROUND 35%. WE SUBMIT THAT THERE ARE SO MA NY HOSTELS IN KOTA CITY AND INCOME SHOWN BY US (I.E. 35%) IS MUCH MORE THAN THE INCOME SHOWN BY OTHER HOSTEL OWNERS. MOST OF THE HOSTEL OW NERS ARE SHOWING INCOME U/S 44AD I.E. 8 - 10% IN COMPARISON TO THAT THE INCOME SHOWN BY THE ASSESSEE IS MUCH MORE. HENCE, BY MENTIONING THAT CERTAIN ITA NO. 336/JP/2019 SHRI SUBHASH CHANDRA AGARWAL, KOTA VS. ITO, KOTA 6 EXPENSES COULD NOT BE VOUCHED OR VERIFIED, THE LEAR NED A.O. DISALLOWED RS. 1,87,500/- IGNORING THE FACT THAT THE ASSESSEE HAS ALREADY SHOWN A GOOD PERCENTAGE OF PROFIT, HENCE THE ESTIMATED ADDI TION MADE BY DISALLOWING THE EXPENSES IS TOTALLY WRONG. THE LD. CIT(A) DISCUSSED THE ISSUE BUT WITHOUT GOING IN TO DETAILS SUSTAINED THE PART ADDITION OF RS. 75,000/-. ON PERUSAL OF DETAILS, YOUR WILL FIND THA T THE EXPENSES ARE IN FOLLOWING PROPORTION: SALARY 32.20% FOOD & MEDICAL 25.10% REPAIR & MAINTENANCE 7.72% PROFIT 35.08% 100.00 IT IS THE BARE MINIMUM EXPENDITURE AND THE PROFIT I S 35% WHICH IS MUCH MORE FROM RETAILS BUSINESS U/S. 44AD, AS SUCH THE P ROFIT IS REASONABLE MAY KINDLY BE ACCEPTED. 8. REGARDING GROUND NO. 6, THE LD. AR SUBMITTED THA T IN RELATION TO DEDUCTION U/S 80C WE SUBMITTED THE DETAILS AND RECE IPTS COMPLETELY, A COPY THEREOF IS AGAIN ENCLOSED HEREWITH. IN RELATIO N TO HOUSING LOAN AND REPAYMENT, COMPLETE REPAYMENT SCHEDULE WAS SUBM ITTED AND ALL THESE PAPERS, SUBMITTED BEFORE THE LEARNED A.O. ALONG WIT H THE SUBMISSION TO KINDLY PERUSE THE SAME ON THE BASIS OF THESE PAPERS AND DOCUMENTS IN RELATION TO DEDUCTION CLAIMED U/S 80C KINDLY ALLOW THE SAME SINCE THE ADDITION MADE BY THE LEARNED A.O. ARE TOTALLY BASEL ESS. THE LD. CIT(A) ALSO NOT DISCUSSED PROPERLY & HENCE ONLY PART RELIEF WAS ALLOWED BASED ON THE REPAYMENT SCHEDULE WE ARE SUBMITTING THE REPAYMENT SCHEDULE & PAYMENT PROOF DURING THE YEAR, AND REQUEST TO ALLOW THE DED UCTION U/S 80C. ITA NO. 336/JP/2019 SHRI SUBHASH CHANDRA AGARWAL, KOTA VS. ITO, KOTA 7 9. ON THE CONTRARY, THE LD. DR SUBMITTED THAT THE A SSESSEE HAS FILED A BELATED RETURN AND THEREAFTER, HAS REVISED SUCH BEL ATED RETURN OF INCOME WHICH IS NOT PERMISSIBLE AND HAS RIGHTLY NOT BEEN C ONSIDERED BY THE AO. FURTHER, ON MERITS, SHE RELIED ON THE FINDINGS OF T HE AUTHORITIES BELOW AND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 11. REGARDING GROUND NO. 1, WE FIND THAT THE ASSESS EE HAS FILED HIS RETURN OF INCOME ORIGINALLY ON 28.03.2013 WHICH WAS SUBSEQ UENTLY REVISED ON 29.06.2013. THE ORIGINAL RETURN WAS