BHAGAT HOUSING DEVELOPMENT P.LTD, THANE V. DCIT RG 3(1), MUMBAI

ITA 4158/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9997 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 06-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Assessee Lawyers: BRIJMOHAN P AGARWAL
• Section: 143(3); 142(1)

Judgement Text

1 ITA NO. 4158/MUM/2015 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B,MUMBAI BEFORE SHRI D.T. GARASIA (JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) ITA NO.4158 /MUM/2015 (ASSESSMENT YEAR: 20110-12) M/S BHAGAT HOUSING DEVELOPMENT PVT LTD, MAHARASHTRA MFG CORPORATION, C-31, ROAD NO.16, WAGLE INDUSTRIAL ESTATE, THANE (W)-400 604 PAN : AAACCB5503G VS DCIT, RANGE 3(1), MUMBAI-604 APPELLANT RESPONDENT APPELLANT BY SHRI BRIJMOHAN P AGARWAL RESPONDENT BY SHRI SUMAN KUMAR DATE OF HEARING 22 -06-2017 DATE OF PRONOUNCEMENT 30- 06-2017 O R D E R PER G MANJUNATHA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE CIT(A)-8, MUMBAI DATED 27-03-2015 AND IT PERTAINS T O ASSESSMENT YEAR 2011- 12. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE C OMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 ON 30-09- 2011 DECLARING TOTAL INCOME OF RS.69,30,908. THE CASE WAS SELECTED FOR SCRUTINY AND STATUTORY 2 ITA NO. 4158/MUM/2015 NOTICES U/S 143(2) AND 142(1) OF THE ACT WERE ISSUE D. IN RESPONSE TO THE NOTICES, AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FURNISHED THE DETAILS, AS CALLED FOR. THE ASSE SSMENT WAS COMPLETED U/S 143(3) DETERMINING THE TOTAL INCOME OF RS.3,96,30,2 20 INTERALIA MAKING ADDITIONS TOWARDS INTEREST INCOME, RENTAL INCOME AN D DONATION EXPENSES. WHILE COMPLETING THE ASSESSMENT, THE AO MADE ADDITI ONS OF RS.20,89,559 TOWARDS INCOME FROM HOUSE PROPERTY ON ACCOUNT OF DI FFERENCE IN RENTAL INCOME OFFERED BY THE ASSESSEE IN ITS RETURN OF INC OME AND THE RENTAL INCOME APPEARED IN FORM 26AS OF THE DATA BASE OF DEPARTMEN T. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). HOWEVER, THE CIT(A) SUSTAINED ADDITIONS MADE BY THE AO. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE U S. 3. THE LD.AR FOR THE ASSESSEE SUBMITTED THAT THE LD.AO WAS ERRED IN MAKING ADDITION OF RS.20,89,559 AS RENTAL INCOME WITHOUT C ONSIDERING THE FACT THAT THE ASSESSEE WAS NOT OWNER OF THE SAID PROPERTY AND THE SAME WAS ALSO OFFERED TO TAX BY THE REAL OWNER. THE LD.CIT(A), WITHOUT APPR ECIATING THE FACTS SIMPLY UPHELD THE ADDITIONS MADE BY THE AO DESPITE THE FAC T THAT THE ASSESSEE IS NOT THE OWNER OF THE PROPERTY IN RESPECT OF RENT APPEAR ED IN FORM 26AS AND ALSO THE ASSESSEE HAS FILED NECESSARY EVIDENCES OF OTHER PARTY OFFERING SUCH RENTAL INCOME IN ITS INCOME-TAX RETURN. ON THE OTHER HAND , THE LD.DR STRONGLY 3 ITA NO. 4158/MUM/2015 SUPPORTED THE ORDER OF THE LD.CIT(A). 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIALS AVAILABLE ON RECORD. THE FACTUAL MATRIX OF THE ISSUE, WHICH GOE S TO THE IMPUGNED ADDITION ARE THAT THE ASSESSEE HAS RECEIVED RENTAL INCOME OF RS.79,54,167 FROM M/S SURYA VINAYAK WELLNESS LTD. HOWEVER, IT HAS SHOWN RENTAL INCOME OF RS.58,64,608 IN THE P&L ACCOUNT. THE ASSESSEE CLAI MS THAT IT HAD SOLD THE PROPERTY TO ONE MR. ATUL MADAN IN JULY, 2010 AND TH E RENT RECEIVED, IF ANY, AFTER THE DATE OF TRANSFER HAS BEEN RECEIVED BY THE PURCHASER OF THE PROPERTY WHEREAS THE TENENT, M/S SURYA VINAYAK WELLNESS LTD HAS DEDUCTED TDS IN THE NAME OF THE ASSESSEE. THE AO MADE ADDITIONS ON THE GROUND THAT THERE IS A DIFFERENCE BETWEEN RENTAL INCOME OFFERED BY THE ASS ESSEE AND RENTAL INCOME APPEARED IN FORM 26AS. IT IS THE CLAIM OF THE ASSE SSEE THAT IT HAS RECEIVED RENTAL INCOME OF RS.48,64,608 AND THE REMAINING BAL ANCE AMOUNT OF RS.20,89,559 HAS BEEN RECEIVED BY MR. ATUL MADAN. 5. HAVING HEARD BOTH THE SIDES AND HAVING CONSIDERED T HE MATERIALS ON RECORD WE FIND THAT THE AO HAS MADE ADDITIONS SOLEL Y ON THE BASIS OF RENTAL RECEIPTS APPEARED IN FORM 26AS WITHOUT CONSIDERING THE EXPLANATION OF THE ASSESSEE THAT THE REMAINING PORTION OF RENT HAS BEE N RECEIVED BY MR. ATUL MADAN AND THE SAME HAS BEEN CONSIDERED IN HIS INCOM E-TAX RETURN FOR THE RELEVANT ASSESSMENT YEAR. NO DOUBT, WHEN THERE IS A MISTAKE IN FORM 26AS, 4 ITA NO. 4158/MUM/2015 THE ASSESSEE REQUIRES TO FILE REVISED PARTICULARS O F TDS DEDUCTIONS TO RECTIFY THE MISTAKES APPEARED IN FORM 26AS. HOWEVER, ADDITION CANNOT BE MADE MERELY FOR THE REASON THAT THE ASSESSEE DID NOT RECTIFY TH E MISTAKES APPEARED IN FORM 26AS INSPITE OF FURNISHING NECESSARY EVIDENCES THAT THE OTHER PARTY HAS DECLARED THE RENT IN HIS INDIVIDUAL RETURN OF INCOM E. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE ISSUE NEEDS TO BE RE-EXAMI NED BY THE AO IN THE LIGHT OF THE CLAIM OF THE ASSESSEE THAT IT HAS SOLD THE P ROPERTY IN THE MONTH OF JULY, 2010 AND THE REMAINING AMOUNT OF RENT HAS BEEN RECE IVED BY THE PURCHASER OF THE PROPERTY. THEREFORE, WE SET ASIDE THE ISSUE TO THE FILE OF THE AO AND DIRECT THE AO TO CONDUCT NECESSARY ENQUIRIES BEFORE MAKING ANY ADDITION. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED, FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE, 2017 SD/- SD/- (D.T. GARASIA) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 30 TH JUNE, 2017 COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT 5. DR /TRUE COPY/ ASSTT. REGISTRAR, ITAT, MUMBAI