HINDUSTAN POLYAMIDES & FIBRES LTD, MUMBAI V. ASST CIT CIR 6(3), MUMBAI

ITA 4854/MUM/2012

• Counselvise Citation: 485419914 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 24-09-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 24-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PITAMBAR DAS
• Assessee Lawyers: K GOPAL JITENDRA SINGH
• Keywords: Business income; Revised return

Judgement Text

, , ,, , INCOME TAX APPELLATE TRIBUNAL,MUMBAI - H BENCH. . .. . ! ! ! ! , '#$% '#$% '#$% '#$% #&'() #&'() #&'() #&'() , '# '# '# '# *+ *+ *+ *+ BEFORE S/SH.D.MANMOHAN,VICE-PRESIDENT & RAJENDR A,ACCOUNTANT MEMBER ./ ././ ./ ITA NO.4854/MUM/2012 , ! # ! # ! # ! # - - - -/ // / ASSESSMENT YEAR-2008-09 HINDUSTAN POLYAMIDES & FIBRES LTD., 1004 PENINSULA TOWERS, G.K. MARG, LOWER PAREL MUMBAI- 400013 VS. ACIT CIR 6(3), R.NO. 505, 5 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD. MUMBAI- 400 020 PAN: AAACH3757J ( #./ / // / APPELLANT ) ( 01./ / RESPONDENT ) #./ #./ #./ #./ 2 2 2 2 ' '' ' / APPELLANT BY : S HRI K.GOPAL/JITENDRA SINGH 01./ 3 2 ' / RESPONDENT BY : SHRI PITAMBAR DAS !# !# !# !# 3 33 3 4# 4# 4# 4# / DATE OF HEARING : 24/09/2013 5- # 3 4# / DATE OF PRONOUNCEMENT : 27/09/2013 ! ! ! ! , 1961 3 33 3 ## ## ## ## 254(1) ' '' ' (464 (464 (464 (464 *'7 *'7 *'7 *'7 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, A.M: CHALLENGING THE ORDER DATED 31.05.2005 OF THE CIT(A )-12,MUMBAI ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1).THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) ERRED IN CONFIRMING THE DISALLOWANCE OF PROPERTY TAX OF RS.5,47 1 406/-. YOUR APPELLANTS SUBMIT THAT THE SAID AMOUNT ORIGINALLY CLAIMED UNDER THE HEAD INCOME FROM HOUSE PROPERTY BUT CLAIMED DURING THE ASSESSMENT AGAINST BUSINESS INCOME OUGHT TO HAVE BEEN ALLOWED AGAINST BUSINESS INCOME OF YOUR A PPELLANTS. THE LEARNED CIT(A) ERRED IN NOT ACCEPTING YOUR APPELLANTS CONTENTIONS AND CONFIRMI NG THE DISALLOWANCE OF PROPERTY TAX OF RS.5,47,406/ - CLAIMED AGAINST BUSINESS INCOME. 2).THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THI S WAS NOT AN ADDITIONAL CLAIM. IN THE RETURN THE SA ME WAS ERRONEOUSLY CLAIMED AGAINST PROPERTY INCOME WHI LE THE SAME WAS CORRECTLY ALLOWABLE IN COMPUTING THE BUSINESS INCOME OF YOUR APPELLANTS. YOUR APPELL ANTS SUBMIT THAT THEY BE ALLOWED DEDUCTION OF PROPERTY TAX PAID OF RS.5,47,406/- FROM THE BUSINES S INCOME. 3).YOUR APPELLANTS FURTHER RESERVE THE RIGHTS TO AD D, AMEND OR ALTER THE AFORESAID GROUNDS OF APPEAL A S THEY MAY THINK FIT BY THEMSELVES OR BY THEIR REPRES ENTATIVES. 2. ASSESSEE-COMPANY,ENGAGED IN THE BUSINESS OF MANUFAC TURING OF AROMA CHEMICALS,FILED ITS RETURN ON 30.03.2010,DECLARING A TOTAL INCOME OF RS . 5.96 CRORES.LATER ON A REVISED RETURN OF INCOME WAS FILED ON 30.10.2010 DECLARING INCOME OF RS. 5.96 CRORES.ASSESSMENT WAS FINALISED BY THE ASSESSING OFFICER(AO)ON 16.12.2010 AT RS. 6. 