THEREFORE, NOT FILED IN TIME PRESCRIBED U/S 139(1) OF THE ACT. RATHER, IT WAS FILED BELATED LY WELL BEFORE THE END OF THE ASSESSMENT YEAR ON 28.03.2013 AND THEREFORE, IT IS A RETURN FILED U/S 139(4) OF THE ACT. UNDER SECTION 139(5) OF THE ACT, ANY P ERSON HAVING FURNISHED A RETURN U/S 139(1) OR NOT 139(2) MAY FURNISH A REVIS ED RETURN AT ANY TIME BEFORE THE ASSESSMENT IS MADE. THEREFORE, NO REVISE D RETURN CAN BE FILED U/S 139(5) OF THE ACT IN A CASE WHERE THE RETURN WAS OR IGINALLY FILED BELATEDLY U/S 139(4) OF THE ACT. IN THE INSTANT CASE, GIVEN THAT THE RETURN WAS ORIGINALLY FILED U/S 139(4) OF THE ACT, THE SAME CANNOT BE REV ISED U/S 139(5) OF THE ACT. THEREFORE, THE REVISED RETURN FILED BY THE ASSESSEE ON 29.06.2013 HAS RIGHTLY NOT BEEN CONSIDERED BY THE ASSESSING OFFICER. THE S AID ACTION OF THE ASSESSING OFFICER IS ALSO IN CONSONANCE WITH THE DE CISION OF THE HONBLE SUPREME COURT IN CASE OF KUMAR JAGDISH CHANDRA SINH A VS. CIT 86 TAXMAN 122 (SC) WHICH HAS BEEN RELIED BY THE LD. CIT(A). IN LIGHT OF SAME, THE GROUND NO. 1 OF THE ASSESSEES APPEAL IS DISMISSED. 12. REGARDING GROUND NO. 2, THE ASSESSEE HAS CHALLE NGED THE ACTION OF THE ASSESSING OFFICER IN BRINGING TO TAX SALARY INCOME OF RS. 8,59,515/- AND LD. ITA NO. 336/JP/2019 SHRI SUBHASH CHANDRA AGARWAL, KOTA VS. ITO, KOTA 8 CIT(A) RESTRICTING THE SAME TO RS. 6,00,000/- AS AG AINST 1.8 LAKH CLAIMED TO BE RECEIVED BY THE ASSESSEE DURING THE YEAR. AS PER THE ASSESSING OFFICER, THE ASSESSEE WAS A REGULAR EMPLOYEE AS WELL AS SECR ETARY OF KENDRIYA ACADEMY EDUCATIONAL SOCIETY, KOTA AND IN A.Y 2010-1 1, HE HAS SHOWN SALARY INCOME OF RS. 7,16,263/- AND IN SUBSEQUENT ASSESSME NT YEAR 2013-14, HE HAS SHOWN SALARY INCOME OF RS. 10,55,858/-. GIVEN THAT THE ASSESSEE HAS NOT SHOWN ANY SALARY INCOME FOR IMPUGNED ASSESSMENT YEAR, CONSIDERING PAST YEAR SALARY AND 20% INCREMENT FOR THE YEAR UND ER CONSIDERATION, THE ASSESSING OFFICER HAS WORKED OUT THE SALARY INCOME AT RS. 8,59,515/- AND BROUGHT TO TAX THE SAME. AS PER THE LD. CIT(A), THO UGH THE FINDING OF THE AO ALSO LACKS ANY CORROBORATIVE BASIS BUT IT IS ALSO T RUE PRACTICALLY THAT THE APPELLANT HAS BEEN ASSOCIATED WITH THE INSTITUTION IN THE EARLIER YEARS AND HE SHOWN TO HAVE ALSO GENERATED SUFFICIENT CASH RECEIP TS TOWARDS REMUNERATION (AS ALSO CLAIMED IN THE INVALIDATED REVISED RETURN) , WHICH DRIVES HOME THE FACT THAT HE MAY HAVE RECEIVED CERTAIN REMUNERATION WHICH WAS NOT SHOWN FOR TAX PURPOSES AND HE HIMSELF HAS ADMITTED TO RS. 1,80,000/- IN THE COURSE OF FILING THE SO CALLED REVISED RETURN. THE LD. CIT (A) ACCORDINGLY HELD THAT IT WOULD BE REASONABLE TO CONSIDER SALARY INCOME OF RS . 