DCIT, New Delhi V. M/s. Renkon Partners, New Delhi

ITA 694/DEL/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7587 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 02-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 04-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Business income; Depreciation; Rule of consistency
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH F FF F : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY, JUDICIAL , JUDICIAL , JUDICIAL , JUDICIAL MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NOS SS S. .. .1127/DEL/2012 & 694/DEL/2013 1127/DEL/2012 & 694/DEL/2013 1127/DEL/2012 & 694/DEL/2013 1127/DEL/2012 & 694/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEARS SS S : : : : 2008 2008 2008 2008- -- -09 & 2009 09 & 2009 09 & 2009 09 & 2009- -- -10 1010 10 ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF IN ININ INCOME TAX, COME TAX, COME TAX, COME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -31(1), C.R. BUILDING, 31(1), C.R. BUILDING, 31(1), C.R. BUILDING, 31(1), C.R. BUILDING, I.P. ESTATE, NEW DELHI. I.P. ESTATE, NEW DELHI. I.P. ESTATE, NEW DELHI. I.P. ESTATE, NEW DELHI. VS. VS. VS. VS. M/S RENKON PARTNERS, M/S RENKON PARTNERS, M/S RENKON PARTNERS, M/S RENKON PARTNERS, 9 99 9 TH THTH TH FLOOR, DLF CENTRE, FLOOR, DLF CENTRE, FLOOR, DLF CENTRE, FLOOR, DLF CENTRE, SANSAD MARG, SANSAD MARG, SANSAD MARG, SANSAD MARG, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN : AAFFR2063P. PAN : AAFFR2063P. PAN : AAFFR2063P. PAN : AAFFR2063P. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIVEK WADEKAR, CIT-DR. RESPONDENT BY : SHRI R.S. SINGHVI, CA. ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : :: : ITA NO.1127/DEL/2012 : ITA NO.1127/DEL/2012 : ITA NO.1127/DEL/2012 : ITA NO.1127/DEL/2012 :- -- - THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XXVI, NEW DELHI DATED 23 RD DECEMBER, 2011 FOR THE AY 2008-09. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- (A) WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD.CIT(A) WAS JUSTIFIED IN DELETING THE ADDIT ION OF RS.11,07,97,978/- MADE BY AO DISALLOWING DEDUCTION U/S 24(1) OF I.T. ACT. (B) WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD.CIT(A) WAS JUSTIFIED IN TREATING THE RENTA L INCOME AS INCOME FROM HOUSE PROPERTY WHEN THE BUSINESS OF THE ASSESSEE CONSISTED OF LETTING OUT/R ENTING OUT OF BUSINESS CENTRE. ITA-1127/D/2012 & 694/D/2013 2 (C) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY/ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. 