30 CRORES. EFFECTIVE GROUNDS OF APPEAL IS ABOUT DISALLOWANCE O F PROPERTY TAX OF RS. 5,47,406/-.DURING THE ASSESSMENT PROCEEDINGS,AO FOUND THAT ASSESSEE HAD S HOWN INCOME FROM HOUSE PROPERTY. HE DIRECTED THE ASSESSEE TO FILE THE DETAILS OF INCOME UNDER THE HEAD HOUSE PROPERTY ALONG WITH THE EVIDENCE IN SUPPORT OF THE CLAIM OF EXPENSES.AS PER THE REPLY FILED BY THE ASSESSEE,IT HAD RECEIVED RENT OF RS. 1.29 CRORES AND HAD PAID PROPE RTY TAX OF RS. 10.94 LACS.ON PERUSAL OF THE DETAILS FILED BY THE ASSESSEE,AO FOUND THAT ASSESSE E HAD CLAIMED DEDUCTION OF MUNICIPAL TAXES AMOUNTING TO RS. 10,94,804/-,THAT IT HAD PAID MUNIC IPAL TAXES TO THE OWNER OF THE BUILDING ON THE BASIS OF THE BILL RAISED BY THEM.AO WAS OF THE OPIN ION THAT MUNICIPAL TAXES WERE NOT PAID TO THE LOCAL AUTHORITIES. SO,HE ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WHY CLAIM OF DEDUCTION OF MUNICIPAL TAXES,FOR COMPUTING INCOME UNDER THE H EAD HOUSE PROPERTY,SHOULD BE REJECTED. 2 ITA NO. 4854/MUM/2012(AY-2008-09) HINDUSTAN POLYAMI DES & FIBRES LTD. VIDE ITS LETTER DATED 16.12.2010 ASSESSEE SUBMITTED THAT IT WAS OWNER OF TWO UNITS (NO.1002 AND 1004),THAT OUT OF WHICH ONE WAS GIVEN ON RENT AND T HE OTHER WAS UTILISED FOR THE PURPOSE OF BUSINESS, THAT IT HAD ERRED IN TAKING MUNICIPAL TAX ES PAID FOR BOTH THE UNITS AS A DEDUCTION WHILE COMPUTING THE INCOME IN RESPECT OF UNIT NO. 1002.AF TER CONSIDERING THE SUBMISSION OF THE ASSESSEE, AO HELD THAT PROPERTY TAX WAS NOT PAID TO LOCAL AUTHORITIES, THAT ASSESSEE WAS NOT ENTITLED TO CLAIM THE DEDUCTION U/S. 23 OF THE ACT. FINALLY, HE DISALLOWED THE CLAIM MADE BY THE ASSESSEE. 2.A. AS PER THE AO,ASSESSEE MADE AN ALTERNATIVE PLEA THA T PROPERTY TAX OF RS. 5.47 LACS PAID FOR UNIT NO.1004 SHOULD BE ALLOWED AS DEDUCTION U/S. 30 OF THE ACT WHILE COMPUTING THE INCOME FROM BUSINESS,VIDE ITS SUBMISSION DATED 16.12.2010. AO HELD THAT THE CLAIM MADE BY THE ASSESSEE COULD NOT BE ALLOWED AS IT WAS AFTERTHOUGHT, THAT I T HAD MADE THE CLAIM AFTER A SHOW CAUSE NOTICE WAS ISSUED BY HIM TO THE ASSESSEE FOR DISALLOWING T HE PROPERTY TAX.RELYING UPON THE ORDER OF THE HONBLE SUPREME COURT DELIVERED IN THE CASE OF GOET Z INDIA LTD. (284 ITR 323),HE HELD THAT NO FRESH CLAIM COULD BE ENTERTAINED BY HIM IN ABSENCE OF A REVISED RETURN. 2.1 .ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPE LLATE AUTHORITY (FAA). IT WAS SUBMITTED BEFORE HIM THAT PAYMENT OF PROPERTY TAX WAS NATURE OF TAX PAID TO LOCAL AUTHORITIES AND HAD TO BE ALLOWED U/S. 24 OF THE ACT,THAT WHILE COMPUTING INC OME UNDER THE HEAD INCOME FROM THE BUSINESS/PROFESSION TAX PAID TO THE LOCAL AUTHORITI ES HAD TO BE ALLOWED. ASSESSEE FILED COPIES OF RECEIPT RECEIVED FROM THE OWNER OF THE BUILDING WHE REIN THE DETAILS TAXES COLLECTED FROM THE ASSESSEE WERE GIVEN.AFTER CONSIDERING THE FACTS OF THE CASE AND FOLLOWING THE ORDER OF HIS PREDECESSOR FOR THE AY 2006-07, HE HELD THAT CLAIM MADE BY THE ASSESSEE FOR PROPERTY TAX OF RS. 5.47 LACS UNDER THE HEAD HOUSE PROPERTY INCOME HAD TO BE ALLOWED. DISCUSSING THE ISSUE OF DEDUCTION CLAIMED U/S.30 OF THE ACT IN RESPECT OF C