6,00,000/- AS AGAINST RS. 8,59,515/- TAKEN BY THE AO BASED ON PAST RECORD AND THE BALANCE ADDITION WAS DELETED. DURING THE COURSE OF HEARING , THE LD. AR SUBMITTED THAT THE ASSESSEE HAS FILED COPY OF FORM 16 DISCLOS ING THE SALARY INCOME OF RS. 1.8 LAKHS WHICH HAS BEEN RECEIVED BY THE ASSESS EE DURING THE YEAR UNDER CONSIDERATION WHICH HAS BEEN IGNORED BY THE ASSESSI NG OFFICER. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT RECEIVED ANY OT HER SALARY INCOME AND THEREFORE, THERE IS NO BASIS FOR THE ASSESSING OFFI CER TO ESTIMATE THE SALARY INCOME BASIS PAST YEARS. 13. ON PERUSAL OF RECORDS, WE FIND THAT FOR A.Y 20 10-11, THE ASSESSEE HAS SHOWN GROSS SALARY OF RS. 7,25,863/- FROM KENDRIYA VIDHYALAYA EDUCATIONAL ITA NO. 336/JP/2019 SHRI SUBHASH CHANDRA AGARWAL, KOTA VS. ITO, KOTA 9 SOCIETY, KOTA AND IN A.Y 2011-12, THE ASSESSEE HAS SHOWN SALARY INCOME OF RS. 2,40,000/- FROM THE SAME INSTITUTION. HOWEVER, IN THE ORIGINAL RETURN FILED BY THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR, H E HAS NOT SHOWN ANY INCOME UNDER THE HEAD SALARY. THEREAFTER, IN THE RE TURN FILED ON 29.06.2013 (NOT ADMITTED BY THE ASSESSING OFFICER), HE HAS SHO WN SALARY INCOME OF RS. 1.8 LAKH FROM DIVINE SCHOOL, BARAN, RAJASTHAN. FURT HER, ON PERUSAL OF FORM 16 WHICH HAS BEEN ISSUED BY THE NAVIN KENDRIYA SHIK SHA SAMITI, PRATAP NAGAR, BARAN, RAJASTHAN, AN AMOUNT OF RS. 1.8 LAKH HAS BEEN SHOWN TO HAVE BEEN PAID BY THE SAID INSTITUTION TO THE ASSESSEE D URING THE FINANCIAL YEAR RELEVANT TO IMPUGNED ASSESSMENT YEAR. THE RETURN FO R A.Y 2013-14 IS NOT ON RECORD HOWEVER, THE AO HAS STATED IN HIS ORDER THAT THE ASSESSEE HAS RECEIVED AND HAS SHOWN SALARY INCOME OF RS. 10,55,8 58/-. THEREFORE, WE FIND THAT THERE IS FLUCTUATION IN THE SALARY INCOME SO R EPORTED BY THE ASSESSEE FROM YEAR TO YEAR AND THE SAID SALARY INCOME IS ALS O CLAIMED TO HAVE BEEN RECEIVED FROM DIFFERENT INSTITUTIONS. THEREFORE, WE FIND THAT IT IS IMPORTANT TO DETERMINE WHICH ALL INSTITUTIONS, THE ASSESSEE WORK ED FOR DURING THE YEAR UNDER CONSIDERATION AND HOW MUCH SALARY HE HAS BEEN EARNED DURING THE YEAR. IN ABSENCE OF SUFFICIENT FACTS ON RECORD, WE DEEM IT APPROPRIATE TO REMAND THE MATTER TO THE FILE OF THE AO WHO SHALL E XAMINE THE SAME AFRESH AFTER CALLING FROM INFORMATION FROM THE RESPECTIVE INSTITUTIONS AS WELL AS AFTER PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE. IN THE RESULT, THE GROUND NO. 2 OF THE ASSESSEES APPEAL IS ALLOWED FOR STATI STICAL PURPOSES. 