Sri M. Sathyanarayana, Bangalore V. ITO, Bangalore

ITA 571/BANG/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9491 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-09-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 05-06-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JACINTA ZINIK VASHAI
• Assessee Lawyers: RAMASUBRAMANIYAN
• Keywords: TDS

Judgement Text

ITA NO.571/B/09 1 IN THE INCOME TAX APPEL LATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH BANGALORE BENCH BANGALORE BENCH BANGALORE BENCH A AA A BEFORE BEFORE BEFORE BEFORE K KK K. .. .K GUPTA K GUPTA K GUPTA K GUPTA, , , , A AA ACCOUNTAN CCOUNTAN CCOUNTAN CCOUNTAN MEMBER MEMBER MEMBER MEMBER AND AND AND AND SHRI SHRI SHRI SHRI GEORGE GEORGE K GEORGE GEORGE K GEORGE GEORGE K GEORGE GEORGE K, , , , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO.571/BAN G/2009 (ASSESSMENT YEAR 2005-06) SHRI M SATHYANARAYANA, PROP : KODANDARAMA WINES, HOSUR ROAD, BOMMASANDRA, ANEKAL TALUK, BANGALORE. . APPELLANT VS, THE INCOME-TAX OFFICER, WARD 10(1), BANGALORE. . RESPONDENT APPELLANT BY : SHRI RAMASUBRAMANIYAN RESPONDENT BY : SMT. JACINTA ZINIK VASHAI O R D E R O R D E R O R D E R O R D E R PER PER PER PER GEORGE GEORGE GEORGE GEORGE GEORGE GEORGE GEORGE GEORGE K KK K, , , , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER : : : : THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS) - V, BANGALORE DATED 1.5.2009. THE ASSESSMENT YEAR CONCERNED IS 2005-06 . 2. THE ASSESSEE IS AN INDIVIDUAL. THE ASSESSEE IS ALSO THE KARTHA OF HIS HUF KNOWN AS SHRI M SATHYANARAYANA (HUF). I T IS SUBMITTED THAT THE HUF HAD PURCHASED LAND DURING THE FINANCIA L YEAR ENDING 31.3.99 FROM KIADB. THE LAND IS LOCATED AT NO.58, BOMMASANDRA, BANGALORE. THE HUF HAD DISCLOSED THIS FACT IN THE RETURN FILED BY IT FOR THE ASSESSMENT YEAR 1999-2000. IT IS FURTHER SUBMI TTED THE HUF ITA NO.571/B/09 2 CONSTRUCTED A FACTORY BUILDING DURING THE FINANCIAL YEAR 2003-04 AND LET IT OUT TO M/S QUEST TECHNOLOGIES. 2.1 THE RENTAL INCOME WAS DISCLOSED IN THE RETURN F ILED BY HUF FOR THE ASST. YEAR 2004-05 AND 2005-06. THE PAN OF HUF IS AAAHM8739G. M/S QUEST TECHNOLOGIES HAD DEDUCTED TA X AT SOURCE ON THE RENT PAID. WHILE ISSUING TDS CERTIFICATE T HE TENANT QUOTED THE PAN OF THE ASSESSEE-INDIVIDUAL. 2.2 THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY F OR THE ASST. YEAR 2005-06. THE LEARNED AO NOTICED THE DISCREPANCY IN PAN AND REQUESTED THE ASSESSEE TO FURNISH THE EXPLANATION A S TO WHY THE RENTAL INCOME SHOULD NOT BE ASSESSED IN THE HANDS OF INDIV IDUAL. THE ASSESSEE FURNISHED EXPLANATION STATING THAT M/S QUE ST TECHNOLOGIES HAS WRONGLY QUOTED THE PAN OF INDIVIDUAL AND ALSO F URNISHED THE PROOF REGARDING THE INCOME BEING DECLARED IN THE HANDS OF HUF. THE LEARNED AO HELD THAT THE ASSESSEE HAD ENTERED INTO AN AGREEMENT IN HIS INDIVIDUAL CAPACITY. HE ADDED A SUM OF RS.1,51 ,200/- UNDER THE HEAD INCOME FROM HOUSE PROPERTY. AGGRIEVED BY THE AFORESAID ORDER, THE ASSESSEE MOVED AN APPEAL BEFORE LEARNED CIT(A). THE LEANED CIT(A) DISMISSED THE APPEAL ON THE GROUND THAT IN T HE RETURN OF HUF FOR THE ASST. YEAR 1999-2000, HUF HAD DISCLOSED ONL Y RENTAL INCOME FROM PROPERTY NO.3/2 AND NO INCOME WAS SHOWN IN RES PECT OF PROPERTY NO.58. ITA NO.571/B/09 3 2.3 AGGRIEVED BY THE LEARNED CIT(A)S ORDER, THE AS SESSEE IS IN SECOND APPEAL BEFORE US WITH THE FOLLOWING EFFECTI VE GROUNDS : (1) THAT THE LEARNED CIT(A) ERRED IN LAW AND ON FAC TS IN HOLDING THAT THE RENTAL INCOME WAS RECEIVED BY THE ASSESSEE-INDIVIDUAL IGNORING THE EVIDENCES TO PROVE THAT THE PROPERTY IS THAT OF HUF AND THE RENTAL INC OME HAS BEEN OFFERED IN THE HANDS OF HUF. (2) THAT THE LEARNED CIT(A) ERRED IN LAW AND ON FAC TS IN HOLDING THAT THE RENTAL AGREEMENT HAS BEEN ENTERED INTO BY THE INDIVIDUAL AND SUCH A FINDING IS CONTRA RY TO EVIDENCE ON RECORD. (3) THAT THE LEARNED CIT(A) ERRED IN LAW AND ON FAC TS IN HOLDING THAT THE RENTAL INCOME IS TO BE ASSESSED IN THE HANDS OF ASSESSEE-INDIVIDUAL JUST BECAUSE THE TENAN T HAS WRONGLY QUOTED THE PAN OF THE ASSESSEE- INDIVIDUAL INSTEAD OF PAN OF HUF. (4) THAT THE LEARNED CIT(A) ERRED IN LAW AND ON FAC TS IN HOLDING THAT THE RENTAL INCOME IS TO BE ASSESSED IN THE HANDS OF ASSESSEE-INDIVIDUAL AS NO RENTAL INCOME HA S BEEN DISCLOSED IN RESPECT OF PROPERTY NO.58 IN THE ITA NO.571/B/09 4 RETURN FILED BY HUF FOR ASSESSMENT YEAR 1999-00 IGNORING THE FACT THAT THE FACTORY BUILDING WAS CONSTRUCTED IN 2003-04 AND LET-OUT FROM ASSESSMENT YEAR 2004-05 ONWARDS. 3. THE LEARNED AR REITERATED THE STAND TAKEN BEFORE THE AUTHORITIES BELOW. HE ALSO PRODUCED STATEMENT OF INCOME OF HU F FOR THE ASST. YEAR 2004-05 AND 2005-06, WHEREIN THE HUF HAD DECLA RED RENTAL INCOME RECEIVED FROM PLOT NO.58, BOMMASANDRA. THE LEARNED AR ALSO FURNISHED THE STATEMENT OF INCOME AND NOTE ATTACHED ALONG WITH THE SAME, FOR THE ASST. YEAR 1999-00 IN THE CASE OF HUF , FOR THE PURPOSE THAT THE INDUSTRIAL LAND IN QUESTION WAS ALLOTTED T O HUF. THE LEARNED DR ON THE OTHER HAND SUPPORTED THE ORDER OF THE AUT HORITIES BELOW. THE LEARNED DR ALSO FILED PAPER BOOK COMPRISING THE RETURN OF INCOME, STATEMENT OF COMPUTATION OF TOTAL INCOME, COPY OF L EASE/RENT AGREEMENT ENTERED BETWEEN THE ASSESSEE AND M/S QUES T TECHNOLOGIES, COPY OF LEASE AGREEMENT OF LAND DATED 10 TH APR, 2000 BETWEEN KIADB AND THE ASSESSEE AS PROPRIETOR OF M/S PMS INDUSTRIES AND COPY OF POSSESSION CERTIFICATE. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. AS RIGHTLY POINTED OUT BY THE AO, THE R ENT AGREEMENT DATED 28.4.2003 HAS SHOWN SHRI M SATHYANARAYANA AS LANDL ORD AND THE RENT SHOULD BE PAID BY CHEQUE IN FAVOUR OF SHRI M SATHYA NARAYANA. IN THE AGREEMENT, THERE IS NO MENTION OF HUF. SHRI M SATH YANARAYANA HAS ITA NO.571/B/09 5 SIGNED THE AGREEMENT IN HIS INDIVIDUAL CAPACITY AND NOT ON BEHALF OF ANY HUF AND THE SIGNATURE IS ALSO NOT DONE AS KARTH A OF HUF OR A MEMBER OF HUF. WE HAVE PERUSED THE LEASE AGREEMENT , WHEREIN THE LAND IN QUESTION IS LEASED BY KIADB TO THE INDIVIDU AL SHRI M SATHYANARAYANA, THE PROPRIETOR OF M/S PMS INDUSTRI ES. IN THE LEASE AGREEMENT ALSO THERE IS NO MENTION OF HUF. THE LEA SE AGREEMENT IS DATED 26.4.2000 AND ON EXECUTION OF THE SAME, A SUM OF RS.6,52,641/- IS TO BE PAID BY THE LESSEE TO THE LESSOR. HERE, T HE LESSEE IS CLEARLY MENTIONED AS THE ASSESSEE-INDIVIDUAL AND NOT AS THE HUF. THE POSSESSION CERTIFICATE ISSUED BY THE KIADB ALSO MEN TIONED SHRI M SATHYANARAYANA, THE INDIVIDUAL. THEREFORE, WE ARE OF THE VIEW THAT THE PROPERTY IN QUESTION IS OWNED BY THE INDIVIDUAL -AS SESSEE AND IT IS TO BE ASSESSED IN HIS HANDS. FOR DECLARATION OF RENTA L INCOME FROM PLOT NO.58, IN HAND HUF, IT IS FOR THE HUF-ASSESSEE TO T AKE REMEDIAL MEASURES, SUCH AS RECTIFICATION ETC. 5. FOR THE AFORESAID REASON, WE ARE OF THE VIEW THE ORDER OF AUTHORITIES BELOW, IS CORRECT AND IN ACCORDANCE WIT H LAW AND WE UPHOLD THE SAME. ITA NO.571/B/09 6 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. PRONOUNCED IN THE OPEN COURT ON 18TH SEPT, 200 9. SD/ SD/ SD/ SD/- -- - SD/ SD/ SD/ SD/- -- - ( (( (K.K GUPTA K.K GUPTA K.K GUPTA K.K GUPTA) ) ) ) ( ( ( (GEORGE GEORGE K) GEORGE GEORGE K) GEORGE GEORGE K) GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE DATED : 18 /09/09 VMS. COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3. THE CIT CONCERNED. 4. THE CIT(A) CONCERNED. 5. DR 6. GF 7. GF, ITAT, NEW DELHI. BY ORDER ASST. REGISTRAR, ITAT, BANGAL ORE.