OMPUTING OF INCOME UNDER THE HEAD BUSINESS / PROFESSION, FAA HELD THAT THERE WAS NO INFIRMITY IN THE ORDER OF THE AO. REFERRING TO THE ORDER OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZ I NDIA LTD. (SUPRA) ,HE UPHELD THE ORDER OF THE AO.AS A RESULT DISALLOWANCE,MADE BY THE AO,AMOUNTIN G TO RS. 5,47,406/- WAS CONFIRMED BY HIM. 2.2. BEFORE US,AUTHORISED REPRESENTATIVE (AR) SUBMITTED THAT ASSESSEE WAS ENTITLED TO CLAIM TAXES PAID TO MUNICIPALITY,THAT SAID EXPENDITURE WA S ALLOWABLE U/S. 30 OF THE ACT,THAT VIDE ITS LETTER DATED 16.10.2010 ASSESSEE HAD MADE ALTERNATI VE PLEA BEFORE THE AO,THAT AO AND FAA HAD DISALLOWED THE EXPENDITURE FOLLOWING THE JUDGMENT O F HONBLE SUPREME COURT DELIVERED IN THE CASE OF GOETZ INDIA LTD.(SUPRA).DEPARTMENTAL REPRES ENTATIVE (DR)SUPPORTED THE ORDER OF THE FAA. 2.3 .WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL BEFORE US.UNDISPUTED FACTS OF THE CASE ARE THAT ASSESSEE HAD RENTED OUT ONE PROPE RTY AND WAS USING ANOTHER PROPERTY FOR ITS OWN USE,THAT ASSESSEE WAS CARRYING OUT BUSINESS FROM TH E SAID UNIT,THAT IT HAD PAID MUNICIPAL TAXES AMOUNTING TO RS. 5,47,406/- FOR THE UNIT USED BY IT , THAT AS PER THE PROVISIONS OF SECTION 30 OF THE ACT TAXES PAID BY ASSESSEE ARE ALLOWABLE DEDUCTIONS ,THAT ASSESSEE HAD MADE A CLAIM BEFORE THE AO BEFORE THE ASSESSMENT ORDER WAS FINALISED,THAT F AA HAD REJECTED THE CLAIM MADE BY THE ASSESSEE RELYING UPON THE ORDER OF THE HONBLE SUPR EME COURT.THERE IS NO DOUBT THAT AO IS NOT AUTHORISED TO ENTERTAIN ANY FRESH CLAIM WITHOUT A R EVISED RETURN OF INCOME,BUT APPELLATE AUTHORITIES I.E. FAA AND THE ITAT CAN ENTERTAIN ANY FRESH CLAIM OF DEDUCTIONS/EXEMPTIONS,AS HELD BY THE HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF PRUTHVI BROKERS LTD.(349ITR336).IN THESE CIRCUMSTANCES,WE ARE OF THE OPINION THAT CLAI M MADE BY THE ASSESSEE HAS TO BE ACCEPTED/ REJECTED ON MERITS.THEREFORE, IN THE INTEREST OF JU STICE MATTER IS RESTORED BACK TO THE FILE OF THE FAA FOR FRESH ADJUDICATION.HE IS DIRECTED TO AFFORD A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE.EFFECTIVE GROUND OF APPEAL FILED BY THE AS SESSEE IS ALLOWED IN ITS FAVOUR IN PART. 3 ITA NO. 4854/MUM/2012(AY-2008-09) HINDUSTAN POLYAMI DES & FIBRES LTD. AS A RESULT APPEAL FILED BY THE ASSESSEE STANDS PAR TLY ALLOWED. 8 #+9 ! #84 :## *#; 7 +<4 3  =. ORDER PRONOUNCED IN THE O PEN COURT ON 27 TH SEPTEMBER, 2013 *'7 3 5- # ' (## > ?*!# 27, 4 2013 3 6 @ SD/- SD/- ( . ! ! ! ! / D. MANMOHAN ) ( #&'() #&'() #&'() #&'() / RAJENDRA) '#$% '#$% '#$% '#$% / VICE-PRESIDENT '# '# '# '# *+ *+ *+ *+ /ACCOUNTANT MEMBER / MUMBAI, ?*!# /DATE: 27.09 . 2013 SK *'7 *'7 *'7 *'7 3 33 3 04A 04A 04A 04A B'A-4 B'A-4 B'A-4 B'A-4 / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / #./ 2. RESPONDENT / 01./ 3. THE CONCERNED CIT(A)/ C D , 4. THE CONCERNED CIT / C D 5. DR H BENCH, ITAT, MUMBAI / AE#6 04! . , . . (## . 6. GUARD FILE/ 6# F# 1#A4 04 //TRUE COPY// *'7#!# / BY ORDER, ' / # &# DY./ASST. REGISTRAR , /ITAT, MUMBAI