14. REGARDING GROUND NO. 3, THE LIMITED ISSUED UNDE R CONSIDERATION RELATES TO DETERMINATION OF RENTAL INCOME DERIVED BY THE AS SESSEE FROM ITS VARIOUS PROPERTIES. GIVEN THAT IN THE RETURN FILED BY THE A SSESSEE, THE ASSESSEE HAS NOT SHOWN ANY RENTAL INCOME RATHER HAS CLAIMED LOSS OF RS. 7,73,744/-, THE AO REFERRED TO THE RETURN FILED BY THE ASSESSEE FOR A.Y 2010-11 WHEREIN THE ASSESSEE HAS SHOWN RENTAL INCOME OF RS 96,000/- FRO M PROPERTY SITUATED AT ITA NO. 336/JP/2019 SHRI SUBHASH CHANDRA AGARWAL, KOTA VS. ITO, KOTA 10 KOTA JUNCTION, KOTA, RENTAL INCOME OF RS. 1.2 LAKH FROM HOUSE NO. 756, PRATAP NAGAR, KOTA, RAJASTHAN AND RENTAL INCOME OF RS. 1.65 LAKHS FROM PROPERTY SITUATED AT DADABARI, KOTA AND ON SUCH BAS IS OF PAST RENTAL INCOME SO DISCLOSED BY THE ASSESSEE FOR A.Y 2010-11 AND IN CREMENT OF 20%, HE HAS DETERMINED THE RENTAL INCOME AT RS. 4,54,200/- WHIC H ON APPEAL HAS BEEN SUSTAINED BY THE LD. CIT(A). 15. DURING THE COURSE OF HEARING, THE LD. AR SUBMIT TED THAT THE ASSESSEE OWNS HOUSE SITUATED AT HOUSE NO. 756, PRATAP NAGAR, KOTA WHICH HAS BEEN LET OUT DURING THE YEAR. THE RENTAL INCOME OF RS. 1 .2 LAKH HAS BEEN SHOWN IN THE REVISED RETURN FILED BY THE ASSESSEE WHICH HAS NOT BEEN CONSIDERED BY THE ASSESSING OFFICER. IT WAS FURTHER SUBMITTED THA T NO RENTAL INCOME WAS DERIVED FROM PROPERTY SITUATED AT DADA BARI, KOTA D URING THE YEAR UNDER CONSIDERATION AND THE OTHER PROPERTY SITUATED AT KO TA JUNCTION, KOTA HAS BEEN SOLD OUT DURING A.Y 2011-12 AND LONG TERM CAPI TAL GAINS HAVE BEEN DULY DISCLOSED IN THE RETURN FILED FOR A.Y 2011-12 WHICH CAN BE VERIFIED FROM RECORDS. 16. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WHERE THE ONLY PROPERTY WHICH HAS BEEN LET OUT IS HOUSE NO. 756, P RATAP NAGAR, KOTA, THE ANNUAL RENTAL VALUE OF RS 1.2 LAKHS WHICH IS CONSIS TENT WITH EARLIER YEAR REPORTING OF RENTAL INCOME FROM THE SAID PROPERTY S HOULD THEREFORE BE CONSIDERED IN ABSENCE OF ANYTHING CONTRARY ON RECOR D. IN RESPECT OF SECOND PROPERTY, IT HAS BEEN SUBMITTED THAT THE SAME WAS N OT RENTED OUT DURING THE YEAR AND THEREFORE, IN VIEW OF THE PROVISIONS OF SE CTION 23(1)(A) R/W 23(1)(C), THE EXPLANATION OF THE ASSESSEE THAT NO RENTAL VALU E CAN BE ESTIMATED IS FOUND TO BE REASONABLE IN ABSENCE OF ANYTHING CONTR ARY ON RECORD. IN RESPECT OF THIRD PROPERTY, IT HAS BEEN SUBMITTED TH AT THE SAME WAS SOLD AND CAPITAL