Sh. Sudhir Kumar Mittal (HUF), New Delhi V. ACIT, New Delhi

ITA 5782/DEL/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7240 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 29-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K TEWARI
• Assessee Lawyers: DR RAKESH GUPTA
• Keywords: Rule of consistency
• Section: 143(3)

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH G, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 5782/D EL/2014 AY: 2 011-12 SUDHIR KUMAR MITTAL (HUF) C/O M/S RRA TAX INDIA, D-28, SOUTH EXTENSION, PART-I, NEW DELHI 110 049 (PAN:AABHS1399M) (APPELLANT) VS ACIT, CIRCLE 32(1), NEW DELHI APPELLANT BY DR. RAKESH GUP T A, ADV. & SH. SOMIL AGARWAL, ADV. RESPONDENT BY SH. K. TEWARI, SR. DR. ORDER PER H.S. SIDHU, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER DATED 24.9.2014 PASSED BY LD. CIT(A)-XXVI, NEW DELHI FOR A SSESSMENT YEAR 2011-12. 2. THE GROUNDS RAISED IN THE APPEAL READ AS UNDER:- I) THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF AO IN 2 ASSESSING NOTIONAL RENT OF RS. 65,10,000/- INSTEAD O F RS. 15,000/- AS DECLARED BY THE ASSESSEE FROM M/S SUPREME TEXTILE UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND ACCORDINGLY MADE THE IMPUGNED ADDITION WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE AND WITHOUT CONSIDERING THE SUBMISSIONS OF ASSESSEE. II) THAT IN ANY CASE AND IN ANY VIEW OF THE MATTE R, ACTION OF LD. CIT(A) IN CONFIRMING THE ACTION OF AO I N MAKING THE IMPUGNED ADDITION AND FRAMING THE IMPUGNED ASSESSMENT ORDER IS CONTRARY TO LAW AND FACTS, VOID AB-INITIO, BEYOND JURISDICTION AND THE S AME IS NOT SUSTAINABLE ON VARIOUS LEGAL AND FACTUAL GROUNDS. III) THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LA W AND ON FACTS IN NOT REVERSING THE ACTION OF AO IN CHARGING INTEREST U/S. 234A, 234B, 234C AND 234D OF INCOME TAX ACT, 1961. IV) THAT THE APPELLANT CRAVES THE LEAVE TO ADD, AL TER 3 OR AMEND THE GROUNDS OF APPEAL AT ANY STAGE AND ALL THE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE-HUF FILED ITS RETURN OF INCOME SHOWING INCOME OF RS. 63,40,520/-. THE AS SESSEE COPARCENERS ARE; SH. SUDHIR KUMAR MITTAL, KARTA; SMT. M ADHU MITTAL, MEMBER; SH. UTSAV MITTAL, MEMBER AND MS. SHIVANI MITT AL, MEMBER. THE ASSESSEE DERIVES INCOME UNDER THE HEADS INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES. THE CASE OF TH E ASSESSEE WAS SELECTED FOR SCRUTINY. ACCORDINGLY, THE ASSESSMEN T WAS COMPLETED ON INCOME OF RS. 1,13,37,290/-; WHEREIN ADDITION ON ACCOUNT OF NOTIONAL RENTAL INCOME WAS DONE. THE ASSESSEE OWNS A COMMERCIAL PROPERTY ADMEASURING 1800 SQ. FEET AT E-29, SOUTH EXTE NSION, PART-II, NEW DELHI. OUT OF WHICH; THE AREA OF 630 SQ. FEET S HOP WAS GIVEN TO M/S M&B FOOTWEAR INITIALLY DURING THE YEAR AND THEREAFTE R TO M/S MIRZA INTERNATIONAL LTD. ON MONTHLY RENT OF RS. 4,60,000/- AND RS. 5,50,000/- RESPECTIVELY. HOWEVER, THE REMAINING AREA WA S GIVEN TO M/S SUPREME TEXTILE, A SISTER PARTNERSHIP CONCERN, ON AN NUAL RENT OF RS. 15,000/-. THE TWO PARTNERS OF M/S SUPREME TEXT ILE ARE; SH. SUDHIR KUMAR MITTAL; HAVING 75% SHARE AND SH. UTSAV MI TTAL; HAVING 25% SHARE; ARE COPARCENERS OF THE ASSESSEE HUF,. THE A O WAS OF THE VIEW THAT THE ASSESSEE HUF HAS CHARGED OVER NOMINAL REN T FROM M/S 4 SUPREME TEXTILE BECAUSE ITS PARTNERS ARE THE ASSESSE E HUFS COPARCENERS. THEREFORE, THE AO WORKED OUT THE ANNUAL V ALUE OF THAT PORTION OF THE HOUSE PROPERTY; WHICH WAS LET OUT TO M /S SUPREME TEXTILE, BY APPLYING THE AVERAGE RENT RECEIVED FROM M/ S M&B FOOTWEAR AND M/S MIRZA INTERNATIONAL LTD.. ACCORDING TO THE ASS ESSEE, THE ANNUAL VALUE OF THE HOUSE PROPERTY LET OUT TO M/S SUP REME TEXTILE IS RS. 1,80,000/- @RS. 15000/- PER MONTH WHERE AS THE AO WORKED OUT THE AV AT RS. 65,10,000/- AND ASSESSED THE INCOME OF THE ASSESSEE AT RS. 1,13,37,290/- VIDE ORDER DATED 30.10.2013 PASSED U/S. 143(3) OF THE ACT. AGAINST THE ASSESSMENT ORDER, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 24. 9.2014 HAS DISMISSED THE APPEAL OF THE ASSESSEE. 4. BEING AGGRIEVED BY THE SAME, THE ASSESSEE IS BEFO RE THE TRIBUNAL. 5. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSESS EE SUBMITTED THAT THE ISSUES IN DISPUTE ARE SQUARELY COVERED BY T HE DECISION OF THE G-BENCH, ITAT, NEW DELHI IN ASSESSEES OWN CASE DEC IDED ON 08.04.2015 PASSED IN ITA NO. 1481/DEL/2013 (AY 2009-1 0) WHEREIN THE TRIBUNAL HAS REMITTED BACK THE ISSUES TO AO FOR R E-ADJUDICATE THE SAME AND PASS A FRESH ORDER. HE FURTHER STATED THAT PU RSUANT TO THE TRIBUNALS ORDER DATED 08.04.2015, THE AO OBSERVED THE INCOME AS DECLARED IN THE INCOME TAX RETURN IS BEING TAKEN AS THE INCOME FROM 5 THE SAID PROPERTY AND ACCEPTED THE TAXABLE INCOME AS PER APPEAL EFFECT ORDER DATED 29.7.2015 AND ASSESSED THE SAME AT RS. 45,39,100/- VIDE ORDER 16.2.2016 PASSED U/S. 143(3 )/254 OF THE INCOME TAX ACT, 1961. IN VIEW OF ABOVE, HE REQUESTE D THAT ISSUES IN DISPUTE MAY BE DECIDED IN FAVOUR OF THE ASSESSEE BY ACCEPTING THE DECLARED INCOME OF RS. 63,40,520/- AS ASSESSED INCOM E. 6. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS OF TH E AUTHORITIES BELOW AND REITERATED ON THE FINDINGS OF THE AUTHORIT IES BELOW. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECO RDS, ESPECIALLY THE IMPUGNED ORDER AS WELL AS THE DECISION OF THE G-BENCH, ITAT, NEW DELHI IN ASSESSEES OWN CASE DECIDED ON 0 8.04.2015 PASSED IN ITA NO. 1481/DEL/2013 (AY 2009-10) WHEREIN THE TRIB UNAL HAS REMITTED BACK THE ISSUES TO AO FOR RE-ADJUDICATE THE S AME AND PASS A FRESH ORDER. WE FURTHER NOTE THAT PURSUANT TO THE TRIBU NALS ORDER DATED 08.04.2015, AS AFORESAID, THE AO ACCEPTED TH E TAXABLE INCOME AS PER APPEAL EFFECT ORDER DATED 29.7.2015 AND ASSESSE D THE INCOME AT RS. 45,39,100/- VIDE ORDER 16.2.2016 PASSED U/S. 14 3(3)/254 OF THE INCOME TAX ACT, 1961 IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2009-10. FOR THE SAKE OF CLARITY, WE ARE REPRODUCIN G HEREUNDER THE RELEVANT PARAGRAPHS OF THE SAID ASSESSMENT ORDER DA TED 16.2.2016 PASSED BY THE AO U/S. 143(3)/254 OF THE ACT. 6 ....HOWEVER, THE ASSESSEE HUF IS SHOWING THE RENT RECEIVED FROM M/S SUPREME TEXTILES OF RS. 15,000/- AS RENTAL INCOME WHICH IS MORE THAN THE STANDARD RENT OF RS. 10,060/-. THE RENTAL EXPENDITURE DEBITE D IN THE P&L A/C OF THE M/S SUPREME TEXTILES IS ALSO RS. 15,000/- ONLY AS SEEN FROM THE SUBMISSION OF P&L A/C. THE INCOME AS DECLARED IN THE INCOME TAX RETURN IS BEING TAKEN AS THE INCOME FROM THE SAID PROPERTY. IN THE LIGHT OF THE ABOVE DISCUSSION, FACTS OF THE C ASE, THE FINDINGS AFTER DUE VERIFICATION AND ON APPLICABILITY OF CASE LAWS REFERRED ABOVE, THE TAXABL E INCOME AS PER APPEAL EFFECT ORDER U/S. 254/250/143(3) DATED 29.7.2015 OF RS. 45,39,104/- (ROUNDED OFF RS. 45,39,100/- WAS BEING ACCEPTED AS ASSESSED INCOME. INCOME ASSESSED AT RS. 45,39,100/- CREDIT OF PRE-PAID TAXES /TDS AND SELF ASSESSMENT TAX IS BEING GIVEN WHILE COMPUTING THE TAX LIABILITY. INTEREST AS PER APPLICABLE PROVISIONS OF SECTION 234A/234B/234C/234D CHARGED AND ITNS 150 ISSUED. 7 7.1 AFTER PERUSING THE AFORESAID ASSESSMENT ORDER DAT ED 16.2.2016 RELEVANT TO ASSESSMENT YEAR 2009-10 WHEREIN THE SIMIL AR ISSUES AS INVOLVED IN THIS APPEAL WERE RAISED AND PURSUANT TO THE TRIBUNALS DIRECTIONS, AS AFORESAID, THE AO HAS ACCEPTED THE D ECLARED INCOME AS ASSESSED INCOME. THEREFORE, IN OUR CONSIDERED OPINI ON BY FOLLOWING THE RULE OF CONSISTENCY, THE ISSUES IN DISPUTE NEED TO BE DECIDED IN FAVOUR OF THE ASSESSEE AND ACCORDINGLY, THE DECLARED I NCOME OF RS.63,40,520/- WAS ASSESSED ON THE SAME AMOUNT AND INTEREST AS PER APPLICABLE PROVISIONS OF SECTION 234A, 234B, 234C & 234D OF THE ACT SHALL BE CHARGED, IF ANY. 8. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 03-07.2018. SD/- SD/- (PRASHANT MAHARISHI) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 03-07-2018 *SR BHATNAGAR* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR 8