ITO, New Delhi V. M/s. Logistician Search Pvt. Ltd., New Delhi

ITA 4428/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0289 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 28-02-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 04-10-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SRUJANI MOHANTY SENIOR
• Keywords: Business income; Opportunity of being heard; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.4428/DEL./2010 (ASSESSMENT YEAR : 2007-08) ITO, WARD 4 (4), VS. M/S. LOGISTICIAN SEARCH PVT. LTD., NEW DELHI. P 65, 3 RD FLOOR, SOUTH EXTN. PART 2, NEW DELHI. (PAN : AAACL7297H) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SMT. SRUJANI MOHANTY, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT (APPEALS)-VII, NEW DELHI DATED 28.7.2010. THE GRO UNDS OF APPEAL READ AS UNDER :- 1. THE ORDER OF THE LEARNED CIT (APPEALS) IS ERRON EOUS & CONTRARY TO FACTS & LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT (APPEALS) HAS ERRED IN DIRECTING T HE A.O. TO TREAT INCOME OF RS.9,00,000/- AS INCOME FROM HOUSE PROPERTY AS AGAINST BUSINESS INCOME TREATED BY THE A.O. AND THE ASSESSEE IN ITS I.T. RETURN. 2.1 THE LD. CIT (A) IGNORED THE FACT THAT THE ASSES SEE DID NOT FILE REVISED RETURN TO CLAIM THE DEDUCTION U/S 23 O F THE I.T. ACT, 1961. ITA NO.4428/DEL./2010 2 3. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR A MEND ANY GROUNDS OF THE APPEAL RAISED ABOVE AT THE TIME OF H EARING. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI LED RETURN IN THE ASSESSMENT YEAR 2007-08 ON 30.10.2007 WHICH WAS PRO CESSED AND THEREAFTER SELECTED FOR SCRUTINY ASSESSMENT. DURING THE YEAR, THE ONLY INCOME DERIVED BY THE ASSESSEE IS RENTAL INCOME OF RS.9 LACS ON THE L EASEHOLD PROPERTIES LOCATED AT 4, MUNIRKA MARG, NEW DELHI. THIS PROPERTY WAS P URCHASED AND REGISTERED DURING THE YEAR. IN THE RETURN, THE ASSESSEE HAS S HOWN AS BUSINESS INCOME. HOWEVER, HE CLAIMED THE SAME AS INCOME FROM HOUSE P ROPERTY DURING THE ASSESSMENT PROCEEDINGS AND ALSO SUBMITTED A REVISED COMPUTATION OF INCOME. THE ASSESSING OFFICER DID NOT ENTERTAIN THE CLAIM B Y FOLLOWING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF GOETZ (INDIA) LIMITED 284 ITR 323. THE CIT (A) GRANTED THE RELIEF BY HOLDING THAT NEIT HER THE NATURE OF PROPERTY BEING STOCK-IN-TRADE NOR THE NATURE OF RENTAL INCOM E EARNED FROM THE PROPERTY BEING INCIDENTAL TO THE ASSESSEES MAIN BUSINESS IS RELEVANT TO DECIDE THE HEAD UNDER WHICH THE RENTAL INCOME IS ASSESSABLE TO TAX. ONCE IT IS ESTABLISHED THAT THE ASSESSEE IS THE OWNER OF THE SAID PROPERTY AND THE RENTAL INCOME IS EARNED BY HIM IN HIS CAPACITY AS OWNER, THE SAME IS TO BE ASSESSED TO TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 3. NONE ATTENDED ON BEHALF OF THE ASSESSEE. HOWEVE R, THE LEARNED DR SUBMITTED THAT CIT (A) HAS NOT CONSIDERED THE ISSUE ON MERITS. SIMILARLY, THE ASSESSING OFFICER HAS ALSO NOT CONSIDERED THE ISSUE ON MERITS AS IT IS CLEAR FROM THE ORDER OF ASSESSING OFFICER THAT HE HAS DIS ALLOWED THE CLAIM BY RELYING ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LIMITED, CITED SUPRA. HE SUBMITTED THAT T HE CIT (A) HAS ALSO NOT CONSIDERED THE ISSUE ON MERITS AND SIMPLY FOLLOWED THE DECISION OF HON'BLE SUPREME COURT AND HIGH COURT WHEREIN IT HAS BEEN DE CIDED THAT WHEN THE ITA NO.4428/DEL./2010 3 ASSESSEE IS A OWNER OF THE PROPERTY THEN THE RENTAL INCOME RECEIVED FROM THE SAID PROPERTY IN HIS CAPACITY AS OWNER, THE SAME IS TO BE TAXED UNDER THE SPECIFIC HEAD INCOME FROM HOUSE PROPERTY AND SHE VE HEMENTLY PLEADED THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF T HE ASSESSING OFFICER TO DECIDE ON MERITS ABOUT THE HEAD OF THE INCOME. 4. AFTER HEARING THE REVENUE AND CONSIDERING THE RE CORDS, WE FIND THAT IN THE INTEREST OF JUSTICE AND EQUITY, IT SHALL BE PRO PER THAT THE ISSUE IS REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE ISSUE ON MERITS AFTER PROVIDING A REASONABLE OPPORTUNITY OF BEING HEARD T O THE ASSESSEE. WE ORDER ACCORDINGLY AND THE ASSESSING OFFICER IS DIRECTED T O DECIDE THE ISSUE AS PER LAW. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 28 TH DAY OF FEBRUARY, 2011. SD/- SD/- (C.L. SETHI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 28 TH DAY OF FEBRUARY, 2011 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-VII, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.