GAINS OFFERED TO TAX DURING AY 2011-12, THE SAME CAN BE VERIFIED BY ITA NO. 336/JP/2019 SHRI SUBHASH CHANDRA AGARWAL, KOTA VS. ITO, KOTA 11 THE AO AND WHERE THE SAME IS FOUND TO BE CORRECT, T HERE CANNOT BE ANY RENTAL VALUE WHICH CAN BE BROUGHT TO TAX FOR THE IM PUGNED ASSESSMENT YEAR. IN THE RESULT, GROUND NO 3 OF ASSESSEES APPEAL IS DISPOSED OFF. 17. REGARDING GROUND NO. 4, DURING THE COURSE OF HE ARING, THE LD. AR OF THE ASSESSEE HAS NOT BEEN PRESSED THIS, HENCE, THE SAME IS DISMISSED BEING NOT PRESSED. 18. REGARDING GROUND NO. 5, BRIEFLY, THE FACTS OF T HE CASE ARE THAT THE AO HAS MADE DISALLOWANCE OF RS. 25% OF EXPENSES CLAIME D TO HAVE BEEN INCURRED BY THE ASSESSEE AS PART OF ITS RUNNING OF HOSTEL PREMISES WHICH HAVE BEEN RENTED TO THE STUDENTS IN ABSENCE OF BOOKS OF ACCOUNTS AND OTHER DETAILS PRODUCED BEFORE HIM WHICH ON APPEAL HAS BEE N RESTRICTED BY THE LD. CIT(A) AT RS. 75,000/-. 19. DURING THE COURSE OF HEARING, THE LD. AR SUBMI TTED THAT THE ASSESSEE HAS RETURNED A PROFIT OF 35% WHICH IS QUITE HIGH AS COMPARED TO PROFIT SHOWN BY OTHER SIMILAR SITUATED ASSESSEES PROVIDING HOSTE L PREMISES TO STUDENTS IN THE CITY OF KOTA AND IT WAS ACCORDINGLY SUBMITTED T HAT THE DISALLOWANCE SO SUSTAINED BY THE LD. CIT(A) MAY BE DELETED. WE FIND THAT 35% PROFIT RATE IS A REASONABLE PROFIT RATE SO DISCLOSED BY THE ASSESSEE AND EVEN THOUGH THE ASSESSEE HAS NOT SUBMITTED THE BOOKS OF ACCOUNTS, E STIMATION OF PROFITS NEEDS TO BE REASONABLE, THEREFORE, TAKING INTO CONS IDERATION THE PROFITABILITY SO SHOWN BY THE ASSESSEE @ 35%, THE ADDITION SUSTAI NED BY THE LD. CIT(A) IS HEREBY DELETED. IN THE RESULT, THE GROUND OF APPEAL IS ALLOWED. 20. REGARDING GROUND NO. 6, THE ASSESSEE HAS PRODUC ED THE LIC CERTIFICATE DURING THE COURSE OF HEARING, BASIS THE SAME, THE A O IS DIRECTED TO ALLOW ITA NO. 336/JP/2019 SHRI SUBHASH CHANDRA AGARWAL, KOTA VS. ITO, KOTA 12 DEDUCTION OF RS. 9,878/- AFTER CARRYING OUT THE NEC ESSARY VERIFICATION. IN THE RESULT, GROUND NO. 6 OF THE ASSESSEES APPEAL IS AL LOWED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISPOS ED OFF WITH ABOVE DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 06/03/2020. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 06/03/2020 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI SUBHASH CHANDRA AGARWAL, KOTA 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD 1(2), KOTA 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 336/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR