Smt.Meena Jobby, Palakkad V. The ITO, Palakkad

ITA 589/COCH/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3197 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-03-2020
• Assessment Year: 2015-2016
• Appeal Filed On: 16-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANTHOM BOSE
• Assessee Lawyers: PADMANATHAN K.V.
• Keywords: Unexplained cash credit; Revision of order; Set aside
• Section: 68; 143(3); 201; 44AB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI CHANDRA POOJAR I, AM & SHRI GEORGE GEORGE K, JM ITA NO. 589 / COCH/20 19 : ASST.YEAR 201 5 - 201 6 SMT.MEENA JOBY CHUNGATH VILLA METTUPALAYAM STREET SULTANPET PALAKKAD 678 001. PAN : ACOPJ6545P . VS. THE INCOME TAX OFFICER WARD 1 PALAKKAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SRI.PADMANATHAN K.V., CA RESPONDENT BY : SRI. SANTHOM BOSE, CIT - DR DATE OF HEARING : 10.03.2020 DATE OF PRONOUNCEMENT : 10 .03.2020 O R D E R PER GEORGE GEORGE K, JM : THIS APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX DATED 26.08 .2019, PASSED/S 263 OF THE I.T.ACT. THE RELEVANT ASSESSMENT YEAR IS 201 5 - 201 6 . 2. THE SOLITARY ISSUE ARGUED BY THE LEARNED AR IS THAT THE ASSESSMENT ORDER IS NOT PREJUDICIAL TO THE INTEREST OF THE REVENUE. ACCORDING TO THE LEARNED AR, EVEN ASSUMING THAT BAKERY AND FOOD PRODUCT OF RS.6,00,000 AND INCOME DECLARED UNDER THE HEAD INCOME FR OM OTHER SOURCES AMOUNTING TO RS.35,00,000 IS ASSESSED U/S 68 R.W.S. 115BBE OF THE I.T.ACT , THERE WOULD NOT BE ANY ADDITIONAL TAX LIABILITY SINCE ASSESSEE ITA NO. 589 / COCH /20 19 SMT.MEENA JOBY. 2 IS HAVING LOSS FROM INCOME FROM HOUSE PROPERTY AMOUNTING TO RS. 50,09,687 . 3. THE BRIEF FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR 201 5 - 201 6 , THE RETURN OF INCOME WAS FILED ON 30.09.2015 . THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE I.T.ACT ON 07.12.2017 . SUBSEQUENTLY NOTICE U/S 263 OF THE I.T.ACT WAS ISSUED. THE REASON FOR ISSUANCE OF NOTICE U/S 263 OF THE I.T.ACT , READS AS FOLLOW: IN COMPUTING TOTAL INCOME, APART FROM BAKERY / FOOD PRODUCTS INCOME (BUSINESS) OF RS.6,00,000/ - , THE ASSESSEE HAD RETURNED THE FOLLOWING UNDER INCOME FROM OTHER SOURCES. (I) SHARE FROM FOOD COURT RS.25,00,000 (II) INCOME FROM DISPLAY RS. 5,00,000 (III) INCOME FROM DAIRY FARM RS. 5,00,000 ---------------- TOTAL RS.35,00,000 ============ NO DOCUMENTARY EVIDENCES ARE AVAILABLE IN THE FILE IN SUPPORT OF THIS INCOME. UNDER SECTION 68 RWS 115BBE UNEXPLAINED CASH CREDIT IS TO BE TAXED @ 30% WITHOUT ALLOWING ANY DEDUCTION FOR EXPENDITURE UNDER ANY OTHER PROVISIONS OF THE ACT. FURTHER, ASSESSEES CASE IS COVERED UNDER 44AB AUDIT REPORT. WHY THESE RECEIPTS WERE NOT RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE WAS NOT EXPLAINED DURING ASSESSMENT PROCEEDINGS. 4. THE ASSESSEES AR APPEARED FROM TIME TO TIME AND FILED OBJECTIONS TO THE PROPOSED REVISION U/S 263 OF THE I.T.ACT. IT WAS SUBMIT TED THAT DURING THE ASSESSMENT YEAR 2015 - 2016, ITA NO. 589 / COCH /20 19 SMT.MEENA JOBY. 3 THE ASSESSEE WAS HAVING LOSS FROM HOUSE PROPERTY AMOUNTING TO RS.50,09,687, WHICH CAN BE SET OFF AGAINST ANY ADDITION MADE U/S 68 OF THE I.T.ACT. THE CIT, HOWEVER, REJECTED THE CONTENTIONS RAISED BY THE ASSESS EE. THE CIT SET ASIDE THE ASSESSMENT WITH THE DIRECTION TO THE ASSESSING OFFICER TO REDO THE ASSESSMENT DE NOVO AFTER OBTAINING AND VERIFYING ALL THE RELEVANT DETAILS. 5. AGGRIEVED BY THE ORDER OF THE CIT DATED 16.08 .2019, PASSED U/S 263 OF THE I.T.ACT, THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IN QUESTION IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HONBLE KERALA HIGH COURT IN THE CASE OF VIJAYA HOSPI TALITY AND RESORTS LTD. V. CIT [(2019) 419 ITR 322 (KER.)] . THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDER PASSED U/S 263 OF THE I.T.ACT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE HONBLE KERALA H IGH COURT IN THE CASE OF VIJAYA HOSPITALITY AND RESORTS LTD. (SUPRA) HAD CATEGORICALLY HELD THAT THE AMENDMENT WHICH PROHIBITS / RESTRICTS THE SET OFF OF LOSSES AGAINST INCOME FROM OTHER SOURCES, WAS INSERTED BY THE FINANCE ACT, 2016 WITH EFFECT FROM 01.04 .2017 ONLY, I.E. FROM ASSESSMENT YEAR 2017 - 2018 ONWARDS. IN THE INSTANT CASE, ADMITTEDLY, THE ASSESSEE WAS HAVING LOSS FROM HOUSE PROPERTY TO THE TUNE OF RS. 50,09,687 . EVEN ASSUMING THAT THE NET INCOME FROM BAKERY / FOOD PRODUCTS ESTIMATED AT RS.6 ITA NO. 589 / COCH /20 19 SMT.MEENA JOBY. 4 LAKH AND INCOME DECLARED UNDER THE HEAD INCOME FROM OTHER SOURCES AMOUNTING TO RS.35 LAKH ARE TO BE TREATED AS UNEXPLAINED CREDIT, T O BE ADDED U/S 68 R.W.S. 115BBE OF THE ACT, THERE WOULD NOT BE ANY DIFFERENCE IN TAX LIABILITY, SINCE THE LOSS INCOME FROM HOUSE PR OPERTY COULD BE SET OFF AGAINST ANY ADDITION U/S 68 OF THE I.T.ACT, IN VIEW OF THE JUDGMENT OF THE HONBLE KERALA HIGH COURT IN THE CASE OF VIJAYA HOSPITALITY AND RESORTS LTD. (SUPRA) . IN THE INSTANT CASE, THE CONCERNED ASSESSMENT YEAR IS 201 5 - 201 6 . THEREF ORE, THE AMENDMENT BROUGHT ABOUT BY THE FINANCE ACT, 2016 IN VIEW OF THE HONBLE KERALA HIGH COURT IN THE CASE OF VIJAYA HOSPITALITY AND RESORTS LTD. (SUPRA) DOES NOT HAVE APPLICATION FOR THE ASSESSMENT YEAR UNDER CONSIDERATION . HENCE , THE ASSESSMENT ORDER DATED 07.12.2017 , FOR THE ASSESSMENT YEAR 2015 - 2016, CANNOT BE STATED TO BE AN ORDER, WHICH IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE CIT U/S 263 OF THE I.T.ACT IN VIEW OF THE JU DGMENT OF THE HONBLE KERALA HIGH COURT IN THE CASE OF VIJAYA HOSPITALITY AND RESORTS LTD. (SUPRA). IT IS ORDERED ACCORDINGLY. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 10 TH DAY OF MARCH, 2020 . SD/ - SD/ - ( CHANDRA POOJARI ) ( GEORGE GEORGE K ) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN ; DATED : 10 TH MARCH, 2020 . DEV A DAS G * ITA NO. 589 / COCH /20 19 SMT.MEENA JOBY. 5 COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, COCHIN 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT, THRISSUR 4. THE JCIT, PALAKKAD RANGE, PALAKKAD. 5. DR, ITAT, COCHIN 6 . GUARD FILE.