KOTECHA & CO., MUMBAI V. ITO 12(1)(3), MUMBAI

ITA 4739/MUM/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9311 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 06-12-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 17-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PRASAD BAPAT
• Keywords: Reopening of assessment; Difference of opinion; Change of opinion
• Section: 143(3); 147; 148

Judgement Text

. , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI , BEFORE SHRI R.K.GUPTA , J M ITA NO. 4739 / MUM/ 20 1 2 ( ASSESSMENT YEAR : 200 5 - 20 0 6 ) M/S KOTECHA & CO., 231 DR. D.N.ROAD, FORT, MUMBAI - 1 VS. ITO WARD 12 ( 1 )( 3 ), MUMBAI PAN/GIR NO. : A ADFK 7430 R ( APPELLANT ) .. ( RESPONDENT ) /A SSESSEE BY : MR. PRAS AD BAPAT /RE VENUE BY : MR. MOHIT JAIN DATE OF HEARING : 6 TH DEC ., 2012 DATE OF PRONOUNCEMENT : 12 TH DEC. ,2012 O R D E R THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGA INST THE ORDER DATED 11 - 5 - 2012 OF LEANED CIT(A) - 23 , MUMBAI RELA TING TO THE ASSESSMENT YEAR 2005 - 0 6 . 2 . THE ASSESSEE IS OBJECTING THE INACTION ON THE PART OF THE LEARNED CIT(A) IN CONFIRMING THE DISALLOWANCE OF NET OUTGOING CHARGES OF RS. 1,54,989/ - PAID T O THE SOCIETY. 3 . IN THIS CASE, THE ASSESSMENT WAS COMPLETED ON 14 - 12 - 2007 UNDER SECTION 143(3) . THEREAFTER ON PERUSAL OF RECORD, IT WAS OBSERVED ITA NO. 4 739 /20 1 2 2 THAT THE ASSESSEE IS SHOWING HOUSE PROPERTY INCOME BY ADDING OUTGOING CHARGES PAID OF RS. 3,27,794/ - AND REDUC ING OUTGOING CHARGES RECOVERED OF RS. 1,72, 805/ - . THE NET EFFECT WAS ADDITIONAL DEDUCTION ALLOWED TO THE ASSESSEE OF RS. 1,54,989/ - . THE ASSESSING OFFICER NOTED THAT AS PER PROVISION OF SECTION 24(1)(A) NO EXPENSES OTHER THAN 30% OF NET ANNUAL VALUE IS ALLOW ABLE TO THE ASSESSEE. IN THIS WAY, EXCESS DEDUCTION HAS BEEN ALLOWED AT RS. 1,54,989/ - . ACCORDINGLY, HE REOPENED THE ASSESSMENT UNDER SECTION 147 AND A NOTICE UNDER SECTION 148 WAS ISSUED ON 30 - 3 - 2010. IN RESPONSE TO THE SAME, A LETTER WAS FILED STATING THE REIN THAT THE ORIGINAL RETURN FILED MAY BE TREATED AS FILED IN RESPONSE TO NOTICE UNDER SECTION 148. THEREAFTER AFTER TAKING EXPLANATION , THE ASSESSING OFFICER FOUND THAT THE EXCESS CLAIM TO BE DISALLOWED AFTER DEDUCTION AT THE RATE OF 30%. NO OTHER OUTGO ING ON ACCOUNT OF MAINTENANCE CHARGES CAN BE ALLOWED. 4 . BEING AGGRIEVED WITH THE SAME, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A) CHALLENGING THE REOPENING OF ASSESSMENT AS WELL AS ADDITION ON MERIT. LEARNED CIT(A) ALSO FOUND THAT REOPEN ING AS WELL AS ADDITION MADE BY THE AO IS JUSTIFIED. ACCORDINGLY, HE CONFIRMED THE ORDER OF THE ASSESSING OFFICER. NOW, THE ASSESSEE IS IN APPEAL HERE BEFORE THE TRIBUNAL. 5 . AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE IN RESPECT TO REOPENING OF THE ASSESSMENT AS WELL AS ON MERIT, AND THE ORDERS OF THE AUTHORITIES BELOW ON WHICH RELIANCE HAS BEEN PLACED BY LEARNED DR, I ITA NO. 4 739 /20 1 2 3 FOUND THAT THERE IS NO MERIT IN THE ARGUMENT OF THE LEARNED AR IN RESPECT TO REOPENING OF THE ASSESSMENT. THE ASSESSMENT HAS BEEN REO PENED WITHIN FOUR YEARS. THE ASSESSMENT CAN BE REOPENED IF THE ASSESSING OFFICER FOUND THAT ANY INCOME AS ESCAPED ASSESSMENT. THE ASSESSING OFFICER NOTED THAT AFTER ALLOWING DEDUCTION AT THE RATE OF 30% IN VIEW OF THE PROVISION OF SECTION 24(1)(A) , NO OTHE R DEDUCTION CAN BE ALLOWED IN RESPECT OF EXPENSES INCURRED ON REPAIR AND ETC. THE CLAIM OF THE ASSESSEE IS THAT THE ASSESSEE IS CHARGING REPAIR EXPENSES FROM THE MEMBERS AND INCURRING EXPENSES FOR MAINTENANCE OF THE SOCIETY. THEREFORE, WHATEVER THE EXCESS EXPENSES WERE INCURRED, THEY ARE ALLOWABLE FOR THE DEDUCTION. IN MY OPINION , THE ACTION OF THE ASSESSING OFFICER IS CORRECT AS THE ASSESSEE HAS ALREADY BEEN ALLOWED 30% AND THE EXPENSES INCURRED ON ACCOUNT OF MAINTENANCE AND REPAIR IN VIEW OF THE SECTION 2 4 OF THE ACT. WHATEVER THE REPAIR EXPENSES HAS BEEN INCURRED, THAT HAVE BEEN TAKEN CARE OF BY DEDUCTION @30%. AS PER PROVISION OF LAW, NO FURTHER DEDUCTION IS ALLOWABLE. THER EFORE, IN MY VIEW, THE EXCESS DEDUCTION WHICH WAS ALLOWED BY THE AO INADVERTENTLY ESCAPED ASSESSMENT. THE AO HAS NOT EXPRESSED HIS OPINION AS NO FINDING HAS BEEN RECORDED AS TO WHY HE IS ALLOWING DEDUCTION WHILE PASSING ORIGINAL ASSESSMENT. AS PER COMPUTATION OF THE ASSESSEE, THE CLAIM OF THE ASSESSEE WAS ACCEPTED WITHOUT APPLYING THE MIND BY THE ASSESSING OFFICER. THEREFORE, IN MY VIEW, THERE IS NO CHANGE OF OPINION IN THIS CASE. THEREFORE, I UPHOLD THE REOPENING OF THE ASSESSMENT. ITA NO. 4 739 /20 1 2 4 6 . REGARDING THE ISSUE ON MERIT, I FOUND THAT THE ASSESSING OFFICER FOUND THAT THE EXCESS DEDUCTION HAS BEEN ALLOWED. THEREFORE, THE SAME WAS DISALLOWED BY REOPENING OF THE ASSESSMENT. THE CONTENTION OF THE AR THAT THESE ARE ALLOWABLE EXPENSES BUT IN MY VIEW, THE EXPENSES CANNOT BE ALLOWED OVER AND ABOVE 30% IN VIEW OF SECTION 24 OF THE ACT. ACCORDINGLY, I CONFIRM THE ACTION OF THE ASSESSING OFFICER ON THIS ALSO. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH 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