FINE TRADE EXPORTS LTD, MUMBAI V. ADDL CIT RG 6(2), MUMBAI

ITA 5127/MUM/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8976 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 27-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T A KHAN
• Keywords: Opportunity of being heard; Source of fund; Additional evidence

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL F , BENCH, MUMBAI , , , BEFORE SHRI RAJENDRA, AM AND SHRI RAM LAL NEGI, JM ./ ITA NO. 5127 / MUM/ 201 5 ( / ASSESSMENT YEAR: 2011 - 12 ) M/S FINE TRADE EXPORTS LTD., 3, NARAYAN BUILDING, 23, L.N. ROAD, DADAR (EAST), MUMBAI - 400014 VS. THE ADDL. CIT, RANGE - 6(2), AAYKAR BHAVAN, MUMBAI ./ ./ PAN/GIR N O. : AAACF 9257 F ( / APPELLANT ) .. ( / RESPONDENT ) / ASSESSEE BY : SHRI MALAV P SHETH (AR) / RE VENUE BY : SH RI T.A. KHAN (DR) / DATE OF HEARING : 14 /09 /2017 / DATE OF PRONOUNCEMENT : 27 / 10 / 2017 / O R D E R PER RAM LAL NEGI, JM THIS APPEA L HAS BEEN FILED BY THE ASSESSEE AGAINST ORDER DATED 04/08/2015 PASSED BY THE LD. COMMISS IONER OF INCOME TAX (APPEALS) - 12 , MUMBAI , PERTAI NING TO THE ASSESSMENT YEAR 2011 - 12 , WHEREBY THE LD. CIT (A) HAS PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST ASSESSMENT ORD ER PASSED U/S 143 (3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE A DOMESTIC COMPANY CARRYING ON THE BUSINESS AS T RADER, D ISTRIBUTOR, D EALER, E XPORTER, I MPORTER, B ROKER AND STOCKIEST , FILED ITS RETUR N OF INCOME FOR THE ASSESSMENT YEAR (A.Y.) 2011 - 12 DECLARING THE TOTAL INCOME OF RS. 1,41,62,664/ - . THE RETURN WAS PROCESSED UNDER SECTION 143 (1). SINCE, THE CASE WAS SELECTED FOR SCRUTINY NOTICE U/S 143 (2) AND 143 (1) WERE ISSUED CALLING FOR THE DETAILS . IN RESPONSE THEREOF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED AND SUBMITTED DETAILS. IT 2 ITA NO. 5127/MUM/2015 ASSESSMENT YEAR: 2011 - 12 WAS NOTICE THAT THE ASSESSEE COMPANY HAD SHOWN INCOME FROM HOUSE PROPERTY AT RS. 1,40,39,950/ - AGAINST WHICH THE AO DETERMINED THE TOTAL TAXABLE INCOME F ROM HOUSE PROPERTY AT RS. 1,61,60,955/ - . AO ALSO MADE ADDITION OF RS. 1,22,705/ - UNDER THE HEAD OTHER SOURCES OF INCOME AND THEREBY D ETERMIN ED THE TOTAL INCOME OF THE ASSESSEE AT RS. 1,62,83,660/ - . AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE COMPANY CH ALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT (A). THE LD. CIT (A) AFTER HEARING THE ASSESSEE PARTLY ALLOWED THE APPEAL . 3. T HE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUND S OF APPEAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT (A): - ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE OF MUNICIPAL TAX TO THE EXTENT OF RS. 24,71,220/ - OUT OF CLAIM OF RS. 57,98,125/ - UNDER THE HEAD INCOME FROM HOUSE PROPERTY HOLDING THAT THE CLAIM I S NOTHING BUT MAINTENANCE CHARGES WHICH IS NOT AN ALLOWABLE DEDUCTION. DISALLOWANCE MADE OF RS. 24,71,220/ - BEING IN THE NATURE OF MUNICIPAL TAX, IS BAD IN LAW AND NEEDS TO BE CANCELLED. 4. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS PURCHASED OFFICE PREMISES 601 TO 606 ADMEASURING 13,197 SQ. FT. CARPET AREA IN THE BUILDING KNOWN AS HALLMARK BUSINESS PLAZA , BANDRA (EAST), MUMBAI OUT OF SIX UNITS , T HE ASSESSEE SOLD OUT UNIT NO. 603 AND 604 ON 26/11/2008 . R EMAINING FOUR UN ITS I.E., 601, 602, 605 AND 606 WERE LET OUT TO ADANI INFRASTRUCTURE & DEVELOPMENT PVT. LTD. AND MILESTONE CAPITAL ADVISORS LTD. DURING THE YEAR, THE APPELLANT PAID MUNICIPAL TAX OF RS. 57,98,123/ - AND CLAIMED THE SAID AMOUNT AGAINST RENTAL INCOME UNDER TH E HEAD INCOME FOR HOUSE PROPERTY. THE SAID AMOUNT WAS PAID IN ACCORDANCE WITH CLAUSE 17 OF THE AGREEMENT WHICH DETERMINES THE LIABILITY TO PAY MUNICIPAL TAX ON THE ASSESSEE. 3 ITA NO. 5127/MUM/2015 ASSESSMENT YEAR: 2011 - 12 5. THE ASSESSEE HAS MOVED AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER R ULE 29 OF THE INCOME TAX APPELLATE TRIBUNAL RULES, 1963. THE LD. COUNSEL FURTHER SUBMITTED THAT APART FROM THE DOCUMENTS ALREADY SUBMITTED BEFORE THE AUTHORITIES BELOW. THE ASSESSEE WANTS TO SUBMIT THE FOLLOWING DOCUMENTS AS ADDITIONAL EVIDENCE . 