M/s. Lakhani Rubber Udyog (Pvt) Ltd., New Delhi V. ACIT, Faridabad

ITA 5270/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2967 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 06-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Keywords: Business income; Depreciation

Judgement Text

ITA NOS. 5269 & 5270/DEL/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDEN T & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NOS.-5269 & 5270/DEL/2016 ( ASSESSMENT YEARS: 2008-09 & 2009-10) LAKHANI RUBBER UDYOG P. LTD. W-9, GK-II, NEW DELHI. AAACL3111E VS ACIT CIRCLE-II FARIDABAD ASSESSEE BY NONE REVENUE BY SH. RAVI KANT GUPTA, SR. DR ORDER PER BENCH : THESE TWO APPEALS, RELATING TO THE ASSESSMENT YEARS 2008-09 & 2009-10, ARE PREFERRED BY THE ASSESSEE, AGGRIEVED BY THE CONFIRMATION OF THE PENALTY LEVIED BY THE LD. AO ON ACCOUNT OF THE DISALLOWANCE OF DEPRECIATION MADE BY THE AO. 2. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A COMPAN Y DERIVING INCOME FROM THE MANUFACTURE OF FOOTWEAR. DURING TH E SCRUTINY OF THE RETURN OF INCOME FOR THE YEARS 2008-09 & 2009-1 0 AO MADE CERTAIN ADDITIONS. INSOFAR AS THESE TWO APPEALS AR E CONCERNED, IT IS RECORDED BY THE LD. AO THAT DURING THESE YEARS T HE ASSESSEE BEING THE OWNER OF THE HOUSE PROPERTY, RECEIVED REN TAL INCOME, HOWEVER, CLAIMED DEPRECIATION IN RESPECT OF THE SAM E. AO TREATED DATE OF HEARING 26 .12 .2017 DATE OF PRONOUNCEMENT 2 6 .12.2017 ITA NOS. 5269 & 5270/DEL/2016 2 THE RECEIPT AS INCOME FROM HOUSE PROPERTY, DISALLOW ED THE DEPRECIATION AND ADDED IT BACK TO THE TOTAL INCOME OF THE ASSESSEE. AO ALSO MADE CERTAIN OTHER ADDITIONS. A O INITIATED PENALTY PROCEEDINGS AND LEVIED PENALTY. IN APPEAL, LD. CIT (A) WHILE DELETING THE OTHER ADDITIONS SUSTAINED THE AD DITION MADE BY THE AO ON ACCOUNT OF THIS PARTICULAR ADDITION MADE WHILE DISALLOWING THE DEPRECIATION. HOWEVER, LD. CIT (A) RESTRICTED THE PENALTY TO THE NET DISALLOWANCE. CHALLENGING THE S AME, THE ASSESSEE IS IN THIS APPEAL. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE, WHEREAS IT IS THE ARGUMENT OF THE LD. DR THAT IN AS MUCH AS THE ASSES SEE CLAIMED DEPRECIATION IN RESPECT OF THE RENTAL INCOME, THE A SSESSEE FURNISHED INACCURATE PARTICULARS, AS SUCH, THE PENA LTY IS SUSTAINABLE. 4. WE HAVE GONE THROUGH THE RECORD. RECORD REVEALS THAT INSOFAR AS THE FACTS AND FIGURES ARE CONCERNED, IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAD CONCEALED ANY INC OME OR FURNISHED ANY INACCURATE PARTICULARS. THE ENTIRE M ATTER REVOLVES AROUND THE QUESTION AS TO UNDER WHAT HEAD THE RECEI PT FALLS WHETHER IT IS BUSINESS INCOME OR INCOME FROM HOUSE PROPERTY, I.E, IN RESPECT OF TREATMENT TO BE GIVEN TO THE INCOME F ROM THE BUILDING. ACCORDING TO THE ASSESSEE, IT IS INCOME FROM BUSINESS, AS SUCH, THEY CLAIMED DEPRECIATION THEREON, WHEREAS ACCORDING TO THE REVENUE IT IS THE INCOME FROM HOUSE PROPERTY, A S SUCH, THE ASSESSEE IS ENTITLED TO THE DEDUCTIONS RELEVANT TO THE HOUSE PROPERTY, BUT NOT TO THE BUSINESS INCOME. THIS IS A QUESTION OF APPLICATION OF LAW TO THE FACTS BUT NOT A QUESTION OF FACT AS TO THE ASSESSEE CONCEALING ANY INCOME OR FURNISHING ANY IN ACCURATE ITA NOS. 5269 & 5270/DEL/2016 3 PARTICULARS THEREOF. WE ARE OF THE CONSIDERED OPIN ION THAT UNLESS THE REVENUE MAKES OUT A CASE THAT THE ASSESSEE EITH ER CONCEALED ANY INCOME OR FURNISHED ANY INACCURATE PARTICULARS THEREOF, THE PENALTY CANNOT BE SUSTAINED. WITH THIS VIEW, WE, T HEREFORE, ALLOW THE APPEALS AND DIRECT THE AO TO DELETE THE PENALTY IN RESPECT OF THESE TWO YEARS. 5. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.12.2017 SD/- SD/- (G.D. AGRAWAL) (K. NARSIM HA CHARY) PRESIDENT JUDICIAL MEMBER DATED: 26.12.2017 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DRAFT DICTATED ON 26.12.2017 DRAFT PLACED BEFORE AUTHOR 26.12.2017 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 26.12.17 KEPT FOR PRONOUNCEMENT ON 26.12.17 FILE SENT TO THE BENCH CLERK 27.12.17 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.