MALBAR INDUSTRIES P.LTD, MUMBAI V. ITO 5(2)(3), MUMBAI

ITA 4243/MUM/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9281 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 19-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S C TIWARI; NATASHA MANGAT
• Keywords: Business income; Opportunity of being heard
• Section: 143(3); 5(2); 68

Judgement Text

. , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI , BEFORE SHRI R.K.GUPTA , J M ITA NO. 4 243 / MUM/ 20 1 2 ( ASSESSMENT YEAR : 200 8 - 20 0 9 ) M/S MALBAR INDUSTRIES PVT LTD, 101, CHITRAKOOT, 10 TH FLOOR, ALTAMOUNT ROAD, MUMBAI - 400 026 VS. ITO - 5(2) 3 , MUMBAI PAN/GIR NO. : A ACC M 1317 K ( APPELLANT ) .. ( RESPONDENT ) /A SSESSEE BY : MR. S.C.TIWARI & MS. NATASHA MANGAT /RE VENUE BY : MR. MOHIT JAIN DATE OF HEARING : 5 TH DEC ., 2012 DATE OF PRONOUNCEMENT : 12 TH DEC. ,2012 O R D E R THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 19 - 3 - 2012 OF LEANED CIT(A) - 9 , MUMBAI RELA TING TO THE ASSESSMENT YEAR 200 8 - 0 9 . 2 . THE FIRST ISSUE RAISED BY THE ASSESSEE IN ITS APPEAL RELATES TO CONFIRMING THE DISALLOWANCE OF RS. 3,45,877/ - . ITA NO. 4243 /20 1 2 2 3 . IN THIS CASE, THE ASSESSEE HAS FILED ITS RETURN DECLARING LOSS OF RS. 1,00,472/ - . THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) ON A TOTAL INCOME OF RS. 2,9 7 , 096 / - VIDE ORDER DATED 30 - 12 - 2010. THE ASSESSING OFFICER TREATED THE LEASE R ENT INCOME FROM HOUSE PROPERTY BY OBSERVING THAT SO MANY OPPORTUNITIES WERE GIVEN TO THE ASSESSEE, HOWEVER, THEY ARE NOT FILLED, THEREFORE, PASSED AN ORDER UNDER SECTION 1 4 3(3) AND THE BUSINESS INCOME SHOWN WAS TREATED AS INCOME FROM HOUSE PROPERTY. SIMILA R VIEW HAS BEEN EXPRESSED BY THE LEARNED CIT(A) AND HE ALSO CONFIRMED THE ORDER THE ASSESSING OFFICER. 4 . LEARNED AR OF THE ASSESSEE STATED THAT FOR THE ASSESSMENT YEAR 2001 - 02, THE CONTENTION OF THE ASSESSEE HAS BEEN ACCEPTED THAT THE LEASE RENT IS ASSES SABLE AS BUSINESS INCOME, BECAUSE THE ASSESSEE IS NOT THE OWNER OF THE BUILDING. COPY OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2001 - 02 HAS ALSO BEEN FILED. ON THE OTHER HAND, LEANED DR PLACED RELIANCE ON THE ORDER OF THE LEARNED CIT(A) 5 . AFTER CON SIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD, I FOUND THAT THE ASSESSEE DESERVES TO SUCCEED ON THIS ISSUE IN PART. THE ASSESSMENT FOR THE ASSESSMENT YEAR 200 1 - 02 WAS COMPLETED UNDER SECTION 143(3) . THE ASSESSEE HAS SHOWN LEASE RENT OF R S. 4,2 0,324/ - FOR THE ASSESSMENT YEAR 2001 - 02. THE ASSESSING OFFICER PROPOSED TO ASSESS THE SAME UNDER SECTION 22 OF THE ACT, HOWEVER HAD CONSIDERED THE EXPLANATION OF THE ASSESSEE. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE LEASE RENT IS ASSESSABLE UNDER TH E BUSINESS ITA NO. 4243 /20 1 2 3 HEAD AS THE ASSESSEE IS NOT THE OWNER OF THE BUILDING IN QUESTION, HOWEVER, HE DISALLOWED 50% OF EXPENSES. IN TH IS YEAR ALSO, THE SAME FACTS ARE INVOLVED. LOOKING TO THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE, I DIRECT THE ASSESSING OFFI CER TO ACCEPT THE EXPLANATION OF THE ASSESSEE IN VIEW OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2001 - 02. HOWE VER, EXPENSES WILL BE ALLOWED O F 50% AS THE LEARNED AR HAS AGREED THAT ON THE BASIS OF THE ASSESSMENT YEAR 2001 - 02, THE EXPENSES FOR THE YEAR UND ER CONSIDERATION ALSO CAN BE DISALLOWED AT 50%. I ORDER ACCORDINGLY. 6 . THE NEXT ISSUE IS AGAINST CONFIRMING THE ADDITION OF RS. 1,38,000/ - UNDER SECTION 68. 7 . THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS DEPOSITED RS. 1,38,000/ - IN ITS BOOKS OF ACC OUNTS. NO SOURCE OF DEPOSIT WAS FILED BEFORE THE ASSESSING OFFICER. THEREFORE, THE SAME WAS ADDED UNDER SECTION 68 AND FOR THE SAME REASON, LEARNED CIT(A) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 8 . LEARNED AR OF THE ASSESSEE STATED THAT THE ASS ESSEE MAINTAINED COMPLETE BOOKS OF ACCOUNTS AND CASH AVAILABLE IN THE BOOKS OF ACCOUNT WAS DEPOSITED IN THE BANK . SINCE THE ASSESSEE COULD NOT APPEAR BEFORE THE ASSESSING OFFICER, THEREFORE, THE SAME COULD NOT BE PRODUCED. ACCORDINGLY, IT IS STATED THAT TH E MATTER CAN BE SENT BACK TO THE FILE OF THE ASSESSING OFFICER FOR NECESSARY VERIFICATION. ITA NO. 4243 /20 1 2 4 9 . IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER THIS ASPECT AFRESH AFTER AFFORDI NG REASONABLE OPPORTUNITY OF BEING HEARD. I ORDER ACCORDINGLY. 10 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF DEC. 2012. 2012 SD/ - ( ) ( R.K.GUPTA ) / JUDICIAL MEMBER MUMBAI ; DATED : 12 /12 / 2012 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) - X, MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI