Gayatri Senapati, Bhubaneswar V. ITO, Bhubaneswar

ITA 447/CTK/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4443 (ITAT-CUTTACK)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 26-04-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 15-12-2010
• Court: TRIBUNAL
• Department Lawyers: J KHANRA
• Assessee Lawyers: D K SETHM SETH ARS
• Section: 234B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO , JUDICIAL MEMBER / I.T.A.NO. 447 AND 448/CTK/2010 / ASSESSMENT YEAR 2005 - 06 AND 2006 - 07 GAYATRI SENAPATI, PLOT N O .A/402, MOTI PLAZA, SATYANAGAR, BHUBANESWAR 751 001 PAN: ADQPS 3883 E - - - VERSUS - INC OME - TAX OFFICER, WARD 1(1), BHUBANESWAR. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI D.K.SETH/M.SETH, ARS / FOR THE RESPONDENT: / SHRI J.KHANRA, DR / ORDER . . , , SHRI K.K.GUPTA, ACCOUNTANT MEMBER. THESE APPEALS BY THE ASSESSEE AGITATES THE ACTION OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) IN CONFIRMING COMPUTATION OF INCOME FROM HOUSE PROPERTY AS ASSESSED BY THE ASSESSING OFFICER FOR THE AS SESSMENT YEARD 2005 - 06 AND 2006 - 07 WHICH WAS OTHERWISE RENDERED TO TAXATION BY THE ASSESSEE FOR THE IMPUGNED AYS BY SPLITTING THE ANNUAL LETTING OUT VALUE RECEIVED FOR THE PURPOSE OF RENT AND THE SERVICE CHARGES SEPARATELY CLAIMING REIMBURSEMENT AS PER THE CLAUSE IN THE LEASE DEED. 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED TO TREAT THE RECEIPT S AS BIFURCATED BY THE ASSESSEE TO BE TAXED AS SERVICE CHARGES RECEIVED AGAINST WHICH NO EXPENSES COULD BE ALLOWE D. THE LEARNED CIT(A) ON THE OTHER HAND NOTED THAT THE ASSESSING OFFICER HAD TREATED THE ENTIRE AMOUNT RECEIVED FROM THE TENANT AS RENT AS WELL AS SERVICE CHARGES WERE REIMBURSED TO THE LESSOR ON WHICH 30% STATUTORY I.T.A.NO. 447 AND 448/CTK/2010 2 DEDUCTION U/S.24 HAS BEEN ALLOWED WAS SU FFICIENT TO MEET THE EXPENSES AS CLAIMED OTHERWISE AGAINST WHICH NO SUBSTANTIAL ACCOUNT OR VOUCHERS HAD BEEN PRODUCED BEFORE THE ASSESSING OFFICER OR THE LEARNED CIT(A). THE LEARNED CIT(A) OBSERVED THAT CLAIMING OF DEDUCTION U/S.24 WAS EXHAUSTIVE AND THERE FORE, THE COMPOSITE RECEIPTS OF RENT AND SERVICE CHARGES WAS APPROPRIATE FOR THE PURPOSE OF COMPUTING THE INCOME FROM HOUSE PROPERTY. HE NOTED THAT T HE ASSESSEES COMPUTATION OF REIMBURSEMENT OF SERVICE CHARGES AS INCOME FROM OTHER SOURCES WAS WITHOUT ANY BASIS AND UNJUSTIFIED. 3. THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE TAXATION OF HOUSE PROPERTY INCOME UNDER TWO DIFFERENT HEADS WAS ON THE BASIS OF DETERMINED ANNUAL LETTING OUT VALUE AS PER THE LEASE DEED. THE ASSESSING OFFICER HIMSELF NO TED THAT THE RENT WAS FIXED FOR 8 000 SFT ALLOTTED AREA @ 9 PER S FT PER MONTH THEREFORE SH OULD NOT HAVE COMBINED THE REIMBURSEMENT OF SERVICE CHARGES TO COMPUTE THE INCOME FROM HOUSE PROPERTY AS THE ANNUAL LETTING OUT VALUE WAS NOT IN ACCORDANCE WITH THE L EASE DEED. THE LEARNED CIT(A) THEREFORE INDICATED THAT THE 30% STATUTORY DEDUCTION COMPLIED TO THE REIMBURSEMENT AS PER THE LEASE DEED REQUIRED NO FURTHER DELIBERATION. HE PRAYED THAT A SUITABLE DIRECTION TO THE AUTHORITIES BELOW MAY BE GIVEN ON THE BASIS OF UNDISPUTED FACTS MENTIONED ABOVE. HE LEFT IT AT THE DISCRETION OF THE BENCH FOR CONSIDERATION OF PAYMENT OF TAX SUBJECT TO INTEREST U/S.234A, 234B AND 234C , AFTER CONSIDERATION OF THE TDS WHICH CERTIFICATE COULD NOT BE PRODUCED AS THE SAME HAD NOT BEE N GIVEN TO THE ASSESSEE BY THE TENANT. 4. THE LEARNED DR OPPOSED THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. HE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW W HO HAVE CONSIDERED ALL THE ASPECTS LEADING TO THE FINDING OF THE SPLITTING OF ANNUA L I.T.A.NO. 447 AND 448/CTK/2010 3 LETTING OUT VALUE BY THE ASSESSE FOR THE PURPOSE OF CLAIMING EXPENSES WHICH WERE TO BE BORNE BY THE LESSEE. THE PLEA OF THE LEARN ED COUNSEL FOR THE ASSESSEE TO JOINTLY INCUR THE EXPENDITURE AND THE INDIVIDUAL TENANT WOULD NOT HAVE IDENTIFIED THE RECIPIEN TS OF SALARY AND OTHER MAINTENANCE CHARGES IS OF NO AVAIL AS THE DETAILS THEREOF WAS NEVER FURNISHED BEFORE THE ASSESSING OFFICER OR THE LEARNED CIT(A). IN OTHER WORDS, HE SUBMITTED THAT THE STATUTORY DEDUCTION U/S.24 @30% MET THE REQUIREMENT OF THE ASSES SEE TO THE EXTENT THAT THE COMPLIANCE OF THE LEASE DEED WAS TO BE THE BASIS FOR SPLITTING THE SERVICE CHARGES REIMBURSEMENT AGAINST WHICH THE ASSESSEE INTENDED TO SHOW EXCESS OF INCOME OVER EXPENDITURE FOR THE IMPUGNED AYS AGAINST THE SPIRIT OF THE LEASE D EED THE ASSESSEE HAD RENDERED THE SAME AS INCOME FROM OTHER SOURCES THEREFORE WAS RIGHTLY COMBINED FOR THE PURPOSE OF COMPUTATION OF INCOME FROM HOUSE PROPERTY BY THE ASSESSING OFFICER AND HAS BEEN UPHELD BY THE LEARNED CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON OUR CAREFUL CONSIDERATION OF THE FACTS, WE DO NOT FIND ANY INFIRMITY IN THE CONTENTION OF THE LEARNED AR OF THE ASSESSEE ON THE FACTS AND CIRCUMSTANCES WHICH HAVE BEEN CONSIDERED AT LENGTH BY THE ASSESSING OFFICER AND THE LEARNED CIT(A). THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT BEEN ABLE TO CONTROVERT THE FACTS AS HAVE BEEN BROUGHT ON RECORD THEREFORE REQUIRES NO FURTHER DELIBERATION FOR THE PURPOSE OF DETERMINING THE ANNUAL LETTING OUT VALUE TO BE SPLITTED AND CONSIDERED AGAINST THE PROVISIONS OF THE I.T.ACT. THE SPLITTING OF SERVICE CHARGES TO BE RENDERED AS INCOME FROM OTHER SOURCES CLINCHES THE ISSUE AGAINST THE ASSESSEE INSOFAR AS THE CLAIM OF DEDUCTION U/S.24 AT 30% BY THE ASSESSING OFFICER HAS BEEN ADHERED TO AND NOT DISPUTED. THE APPEALS FILED BY THE ASSESSEE ARE, THEREFORE, BOUND TO BE I.T.A.NO. 447 AND 448/CTK/2010 4 DISMISSED AND THE SAME ARE DISMISSED. 6. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE A RE DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 28 TH APRIL, 2011 S D/ - S D/ - ( . . . ) , ( K.S.S.PRASAD RAO), JUDICIAL MEMBER ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( ) DAT E: 28 TH APRIL, 2011 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : GAYATRI SENAPATI, PLOT NO.A/402, MOTI PLAZA, SATY ANAGAR, BHUBANESWAR 751 001 2 / THE RESPONDENT: INCOME - TAX OFFICER, WARD 1(1), BHUBANESWAR. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, [ ] SENIOR PRIVATE SECRETARY ( ), ( H.K.PADHEE ), SENIOR.PRIVATE SECRETARY.