3. AT THE TIME OF HEARING BEFORE US, IT IS SUBMITTE D BY THE LEARNED COUNSEL THAT THE SIMILAR ISSUE HAS BEEN CONSIDERED BY THE ITAT IN ANOTHER CASE OF THE GROUP COMPANY. HE SUBMITTED TH AT THE ASSESSEE IS ONE OF THE GROUP CONCERNS OF DLF GROUP AND IN THIS CONCERN WHICH IS A PARTNERSHIP FIRM, CERTAIN ASSETS ARE OWNED ON WHICH RENT IS BEING RECEIVED. THE ASSETS ARE KEPT AS INVESTMENT AND TH E ASSETS KEPT IN THIS FIRM ARE NOT BEING STOCK IN TRADE. THAT RENT IS RECEIVED YEAR AFTER YEAR AND IS BEING DISCLOSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY. IN ALL THE PRECEDING YEARS, THE INCOME DISCLOSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY HAS BEEN ACCEPTED. HE SUBMITTED THAT THE SIMILAR ISSUE HAS BEEN CONSIDERED BY THE I TAT IN THE CASE OF ACIT VS. ATRIA PARTNERS VIDE ITA NO.2490/DEL/2012 A ND ACIT VS. PLAZA PARTNERS VIDE ITA NO.1265/DEL/2012 AND 695/DEL/2013 . HE SUBMITTED THAT THOSE CONCERNS ARE ALSO ENTITIES OF THE DLF GR OUP AND THE FACTS ARE IDENTICAL. HE, THEREFORE, SUBMITTED THAT THE ORDER OF LEARNED CIT(A) SHOULD BE SUSTAINED. 4. LEARNED DR, ON THE OTHER HAND, FAIRLY ADMITTED T HAT THE FACTS IN THE CASE OF THE ASSESSEE ARE MORE OR LESS SIMILAR T O THE FACTS IN THE CASE OF ATRIA PARTNERS (SUPRA) AND PLAZA PARTNERS ( SUPRA) EXCEPT ONE MAJOR DIFFERENCE. HE FURTHER SUBMITTED THAT DURING THE ACCOUNTING YEAR RELEVANT TO THE ASSESSMENT YEAR 2008-09, THERE WAS CHANGE IN THE CONSTITUTION OF THE ASSESSEE FIRM AND THE ASSESSING OFFICER HAS REFERRED TO THE PARTNERSHIP DEED WHEREIN IT WAS MENTIONED TH AT THE PARTNERS OF THE FIRM AGREED TO CONTINUE TO CARRY ON THE BUSINES S OF SETTING UP OF COMMERCIAL COMPLEX FOR SALE OR FOR LETTING OUT ETC. THUS, AS PER PARTNERSHIP FIRM, THE PRIMARY BUSINESS OF THE ASSES SEE IS OF SETTING UP OF COMMERCIAL COMPLEX FOR SALE. IN VIEW OF THE ABOV E DECISION OF ITAT IN ITA-1127/D/2012 & 694/D/2013 3 THE CASES OF ATRIA PARTNERS (SUPRA) AND PLAZA PARTN ERS (SUPRA) RELIED UPON BY THE LEARNED COUNSEL WOULD NOT BE APPLICABLE . HE, THEREFORE, SUBMITTED THAT THE ORDER OF THE ASSESSING OFFICER A S WELL AS LEARNED CIT(A) IS QUITE JUSTIFIED. THE SAME SHOULD BE SUST AINED. 5. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED RELEVANT MATERIAL PLACED BEFORE US. WE FIND THAT IN PARAGRAPH NOS.7.1.1 & 7.1.2, LEARNED CIT(A) HAS REC ORDED THE FOLLOWING FACTS :- 7.1.1 IT IS AN ADMITTED FACT THAT THE APPELLANT IS THE OWNER OF ONLY ONE PROPERTY DURING THE YEAR UNDER APPEAL, WHICH WAS LET OUT. IT IS ALSO BORNE FROM R ECORD AND PAST HISTORY OF THE CASE THAT THE INCOME ACCRUE D FROM LETTING OUT SINCE INCEPTION HAS BEEN DISCLOSED AS INCOME FROM HOUSE PROPERTY AND ASSESSED AS SUCH BY THE ASSESSING AUTHORITIES. THE AR OF THE APPELLANT PLEADED THAT IT IS THE OWNERSHIP AND THE CHARACTER OF INCOME WHICH DETERMINES THE HEAD OF INCOME UNDER WHICH INCOME IS TO BE ASSESSED AND NOT OTHERWISE UNLESS PROVED CONTRARY BY THE AO. 7.1.2 IT IS ALSO A FACT THAT THE APPELLANT HAS SHOW N THIS ASSET AS A FIXED ASSET AND NOT STOCK-IN-TRADE IN ITS BALANCE SHEET WHICH WAS VERIFIABLE FROM THE COPY OF THE ANNUAL ACCOUNTS PLACED AS PART OF THE PAPER BOOK DURING THE APPELLATE PROCEEDINGS. 6. THE ABOVE FACTS RECORDED BY THE LEARNED CIT(A) H AVE NOT BEEN CONTROVERTED BEFORE US. THEREAFTER, THE LEARNED CI T(A) HAS RECORDED VARIOUS JUDICIAL PRONOUNCEMENTS AND HAS ALSO CONSID ERED THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE ASSESSING OFFICER AND ARRIVED AT THE FOLLOWING CONCLUSION :- 7.1.7 I HAVE CONSIDERED THE FACTS OF THE CASE, SUBMISSIONS OF THE AR, RULE OF CONSISTENCY AND THE JUDICIAL DECISIONS, SUPRA. IT IS NOTED THAT THE AS SESSING OFFICER IGNORING THE FACT THAT THE PROPERTY HAS BEE N ITA-1127/D/2012 & 694/D/2013 4 SHOWN AS A FIXED CAPITAL ASSET BY THE APPELLANT AND WITHOUT PLACING ON RECORD ANY MATERIAL TO SUPPORT H IS FINDING THAT THE RENTAL INCOME WAS TO BE ASSESSED A S BUSINESS INCOME AND NOT INCOME FROM PROPERTY, IS PATENTLY NOT JUSTIFIED. ON THE OTHER HAND, ON FACT S OF THE CASE, JUDICIAL DECISIONS, SUPRA, AND FOLLOWING RULE OF CONSISTENCY, IT IS OBSERVED THAT THE INCOME FROM LE TTING OUT WAS RIGHTLY DISCLOSED UNDER THE HEAD INCOME FRO M HOUSE PROPERTY. THE ASSESSING OFFICER IS THEREFORE DIRECTED TO ASSESS THE RENTAL INCOME RECEIVED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AS PER THE PROVIS ION OF LAW AS AGAINST BUSINESS INCOME ASSESSED U/S 14 3(3) OF THE ACT. THIS GROUND OF APPEAL IS ACCORDINGLY ALLOWED. 7. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDE S AND THE FACTS OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE AB OVE CONCLUSION OF THE LEARNED CIT(A). THE ASSESSEE IS OWNER OF ONE BUILD ING WHICH WAS LET OUT FROM PAST SEVERAL YEARS. THE ASSET WHICH IS LE T OUT IS HELD AS INVESTMENT AND NOT AS STOCK IN TRADE. IN ALL THE P RECEDING YEARS, RENTAL INCOME IS SHOWN AS INCOME FROM HOUSE PROPERTY AND W HICH HAS BEEN ACCEPTED BY THE REVENUE AS SUCH. THE LEARNED DR HA S ARGUED AT THE TIME OF HEARING BEFORE US THAT RULE OF RES-JUDICATA DOES NOT APPLY TO INCOME TAX PROCEEDINGS. IT IS TRUE THAT THE RULE O F RES-JUDICATA DOES NOT APPLY TO INCOME TAX PROCEEDINGS BUT, AT THE SAME TI ME, THE RULE OF CONSISTENCY DOES APPLY. WHEN THE FACTS ARE SIMILAR AND RENTAL INCOME FROM THE SAME PROPERTY IS ACCEPTED AS INCOME FROM H OUSE PROPERTY IN THE PRECEDING YEARS, THERE CANNOT BE ANY JUSTIFICAT ION TO TREAT THE RENTAL INCOME AS BUSINESS INCOME IN THE YEAR UNDER CONSIDERATION WITHOUT THERE BEING ANY CHANGE IN THE FACTS OR IN L AW. MOREOVER, THE ASSESSEE IS NOT CARRYING ON ANY ACTIVITY WHICH CAN BE SAID TO BE IN THE NATURE OF BUSINESS ACTIVITY. IT IS SIMPLY RECEIVIN G THE RENT OF THE BUILDING OWNED BY IT. WE ALSO FIND THAT ON IDENTIC AL FACTS, ITAT A BENCH IN THE CASE OF ATRIA PARTNERS (SUPRA) HELD AS UNDER:- ITA-1127/D/2012 & 694/D/2013 5 7. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT ASSESSEES FIRM OWNS COMMERCI AL BUILDING NAMELY DLF ATRIA IN DLF CITY, PHASE-II, GURGAON. THIS BUILDING WAS GIVEN ON RENT TO M/S CONERGYS INDIA SERVICES (P) LTD. AND THE RENTAL INC OME RECEIVED WAS SHOWN AS INCOME FROM HOUSE PROPERTY. ASSESSEE FIRM HAS A BRANCH OFFICE WHICH IS IN TRADI NG IN SHARES AND THE INCOME OF WHICH WAS SHOWN AS BUSINES S INCOME. THIS RENT WAS SHOWN UNDER THE HEAD HOUSE PROPERTY FROM ASSTT. YEAR 2003-04 ONWARDS AND THE ASSESSMENTS FOR THE A.Y. 2006-07 & 2007-08 WERE COMPLETED U/S. 143(3) ACCEPTING THE RENTAL INCOME A S INCOME FROM HOUSE PROPERTY. 7.1 AO HAS NOT DOUBTED THE OWNERSHIP OF THE ASSESSE E OR THE FACT THAT PREMISES ARE GIVEN ON RENT. AOS OBSERVATION THAT RENTAL INCOME IS TOO HIGH IS NOT A T ALL A REASON TO TREAT THE INCOME AS INCOME FROM BUSINESS. AO HAS NOT MADE OUT ANY CASE THAT ASSESSEE HAS BEEN PROVIDING SERVICES AND HENCE, THE CLAIM OF RENTAL INCOME IS TO BE DISALLOWED. WE AGREE WITH THE LD. COUNSEL OF THE ASSESSEE THAT THE INCOME TAX ACT DOE S NOT MAKE ANY DISTINCTION BETWEEN COMMERCIAL PROPERT Y AND OTHER PROPERTY FOR THE CLASSIFICATION OF INCOME FROM HOUSE PROPERTY. IN THESE CIRCUMSTANCES, NOTHING HAS BEEN BROUGHT ON RECORD BY THE AO TO SHOW THAT THE INCOME RETURNED AS HOUSE PROPERTY IS ACTUALLY INCOM E FROM BUSINESS. 7.2 IN THIS REGARD, LD. COUNSEL OF THE ASSESSEE HAS ALSO SUBMITTED THAT IF THE RENTAL INCOME IS TREATED AS I NCOME FROM HOUSE PROPERTY AND PROFESSION, THEN ASSESSEE WOULD BE ENTITLED TO DEPRECIATION ON BUILDING OF RS . 20.24 CRORES. THIS WOULD RESULT IN PROPORTIONATE REDUCTION IN THE INCOME EARNED IN THIS REGARD. 7.3 HENCE, WE AGREE THAT THERE IS NO LOGIC IN TREAT ING THE INCOME FROM HOUSE PROPERTY AS INCOME FROM BUSINESS. WE HOLD THAT NOTHING HAS BEEN BROUGHT ON RECORD BY THE AO TO SHOW THAT THE INCOME FROM HOUSE PROPERTY IS ACTUAL INCOME FROM BUSINESS. 7.4 IN THIS REGARD, WE PLACE RELIANCE UPON THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. DA LMIA PROMOTERS DEVELOPERS (P) LTD. 281 ITR 346, WHEREIN IT WAS HAS HELD THAT FOR REJECTING THE VIEW TAKEN IN E ARLIER ITA-1127/D/2012 & 694/D/2013 6 ASSESSMENT YEARS, THERE MUST BE MATERIAL CHANGE IN THE FACT, SITUATION OR IN LAW. WE FIND THAT IN THIS CASE THERE IS NO CHANGE IN THE FACTS, SITUATION OR IN LA W. HENCE, THE REVENUE CANNOT BE ALLOWED TO ADOPT A DIFFERENT STAND. THIS IS ALSO REITERATED BY THE HON BLE APEX COURT DECISION IN CIT VS. EXCEL INDUSTRIES LTD . IN CIVIL APPEAL NO. 125 OF 2013 VIDE ORDER DATED 08.10.2013. IN THIS CASE, IT WAS HELD THAT WHEN IN EARLIER ASSTT. YEARS THE REVENUE ACCEPTED THE ORDER OF THE TRIBUNAL IN FAVOUR OF THE ASSESSEE, THEN REVENUE CA NNOT BE ALLOWED TO FLIP FLOP ON THE ISSUE AND IT OUGHT L ET THE MATTER REST RATHER THAN SPEND THE TAX PAYERS MONEY IN PURSUING LITIGATION FOR THE SAKE OF IT. 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS A ND PRECEDENTS, WE DO NOT FIND ANY INFIRMITY IN THE ORD ER OF THE LD. CIT(A). ACCORDINGLY, WE UPHOLD THE SAME. 8. SIMILAR VIEW IS TAKEN BY ITAT F BENCH IN THE C ASE OF PLAZA PARTNERS (SUPRA). LEARNED DR ALSO FAIRLY STATED TH AT THE FACTS IN THE CASE OF THE ASSESSEE AND FACTS IN THE CASE OF ATRIA PARTNERS (SUPRA) AND PLAZA PARTNERS (SUPRA) ARE MORE OR LESS SIMILAR. H E TRIED TO DISTINGUISH THE ABOVE TWO CASES ON THE GROUND THAT IN THE CASE UNDER APPEAL BEFORE US, THE ASSESSING OFFICER HAS REFERRED TO TH E PARTNERSHIP DEED WHICH MENTIONS AS UNDER:- THAT THE PARTIES HERETO HAVE AGREED TO CONTINUE TO CARRY ON THE BUSINESS OF SETTING UP COMMERCIAL COMPLEXES FOR SALE OR FOR LETTING OUT AND EARNING R ENTAL INCOME THERE FROM OR FOR RUNNING BUSINESS/CONVENTIO N CENTERS OR DEALING IN SHARES AND SECURITIES AND OTH ER MOVABLE OR IMMOVABLE ASSETS OR CARRYING ON ANY OTHE R BUSINESS OR BUSINESSES AS MAY BE MUTUALLY AGREED UPON FROM TIME TO TIME. 9. HOWEVER, FROM THE ABOVE, IT IS EVIDENT THAT THE PARTNERSHIP DEED HAS MENTIONED NOT ONLY THE SETTING UP OF THE COMMER CIAL COMPLEX FOR SALE BUT ALSO MENTIONED FOR LETTING OUT AND EARNING RENTAL INCOME THERE FROM. THAT IT IS A COMMON PRACTICE THAT THE PARTNE RSHIP DEED OR A ITA-1127/D/2012 & 694/D/2013 7 MEMORANDUM OF ASSOCIATION OF THE COMPANY ARE DRAFTE D COVERING LARGE NUMBER OF ACTIVITIES BUT WHICH OF SEVERAL ACTIVITIE S MENTIONED IN THE PARTNERSHIP DEED OR MEMORANDUM OF ASSOCIATION IS CA RRIED ON BY THE ASSESSEE WILL BE RELEVANT FOR THE PURPOSE OF ASSESS MENT UNDER THE INCOME TAX ACT. WHEN FROM THE FACTS OF THE ASSESSE ES CASE IT IS EVIDENT THAT THE ASSESSEE OWNS A COMMERCIAL COMPLEX FOR LETTING OUT AND EARNING RENTAL INCOME THAN MERELY BECAUSE THE P ARTNERSHIP ALSO PERMITS THE ASSESSEE TO SALE THE COMMERCIAL COMPLEX WILL NOT CHANGE THE NATURE OF RENTAL INCOME. ORDINARILY, THE RENTA L INCOME FROM A BUILDING IS TO BE ASSESSED UNDER THE HEAD INCOME FR OM HOUSE PROPERTY. IN VIEW OF THE TOTALITY OF ABOVE FACTS, WE DO NOT F IND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF LEARNED CIT(A). THE SA ME IS SUSTAINED AND REVENUES APPEAL FOR AY 2008-09 IS DISMISSED. ITA NO.694/DEL/2013 : ITA NO.694/DEL/2013 : ITA NO.694/DEL/2013 : ITA NO.694/DEL/2013 :- -- - 10. GROUND NOS.1 & 2 OF THE REVENUES APPEAL READ A S UNDER:- 1. THE CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.11,74,06,143/- MADE BY THE AO BY TREATING RENTAL INCOME AS BUSINESS INCOME. 2. THE CIT(A) HAS ERRED IN DIRECTING THE AO TO ASSE SS RENTAL INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY WITHOUT APPRECIATING THE FACT THAT ASSESS EE IS ENGAGED IN THE BUSINESS OF BUILDING & LETTING OUT O F COMMERCIAL COMPLEXES. 11. AT THE TIME OF HEARING BEFORE US, BOTH THE PART IES FAIRLY ADMITTED THAT THESE GROUNDS ARE IDENTICAL TO GROUND NOS.1 & 2 OF THE REVENUES APPEAL FOR AY 2008-09 AND THEREFORE, WHATEVER IS TH E OUTCOME OF THE REVENUES APPEAL FOR AY 2008-09 WOULD BE SQUARELY A PPLICABLE. WE HAVE ALREADY CONSIDERED THIS ISSUE WHILE DECIDING T HE REVENUES APPEAL FOR AY 2008-09 AND FOR THE DETAILED DISCUSSI ON ABOVE, GROUND NOS.1 & 2 OF THE REVENUES APPEAL ARE REJECTED. ITA-1127/D/2012 & 694/D/2013 8 12. GROUND NO.3 OF THE REVENUES APPEAL READS AS UN DER:- THE CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS.1,20,000/- OUT OF TOTAL ADDITION OF RS.7,96,563/ - CLAIMED U/S 57(III) OF THE IT ACT WITHOUT APPRECIAT ING THE FACT THAT THE ASSESSEE COULD NOT PROVE THAT SUCH EXPENDITURE WAS EXPENDED WHOLLY & EXCLUSIVELY FOR T HE PURPOSE OF EARNING SUCH INCOME. 13. WE HAVE HEARD BOTH THE SIDES AND PERUSED RELEVA NT MATERIAL PLACED BEFORE US. THE FACTS OF THE CASE ARE THAT T HE ASSESSEE HAS DISCLOSED THE INCOME OF `60,87,202/- UNDER THE HEAD INCOME FROM OTHER SOURCES OUT OF WHICH THE TOTAL EXPENSES INCUR RED BY THE ASSESSEE WAS `21,97,452/-. HOWEVER, THE ASSESSEE ITSELF DIS ALLOWED THE SUM OF `14,00,889/- AND CLAIMED THE DEDUCTION OF ONLY `7,9 6,563/- AGAINST THE INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER D ISALLOWED THE ENTIRE EXPENSES CLAIMED BY THE ASSESSEE AND ASSESSE D THE INCOME FROM OTHER SOURCES AT `60,87,202/-. ON APPEAL, LEA RNED CIT(A) ALLOWED THE RELIEF OF `1,20,000/- WITH THE FOLLOWING FINDIN G:- 7.3 I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS OF THE APPELLANT. I AM OF THE VIEW THA T THE APPELLANT HAS NOT BEEN ABLE TO JUSTIFY THE CLAIM OF THE ENTIRE EXPENSES. HOWEVER, CONSIDERING THE NATURE O F THE EXPENDITURE BEING OFFICE MAINTENANCE, SALARY PA ID, CONVEYANCE, LEGAL AND PROFESSIONAL ETC., IT WOULD N OT BE JUDICIOUS TO ASSUME THAT NO EXPENSES WHATSOEVER HAS BEEN INCURRED FOR EARNING AN INCOME OF OVER RS.60 L ACS FROM OTHER SOURCES. CONSEQUENTLY, KEEPING IN VIEW THE PROVISIONS OF SECTION 57(III) OF THE ACT AND THE JU DICIAL DECISIONS, SUPRA, THE APPELLANT IS ALLOWED A RELIEF OF RS.1,20,000/- (@ RS.10,000/- PER MONTH) ON ACCOUNT OF EXPENSES OR MAINTENANCE OF ITS STATUS AS A FIRM. ACCORDINGLY, THE ADDITION OF RS.6,76,563/- IS CONFI RMED. 14. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SID ES AND THE FACTS OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE AB OVE FINDING OF THE ITA-1127/D/2012 & 694/D/2013 9 LEARNED CIT(A). THE ASSESSEE HAS INCOME FROM OTHER SOURCES AMOUNTING TO `60,87,202/-, OUT OF WHICH, THE TOTAL EXPENSES ALLOWED BY THE LEARNED CIT(A) WERE ONLY `1,20,000/- WHICH IS A PPROXIMATELY 2% OF THE INCOME FROM OTHER SOURCES AND REMAINING 98% HAS BEEN TAXED. INCURRING OF 2% OF THE EXPENSES ON OFFICE MAINTENAN CE, SALARY, CONVEYANCE, LEGAL AND PROFESSIONAL FEE ETC. CANNOT BE SAID TO BE EXCESSIVE OR UNREASONABLE. THEREFORE, WE DO NOT FI ND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A). THE SAME IS SUSTAINED AND GROUND NO.3 IS REJECTED. 15. GROUND NOS.4 & 5 ARE OF GENERAL NATURE AND NEED NO SPECIFIC ADJUDICATION. 16. IN THE RESULT, THE APPEALS OF THE REVENUE ARE D ISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 12 TH DECEMBER, 2014. SD/- SD/- ( (( ( ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY ) )) ) (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 12.12.2014 VK. COPY FORWARDED TO: - 1. APPELLANT : ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -31(1), C.R. BUILDING, 31(1), C.R. BUILDING, 31(1), C.R. BUILDING, 31(1), C.R. BUILDING, I.P. ESTATE, NEW DELHI. I.P. ESTATE, NEW DELHI. I.P. ESTATE, NEW DELHI. I.P. ESTATE, NEW DELHI. 2. RESPONDENT : M/S RENKON PARTNERS, M/S RENKON PARTNERS, M/S RENKON PARTNERS, M/S RENKON PARTNERS, 9 99 9 TH THTH TH FLOOR, DLF CENTRE, SANSAD MARG, NEW DELHI. FLOOR, DLF CENTRE, SANSAD MARG, NEW DELHI. FLOOR, DLF CENTRE, SANSAD MARG, NEW DELHI. FLOOR, DLF CENTRE, SANSAD MARG, NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR