V. KARE PROPERTIES P.LTD, MUMBAI V. ITO (3)(1), MUMBAI

ITA 4290/MUM/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9117 (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; Depreciation

Judgement Text

. , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI , BEFORE SHRI R. K. GUPTA , JM ITA NO. 4290 / MUM/ 20 1 2 ( ASSESSMENT YEAR : 200 7 - 20 0 8 ) M/S V.KARE PROPERTIES PVT. LTD., 3A,RAWAL HOUSE, 3 RD FLOOR, 47 P.K.MELLO ROAD, MASJID (E), MUMBAI - 400 009 VS. ITO WARD 7 ( 3 )( 1 ) , MUMBAI PAN/GIR NO. : A A B C V 8852 F ( APPELLANT ) .. ( RESPO NDENT ) /ASSESSEE BY : MR. VIPUL JOSHI /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 WAREHOUSING INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY INSTEAD OF BUSINESS INCOME. 3 . THE ASSESSEE HAS A GODOWN CONSTRUCTED ON A PLOT OWNED BY THE ASSESSEE AND THE SAME WAS RENTED OUT TO ONE PARTY FROM WHOM A SUM OF RS.1,08, 000 / - WAS RECEIVED AS RENT, HOWEVER, THE SAME WAS SHOWN AS INCOME IN THE BUSINESS INCOME. THE ASSESSEE HAS SUBMITTED OTHER ITA NO. 4290 /20 1 2 2 INCOME I.E. ON ACCOUNT OF GIVING VACANT LAND TO VARIOUS PERSONS TO PART THEIR TRUCKS AND EARNED A SUM OF RS. 1,08,750/ - . THE PROFIT AND LOSS ACCOUNT WAS PREPARED AND A LOSS OF RS. 33,174/ - WAS CLAIMED AFTER DEDUCTING DEPRECIATION ON THE BUILDING AND SOME OTHER CHARGES PAID BY THE ASSESSEE ON ACCOUNT OF ADMINISTRATIVE EXPENSES ETC. 4 . THE AO TREATED THE RENTAL INCOME AS INCOME FROM HOUSE PROPERTY AND INCOME EARNED ON ACCOUNT OF PAR KING CHARGES WAS TREATED AS INCOME FROM OTHER SOURCES. THE DEPRECIATION OF RS. 1,49,338/ - WAS ALSO DISALLOWED. IN THIS WAY, THE TOTAL INCOME WAS COMPUTED AT RS. 2,95,864/ - AGAINST LOSS OF RS.33,174/ - SHOWN BY THE ASSESSEE. 5 . LEARNED CIT(A) CONFIRMED THE AC TION OF THE ASSESSING OFFICER. 6 . AFTER HEARING THE RIVAL SUBMISSIONS, I FOUND THAT THE AO HAS NOT COMPUTED THE INCOME PROPERLY. WHILE COMPUTING LOSS OF RS. 33,174/ - , THE ASSESSEE HAS SHOWN RENTAL INCOME AS WELL AS TRUCK PARKING CHARGES IN THE PROFIT AND LO SS ACCOUNT, WHEREAS THE AO HAS ADDED THE SAME SEPARATELY. IT MEANS THE DOUBLE ADDITION HAS BEEN MADE. NO DOUBT, THE RENTAL INCOME HAS TO BE ASSESSED AS INCOME FROM HOUSE PROPERTY AND INCOME FROM TRUCK PARKING CHARGES HAS TO BE ASSESSED AS INCOME FROM OTHER SOURCES. WHATEVER THE EXPENSES ARE INCURRED FOR EARNING THE TRUCK PARKING CHARGES HAS TO BE ALLOWED AND NO OTHER EXPENSES IS ALLOWABLE UNDER THE HEAD RENTAL INCOME EXCEPT STATUTORY DEDUCTION @30% . D EPRECIATION IS ALSO NOT ALLOWABLE. LEARNED AR HAS ALSO FA IRLY CONCEDED THAT THE DEPRECIATION IS NOT ALLOWABLE ON THE ITA NO. 4290 /20 1 2 3 BUILDING. ACCORDINGLY, I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE MATTER TO THE FILE OF THE AO TO RECOMPUTED THE INCOME IN VIEW OF MY OBSERVATION AS ABOVE. I ORDER ACCORDINGLY . 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 1 4 TH DAY OF DEC. 2012. 2012 SD/ - ( ) ( R.K.GUPTA ) / JUDICIAL MEMBER MUMBAI ; DATED : 1 4 / 1 2 / 2012 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 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