ACIT 2(3), MUMBAI V. WALCHAND PEOPLE FIRST LTD, MUMBAI

ITA 5308/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3447 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 11-02-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 31-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V G GINDE
• Assessee Lawyers: ASGHAR ZAIN
• Keywords: Opportunity of being heard
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER / I .T A NO. 5308/MUM/2013 ( / ASSESSMENT YEAR : 2010 - 11 THE ACIT - 2(3), AAYAKAR BHAVAN, MUMBAI - 400 020 / VS. M/S. WALCHAND PEOPLE FIRST LTD., 1, CONSTRUCTION HOUSE, 5, WALCHAND HGIRACHAND MARG, BALLARD ESTATE, MUMBAI - 400 01 C.O. NO. 228/MUM/2014 (ARISING OUT OF I .T A NO. 5308/MUM/2013 ( / ASSESSMENT YEAR : 2010 - 11 M/S. WALCHAND PEOPLE FIRST LTD., 1, CONSTRUCTION HOUSE, 5, WALCHAND HGIRACHAND MARG, BALLARD ESTATE, MUMBAI - 400 01 / VS. THE ACIT - 2(3), AAYAKAR BHAVAN, MUMBAI - 400 020 / I .T A NO. 515 5 /MUM/2013 ( / ASSESSMENT YEAR : 2010 - 11 M/S. WALCHAND PEOPLE FIRST LTD., 1, CONSTRUCTION HOUSE, 5, WALCHAND HGIRACHAND MARG,BALLARD ESTATE, MUMBAI - 400 01 / VS. THE ACIT - 2(3), AAYAKAR BHAVAN, MUMBAI - 400 020 ./ ./ PAN/GIR NO. AAACW 0364J ( / APP ELLANT ) .. ( / RESPONDENT ) WALCHAND PEOPLE FIRST LTD. 2 / A SSESSEE BY: SHRI V.G. GINDE / RESPONDENT BY: SHRI ASGHAR ZAIN / DATE OF HEARING : 11 . 0 2 . 201 6 / DATE OF PRONOUNCEMENT : 18. 03.2016 / O R D E R PER C.N. PRASAD, JM : TH ESE ARE APPEALS BY THE REVENUE AND THE ASSESSEE AND CROSS OBJECTION BY THE ASSESSEE AGAINST THE VERY SAME ORDER S OF THE LD. CIT(A) - 6 , MUMBAI DATED 2 4 .0 5 .201 3 PERTAINING TO ASSESSMENT YEAR 2010 - 11. THESE APPEALS AND CROSS OBJECTION WERE HEARD TOGETHER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. ITA NO. 5308/M/2013 REVENUE S APPEAL 2. THE ONLY ISSUE IN THE APPEAL OF THE REVENUE IS THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 1, 5 5,67,831/ - MADE ON ACCOUNT OF RENTAL INCOME RECEIVED FROM M/S. WALCHAND & CO. PVT. LTD. HOLDING THAT THE SAID COMPANY HAS FURTHER LET OUT THE PROPERTY TO VARIOUS PARTIES AND THE RENTAL INCOME HAS BEEN ASSESSED IN THE HANDS OF M/S. WALCHAND & CO. PVT. LTD., THEREBY IGNORING THE PROVISION OF SEC. 23(1)(A) OF THE I.T. ACT. 3. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITS T HAT THIS ISSUE HAS BEEN DECIDED IN ASSESSEES OWN CASE IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR 2009 - 10 IN ITA NO. WALCHAND PEOPLE FIRST LTD. 3 2543 /M/2013 VIDE ORDER DATED 4.2.2016. HE SUBMITS THAT SAME VIEW MAY BE FOLLOWED FOR THE ASSESSMENT YEAR 2010 - 11 SINCE FACTS ARE IDENTI CAL. 4. THE LD. DEPARTMENTAL REPRESENTATIVE PLACED RELIANCE ON THE ORDER OF THE ASSESSING OFFICER. 5. HEARD BOTH SIDES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE ORDER OF THE CO - ORDINATE BENCH FOR THE ASSESSMENT YEAR 20 0 9 - 10. THE CO - ORDINATE BENCH HAS ELABORATED THE ISSUE IN PARA - 21 TO 27 AND FINALLY IT WAS HELD IN PARA 26 & 27 THAT RENTAL INCOME RECEIVED FROM M/S. WALCHAND & CO. PVT. LTD., THE LESSEE IS ASSESSED TO TAX AND THE REVENUE HAS GOT THE DUE TAXES NOW TO AGAIN TAX THE RENTAL INCOME O N NOTIONAL BASIS IN THE HANDS OF THE ASSESSEE COMPANY WILL LEAD TO DOUBLE TAXATION AND THIS IS NOT PERMITTED UNDER THE ACT. THUS, THE TRIBUNAL UPHELD THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE DELETION OF THE ADDITION MADE BY THE ASSESSING OFFICER SUB JECT TO VERIFICATION AS TO WHETHER SUCH RENTAL INCOME HAS SUFFERED TAXATION IN THE HANDS OF M/S. WALCHAND & CO. PVT. LTD. IN VIEW OF THE ORDER OF THE CO - ORDINATE BENCH FOR ASSESSMENT YEAR 20 0 9 - 10, WE DIRECT THE ASSESSING OFFICER TO FOLLOW THE SAME AND DELETE THE ADDITION SUBJECT TO VERIFICATION FOR THE ASSESSMENT YEAR 2010 - 11 WHICH IS UNDER APPEAL BEFORE US . 