RAWAL INVESTMENT P.LTD, MUMBAI V. ITO 7(2)(1), MUMBAI

ITA 4289/MUM/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9098 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-12-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 21-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income

Judgement Text

. , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI , BEFORE SHRI R. K. GUPTA , JM ITA NO. 42 89 / MUM/ 20 1 2 ( ASSESSMENT YEAR : 200 7 - 20 0 8 ) M/S RAWAL INVESTMENT PVT. LTD., 3A,RAWAL HOUSE, 3 RD FLOOR, 47, P.D. MELLO ROAD, MASJID (E), MUMBAI - 400 009 VS. ITO WARD 7 ( 2 )( 1 ) , MUMBAI PAN/GIR NO. : A A ACR 6696 Q ( APPELLANT ) .. ( RESP ONDENT ) /ASSESSEE BY : MR. VIPUL JOSHI & MR. NISHIT GANDHI /REVENUE BY : MR. RAKESH RANJAN DATE OF HEARING : 1 2 TH DEC . , 2012 DATE OF PRONOUNCEMENT : 14 TH DEC. , 2012 O R D E R THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 11 - 1 - 2012 OF LEANED CIT(A) - 13 , MUMBAI RELA TING TO THE ASSESSMENT YEAR 200 7 - 0 8 . 2 . THE ASSESSEE IS OBJECTING IN REGARD TO THE ACTION OF THE CIT(A) IN TREATING THE BUSINESS INCOME AS INCOME FROM HOUSE PROPERTY AND NOT ALLOWING VARIOUS EXPENSES CLAIMED. 3 . THE ASSESSEE SHOWN THE RENT CHARGES RECEIVED AT RS. 3,29 , 632 / - , WAREHOUSE RENT OF RS. 1,08, 000/ - AND SERVICE CHARGES RECEIVED AT RS. 39,920/ - . ITA NO. 42 89 /20 1 2 2 4 . THE AO TREAT ED ALL THESE AMOUNTS AS INCOME FROM HOUSE PROPERTY AND VARIOUS EXPENSES CLAIMED BY TREATING THE INCOME AS BUSINESS INCOME BY THE ASSESSEE WERE DISALLOWED. THE AO WHILE COMPUTING THE INCOME FROM HOUSE PROPERTY, HAS ALLOWED THE MUNICIPAL TAX PAYMENT AND STAT UTORY DEDUCTION OF 30%. 5 . LEARNED CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. NOW, THE ASSESSEE IS IN APPEAL HERE BEFORE THE TRIBUNAL. 6 . LEARNED COUNSEL OF THE ASSESSEE ARGUED THAT RENTAL INCOME AS WELL AS INCOME FROM SERVICE CHARGES IS ASSE SSABLE AS BUSINESS INCOME AS THE ASSESSEE HAS USED WAREHOUSE FOR BUSINESS PURPOSES. 7 . ON THE OTHER HAND, LEARNED DR PLACED RELIANCE ON THE ORDER OF THE AO AND LEARNED CIT(A) . 8 . AFTER HEARING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD, I FOUND THAT THE ASSESSEE IS OWNER OF THE WAREHOUSE. THE RENT CHARGES AND WAREHOUSE CHARGES , THEREFORE, ARE ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. IT IS ALSO A MATTER OF FACT THAT THE RENT RECEIVED FROM ONLY PROPERTY ON MONTHLY BASIS. HOWEVER, I FOUN D THAT SERVICE CHARGES RECEIVED BY THE ASSESSEE ARE ASSESSABLE AS INCOME FROM OTHER SOURCES. WHATEVER THE EXPENSES ARE INCURRED FOR EARNING THE INCOME FROM OTHER SOURCES , THE SAME HAS TO BE ALLOWED AS DEDUCTION AGAINST THE INCOME SHOWN UNDER THE HEAD SERVI CES CHARGES. ON RENTAL INCOME AND ON WAREHOUSE INCOME, THE STATUTORY DEDUCTION ITA NO. 42 89 /20 1 2 3 ARE LIABLE WHICH HAS ALREADY BEEN ALLOWED BY THE AO. ACCORDINGLY, THE AO IS DIRECTED TO ALLOW THE EXPENSES INCURRED FOR EARNING THE INCOME ON ACCOUNT OF SERVICE CHARGES. TO THIS EXTENT, APPEAL OF THE ASSESSEE IS ALLOWED. 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF DEC. 2012. 2012 SD/ - ( ) ( R.K.GUPTA ) / JUDICIAL MEMBER MUMBAI ; DATED : 14 / 1 2 / 2012 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLA NT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI