Sangram Keshari Mishra, Angul V. DCIT, Circle-4(1), Bhubaneswar

ITA 498/CTK/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5326 (ITAT-CUTTACK)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 26-04-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 11-12-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: D K SHETH AR SHRI D K PRADHAN
• Section: 142(1); 6

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM ITA NO . 498 /CTK/201 7 ( / ASSESSMENT YEAR : 20 1 3 - 20 1 4 ) SANGRAM KESHARI MISHRA, C/O DIBYA J YOTI TALKIES, MAIN ROAD, ANGUL - 759122 VS. DCIT, CIRCLE - 4(1), BHUBANESWAR ./ ./ PAN/GIR NO. : A ANHS 3269 L ( / APPELLANT ) .. ( / RESPONDENT ) /AS SESSEE BY : SHRI D.K.SHETH, AR /R EVENUE BY : SHRI D.K.PRADHAN , DR / DATE OF HEARING : 10 / 0 5 /201 8 / DATE OF PRONOUNCEMENT 16 / 05 /201 8 / O R D E R PER SHRI PAV AN KUMAR GADALE, JM : TH E ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF CIT(A) - 2 , BHUBANESWAR, DATED 25.08.2017 , PASSED IN I.T.APPEAL NO. 0011 / 20 1 6 - 1 7 , U/S.143(3)/250 OF THE I.T.ACT FOR THE ASSESSMENT YEAR 201 3 - 201 4 . 2. THE SOLE SUBSTANTIVE GROUND RAISED BY THE ASSESSEE THAT THE CIT(A) HAS ERRED IN CONFIRM ING THE DISALLOWANCE OF EXPENDITURE IN CURRED BY THE ASSESSEE IN RESPECT OF SERVICES CHARGES. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRUCK PLYING BUSINESS, LIASONING, COMMISSION AND BROKERAGES AND INCOME FROM HOUSE PROPERTY AND FILED THE RETURN OF INCOM E ELECTRONICALLY ON 29.12.2013 FOR THE ASSESSMENT YEAR 2013 - 14 WITH TOTAL INCOME AT RS. 17,64,330/ - . SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE U/S.143(2) AND 142(1) OF THE ACT WAS ISSUED TO THE ASSESSEE. IN COMPLIANCE THE LD. AR OF THE ASSESSEE ITA NO. 498 /201 7 2 APPEARED AND SUBMITTED THE DETAILS. THE AO TAKING INTO CONSIDERATION THE FACTS HAS FOUND THAT THE ASSESSEE HAS CLAIMED EXPENSES UNDER THE HEAD INCOME FROM OTHER SOURCES RS.12,36,080/ - AGAINST INCOME OF RS.9,16,740/ - MENTIONED AS SERVICE CH ARGES , THE ASSESSEE EXPLAINED THAT DURING THE SAID FINANCIAL YEAR THE ASSESSEE HAS LET OUT HIS BIKRAM L ODGE TO M/S JINDAL STEEL & POWER LIMITED ON RENT BASIS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO HAS VERIFIED THE RENTAL AGREEMENT AND FOUND TH AT THERE IS NO MENTION OF ANY SERVICE CHARGES PAYABLE TO THE LANDLORD BEING THE ASSESSEE AND ALSO REPRODUCED THE CLAUSE OF THE RENTAL AGREEMENT AT PAGE 2 OF THE ORDER AND F OUND THAT RENT FOR GUEST HOUSE IS FIXED AT RS.2,69, 400/ - . THE AO IS OF THE OPINION TH AT THE ASSESSEE IS NOT ENTITLED TO CLAIM EXPENDITURE AND RECOMPUTED THE INCOME FROM HOUSE PROPERTY AFTER ALLOWING 30% DEDUCTION TOWARDS REPAIRS AND ASSESSED THE TOTAL INCOME AT RS.27,25,390/ - AND PASSED ORDER U/S.143(3) OF THE ACT, DATED 30.03.2016. 4. ON APPEAL, TH E CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE, AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 5. BEFORE US, LD. AR SUBMITTED THAT THE ASSESSEE HAS LET OUT THE PROPERTY AS LODGE/GUEST HOUSE TO JINDAL STEEL & POWER LIMITED AND THE A SSESSEE HAS BEEN RECEIVING RENT AL INCOME , WHEREAS THE LD. AR ON THE DISPUTED ISSUE HAS SUBMITTED THE LIST OF EXPENSES CLAIMED BY THE ASSESSEE IN CONNECTION WITH THE TENANCY AND PRAYED FOR ALLOWING THE APPEAL. ITA NO. 498 /201 7 3 6. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE SOLE CRUX OF THE ISSUE THAT THE ASSESSEE HAS SUO MOTU BIFURCATED THE RENTAL INCOME INTO SERVICE CHARGES AND RENT DULY SUPPORTED BY COMPUTATION OF INCOME . FURTHER THE ASSESSEE HAS DISCLOSED SERVICE CHARGES IN THE INCOM E FROM OTHER SOURCES AND CLAIMED DEDUCTION OF EXPENDITURE TO THE EXTENT OF RS.12,36,080/ - AGAINST SERVICE CHARGES OF RS.9,16,740/ - . WE FOUND ON PERUSAL OF THE ASSESSMENT ORDER, THERE IS NO SEPARATE AGREEMENT BY THE ASSESSEE WITH TENANT IN RESPECT OF PROVID ING OF SERVICE S AS CLAIMED AND THE LD. AO PERUSED THE CLAUSES OF RENTAL AGREEMENT REFERRED IN ASSESSMENT ORDER AND COMPUTED THE TOTAL AMOUNT UNDER INCOME FROM HOUSE PROPERTY AND 30% DEDUCTION FOR REPAIRS WAS ALLOWED. W E ARE OF THE OPINION THAT THE A SSESSEE IS NOT ENTITLED FOR SEPARATE DEDUCTION FOR EXPENDITURE OTHER THAN DEDUCTION ALLOWED U/S.24 OF THE INCOME TAX ACT WHICH IS AS UNDER : - DEDUCTIONS FROM INCOME FROM HOUSE PROPERTY. 24. INCOME CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY SHA LL BE COMPUTED AFTER MAKING THE FOLLOWING DEDUCTIONS, NAMELY (A) A SUM EQUAL TO THIRTY PER CENT OF THE ANNUAL VALUE; (B) WHERE THE PROPERTY HAS BEEN ACQUIRED, CONSTRUCTED, REPAIRED, RE - NEWED OR RECONSTRUCTED WITH BORROWED CAPITAL, THE AMOUNT OF ANY INTEREST PAYABLE ON SUCH CAPITAL: ACCORDINGLY, CONSIDERING THE FACTS AND CIRCUMSTANCES AND PROVISION OF THE ACT, WE FIND THE DECISION OF THE CIT(A) CONFIRMING THE ACTION OF AO IS IN ACCORDANCE WITH LAW AND WE UPHOLD THE SAME AND DISMISS THE GROUND OF APP EAL OF THE ASSESSEE. ITA NO. 498 /201 7 4 7 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. O RDER PRONOU NCED IN THE OPEN COURT ON 16 / 05 / 201 8 . S D/ - ( N. S. SAINI ) SD/ - ( PA V AN KUMAR GADALE ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 16 / 05 /201 8 . . / PKM , SENIOR PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTAC K 1. / THE APPELLANT - SANGRA M KESHARI MISHRA, C/O DIBYA JYOTI TALKIES, MAIN ROAD, ANGUL - 759122 2. / THE RESPONDENT - DCIT, CIRCLE - 4(1), BHUBANESWAR 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUT TACK 6. / GUARD FILE. //TRUE COPY//