6. IN THE RESULT , THE APPEAL FILED BY THE REVENUE IS DISMISSED. C.O. NO. 228/M/2014 7. IT IS THE SUBMISSION OF THE LD. COUNSEL THAT THE CROSS OBJECTION FILED BY THE ASSESSEE IS ONLY IN SUPPORT OF THE ORDER OF THE LD. CIT(A) . WALCHAND PEOPLE FIRST LTD. 4 T HE CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED AS INFRUCTUOUS AS THE LD. CIT(A)S ORDER IS AFFIRMED BY US. ITA NO. 515 5 /M/2013 ASSESSEES APPEAL 8. IN ASSESSEES APPEAL, IT IS CONTENDED THAT THE LD. CIT(A) ERRED IN NOT ADJUDICATING GROUND NO. 2.2 RAISED BEFORE HIM CONTESTING THE DISALLOWANCE U/S. 14A OF THE ACT IN RESPECT OF INTEREST ON BORROWINGS. THE LD. COUNSEL FOR THE ASSESSEE THEREFORE SUBMITS THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE LD. CIT(A) FOR ADJUDICATION. 9. THE LD. DEPARTMENTAL REPRESENTATIVE HAS NO SERIOUS OBJECTION IN REMITTING THE ISSUE TO THE FILE OF THE LD. CIT(A). 10. ON PERUSAL OF THE LD. CIT(A)S ORDER, WE FIND THAT THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE THE LD. CIT(A) THAT THE ASSESSEE HAS FILED RECTIFICATION PETITION ON ALL THE ISSUES BEFORE THE ASSESSING OFFICER AND THE ISSUES ARE RECTIFIABLE. IN VIEW OF THE SUBMISSION, THE LD. CIT(A) HELD THAT ASSESSING OF FICER SHALL RECTIFY THE MISTAKES APPARENT FROM RECORD ON GROUND NO. 2 TO 7 RAISED BY THE ASSESSEE. NOW IT IS THE SUBMISSION OF THE ASSESSEE THAT THE SPECIFIC GROUND RAISED IN RESPECT OF DISALLOWANCE MADE UNDER RULE 8D(2)(II) IN RESPECT OF INTEREST ON BORR OWINGS HAS NOT BEEN DEALT WITH BY THE LD. CIT(A). THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO GROUND NO. 2.3 OF THE GROUNDS OF APPEAL FILED BY THE LD. CIT(A) SUBMITS THAT IT WAS CONTENDED BEFORE THE LD. CIT(A) THAT THE ASSESSING OFFICER ERRED IN TAKIN G THE TOTAL OF THE ITEMS OF DISALLOWANCE U/S. 14A AS RS. 20,39,527/ - INSTEAD OF RS. 20,08,346/ - . THE LD. COUNSEL SUBMITS THAT THIS IS AN ERROR FOR WHICH RECTIFICATION PETITION WAS FILED BEFORE THE ASSESSING OFFICER. HE FURTHER SUBMITS THAT A SPECIFIC GRO UND NO. 2.2 WALCHAND PEOPLE FIRST LTD. 5 WAS RAISED IN THE GROUNDS OF APPEAL IN RESPECT OF DISALLOWANCE OF INTEREST ON BORROWINGS UNDER RULE 8D(2)(II) WHICH THE LD. CIT(A) HAS FAILED TO DISPOSE OF THE GROUND. 11. ON HEARING THE LD. COUNSEL AND PERUSING THE ORDERS OF THE LOWER AUTHORI TIES AND THE GROUND S OF APPEAL BEFORE THE LD. CIT(A) AND CONSIDERING THE FACT THAT GROUND NO. 2.2 OF THE LD. CIT(A) IS NOT DISPOSED OFF , W E RESTORE THIS ISSUE TO THE FILE OF THE LD. CIT(A) FOR LIMITED PURPOSE OF DISPOSING OF GROUND NO. 2.2 OF GROUNDS OF AP PEAL FILED BEFORE THE LD. CIT(A) , AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED AND THE APPEAL FILED BY THE ASSESSEE IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH MARCH , 201 6 . SD/ - SD/ - ( RAJESH KUMAR ) ( C.N. PRASAD ) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI ; DATED : 18 TH MARCH , 201 6 . . ./ RJ , SR. PS WALCHAND PEOPLE FIRST LTD. 6 / 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, MUMBAI