1. CO PY OF CONFIRMATION OF M/S ASHAPURA DEVELOPERS CONFIRMING PAYMENT BY IT OF RS. 24,71,220/ - TO BMC TOWARDS PROPERTY TAX. (AS PER THE CERTIFICATION, THIS DOCUMENT WAS NOT AVAILABLE WITH THE AO ) . 2. COPY OF CITIZEN PORTAL SERVICES HAVING PROPERTY ACCOUNT NO. DOW NLOADED FROM THE WEBSITE OF M UNICIPAL CORPORATION OF GREATER MUMBAI. 3. CO PY OF DETAILS OF BILL IN RESPECT OF M/S ASHAPDARA DEVELOPERS DATED 23.08.2017 SHOWING THE AMOUNT OF BILLS RAISED ON DIFFERENT DATES. 6. ON THE OTHER HAND THE LD. DEPARTMENTAL R EPRESENTATIVE (DR) RELYING ON THE FINDINGS OF THE LD. CIT(A) SUBMITTED THAT THERE IS NO INFIRMITY IN THE IMPUGNED ORDER AS IN THE EARLIER YEAR THE ASSESSEE HAD CLAIMED RS. 24,71,220/ - AS MUNICIPAL TAX WHEREAS IN THE ASSESSMENT YEAR UNDER CONSIDERATION THE ASSESSEE HAS CLAIMED THE ENTIRE AMOUNT OF RS. 57,98,125/ - AS MUNICIPAL TAX. 7. AS REGARDS ADDITIONAL EVIDENCE, THE LD. DR OPPOSED THE APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE ON THE GROUND THAT THE ASSESSEE COULD HAVE PRODUCED THE SAME BEFORE THE AUTHORITIES BELOW. THE LD DR FURTHER SUBMITTED THAT THE FINDINGS OF THE AUTHORITIES BELOW ARE BASED ON THE EVIDENCE ON RECORD AND NO FRUITFUL PURPOSE WOULD BE SERVED IN CASE THE ADDITIONAL EVIDENCE IS ALLOWED AND THE MATTER IS REMANDED BACK FOR FURTHER VE RIFICATION. 4 ITA NO. 5127/MUM/2015 ASSESSMENT YEAR: 2011 - 12 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIAL ON RECORD. THE CONTENTION OF THE ASSESSEE IS THAT IT HAD PAID MUNICIPAL TAXES OF RS. 57,98,123/ - AGAINST RENTAL INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND THE LD. CIT(A) HAS WRONGLY AFFIRMED THE DISALLOWANCE OF MUNICIPAL TAX TO THE EXTENT OF RS. 24,71,220/ - OUT OF THE TOTAL CLAIM OF RS. 57,98,125/ - , HOLDING THAT THE CLAIM IS NOTHING BUT MAINTENANCE CHARGES WHICH ARE NOT ALLOWABLE DEDUCTION. BEFORE US, THE ASSESS EE HAS SUBMITTED THE FACTS SHEET WHICH INTER ALIA SHOWS DETAILS OF AMOUNT PAID BY THE ASSESSEE TOWARDS MUNICIPAL TAXES. AS PER THE SAID DETAILS THE ASSESSEE HAS PAID RS. 24,71,220/ - AS MONTHLY PAYMENTS @ RS.2,05,935/ - PER MONTH FROM 01.04.2010 TO 01 - 03 - 2011 AND FURTHER PAYMENT OF RS. 6,86,247/ - ,9,17,460/ - ,17,22,603/ - ON 26.03.2011 AND 593/ - ON 30.03.2011. THE AUTHORITY BELOW HAS DISALLOWED THE CLAIM OF THE ASSESSEE TO THE EXTENT OF RS 24,71,220/ - HOLDING THAT THE SAID AMOUNT WAS PAID BY THE ASSESSEE TOWARDS MA INTENANCE CHARGES. SO IN ORDER TO SUBSTANTIATE ITS CLAIM THE ASSESSEE WANTS TO SUBMIT ADDITIONAL EVIDENCE I.,E., DOCUMENT AT SERIAL NO. 2 & 3 MENTIONED ABOVE. THE LD. COUNSEL FURTHER SUBMITTED THAT SINCE, THESE DOCUMENTS WERE RECEIVED RECENTLY THE SAME COU LD NOT BE SUBMITTED BEFORE THE AUTHORITIES BELOW. WE NOTICED THAT DOCUMENT NO 3 HAS BEEN GENERATED ON 23.08.2017. SINCE, THE ASSESSEE HAS COMPUTED THE TOTAL AMOUNT OF MUNICIPAL TAXES, WE ARE OF THE CONSIDERED VIEW THAT FURTHER VERIFICATION BY THE AO IS NE CESSARY TO ARRIVE AT THE LOGICAL CONCLUSION. HENCE, WE ALLOW THE APPLICATION AND ADMIT THE ADDITIONAL EVIDENCE IN THE INTEREST OF JUSTICE. ACCORDINGLY, W E SET ASIDE THE IMPUGNED ORDER PASSED BY THE AO AND REMAND THE APPEAL BACK TO TH E AO WITH THE DIRECTION TO ADJUDICATE THE ISSUE IN QUESTION AFRESH IN THE LIGHT OF THE ADDITIONAL EVIDENCE PLACED ON RECORD, AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2011 - 12 ALLOWE D FOR THE STATISTICAL PURPOSES. 5 ITA NO. 5127/MUM/2015 ASSESSMENT YEAR: 2011 - 12 ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH OCTOBER, 2017 . SD/ - SD/ - ( RAJENDRA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 27 / 10 / 2017 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A ) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MU MBAI