DCIT 2(1), MUMBAI V. BALAJI INFRASTRUCTURE & DEVELOPMENT CO. LTD, MUMBAI

ITA 71/MUM/2014

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8351 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 03-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMATHA MULLAMUDI LD
• Keywords: Business income; Depreciation; Additional evidence; Tax effect
• Section: 143(3); 68; 69; 37

Judgement Text

1 BALAJI INFRASTRUCTURE & DEVELOPMENT COMPANY LTD. ASSESSMENT YEAR-2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.71/MUM/2014 ( / ASSESSMENT YEAR:2010-11 ) INCOME TAX OFFICER - 2 ( 1 ) (1) ROOM NO.561, 5TH FLOOR AAYKAR BHAVAN, M.K. ROAD MUMBAI-400 020. / VS. M/S. BALAJI INFRASTRUCTURE & DEVELOPMENT CO. LTD. NEW EXCELSIOR BUILDING, A.K. NAYAK MARG, FORT, MUMBAI-400 001. ! ./ ! ./PAN/GIR NO. AAACB 8155 C ( %& /APPELLANT ) : ( '(%& / RESPONDENT ) & ./ I.T.A. NO.31/MUM/2014 ( / ASSESSMENT YEAR:2010-11 ) M/S. BALAJI INFRASTRUCTURE & DEVELOPMENT CO. LTD. NEW EXCELSIOR BUILDING, A.K. NAYAK MARG, FORT, MUMBAI-400 001. / VS. INCOME TAX OFFICER - 2(1)(1) ROOM NO.561, 5TH FLOOR AAYKAR BHAVAN, M.K. ROAD MUMBAI-400 020. ! ./ ! ./PAN/GIR NO. AAACB 8155 C ( %& /APPELLANT ) : ( '(%& / RESPONDENT ) REVENUE BY : MS. SAMATHA MULLAMUDI-LD.SR.DR ASSESSEE BY : NONE / DATE OF HEARING : 30/09/2019 / DATE OF PRONOUNCEMENT : 04/10/2019 2 BALAJI INFRASTRUCTURE & DEVELOPMENT COMPANY LTD. ASSESSMENT YEAR-2010-11 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER):- 1. THESE ARE CROSS-APPEALS FOR ASSESSMENT YEAR [AY] 2010-11 ASSAILING THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEAL S)-4 MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO. CIT(A)-4/IT-69/ITO 2(1)(1)/2012-13 DATED 28/10/2013 ON CERTAIN GROUNDS OF APPEAL. 2. NONE HAS APPEARED FOR ASSESSEE AND NO VALID ADJO URNMENT APPLICATION IS ON RECORD. THE PERUSAL OF ORDER SHEE T ENTRIES WOULD REVEAL THAT THE ASSESSEE HAS REMAINED NEGLIGENT IN ATTENDI NG PROCEEDINGS ON SEVERAL OCCASIONS. LEFT WITH NO OPTION, WE PROCEED WITH DISPOSAL OF APPEALS AFTER HEARING LEARNED DEPARTMENTAL REPRESENTATIVE A ND ON THE BASIS OF MATERIAL ON RECORD. 3.1 THE ASSESSEE, BEING RESIDENT CORPORATE ASSESSEE , HAS BEEN ASSESSED U/S 143(3) ON 26/12/2012 WHEREIN THE INCOM E HAS BEEN DETERMINED AT RS.231.50 LACS AFTER CERTAIN ADDITION S / DISALLOWANCE AS AGAINST NIL RETURN FILED BY THE ASSESSEE ON 13/10/2010. 3.2 DURING ASSESSMENT PROCEEDING, IT TRANSPIRED THA T THE ASSESSEE REFLECTED RECEIPTS OF RS.61.74 LACS IN THE PROFIT & LOSS ACCOUNT AND CLAIMED EXPENDITURE OF RS.94.70 LACS AGAINST THE SA ME RESULTING INTO LOSS OF RS.32.95 LACS. THE SAID RECEIPTS INCLUDED AN AMOUNT OF RS.12 LACS BEING RENTAL INCOME FROM CERTAIN OFFICE PREMISES AND A YA CHT (VESSEL) WHICH WAS STATED TO BE RENTED OUT TO AN ENTITY NAMELY DIGHI P ORT LIMITED. THE LD. AO, FORMING A VIEW THAT THE INCOME WAS TO BE ASSESSED A S INCOME FROM HOUSE 3 BALAJI INFRASTRUCTURE & DEVELOPMENT COMPANY LTD. ASSESSMENT YEAR-2010-11 PROPERTY PROCEEDED TO ASSESSEE THE SAME AS INCOME F ROM HOUSE PROPERTY AND DISALLOW THE DEPRECATION CLAIMED ON THESE ASSET S. ALTHOUGH THE ASSESSEE DEFENDED ITS WORKING, HOWEVER, THE SAME CO ULD NOT FIND FAVOR WITH LD.AO. ACCORDINGLY, THE SAID INCOME WAS ASSESSED UN DER THE HEAD INCOME FROM HOUSE PROPERTY WHICH TRANSLATED INTO RENTAL IN COME OF RS.8.40 LACS AFTER PROVIDING FOR STATUTORY DEDUCTION U/S 24(A) @ 30%. CONSEQUENTLY, THE DEPRECIATION OF RS.7.53 LACS & RS.2.69 LACS CLAIMED ON OFFICE PREMISES & YACHT RESPECTIVELY WAS DISALLOWED WHILE FRAMING THE ASSESSMENT. 3.3 IT FURTHER TRANSPIRED THAT THE ASSESSEE CLAIMED SALARY EXPENDITURE FOR RS.31.45 LACS. SINCE THE ASSESSEE FAILED TO FURNISH THE DOCUMENTARY EVIDENCES, IN THIS REGARD, 20% OF THE SAID EXPENDIT URE WAS DISALLOWED RESULTING INTO AN ADDITION OF RS.6.29 LACS. SIMILAR LY, LEGAL & PROFESSIONAL FEES OF RS.8.71 LACS CLAIMED BY THE ASSESSEE WAS DI SALLOWED U/S 37 IN THE ABSENCE OF SATISFACTORY DOCUMENTARY EVIDENCES. 3.4 ANOTHER ADDITION MADE IN THE HANDS OF THE ASSES SEE WAS ADDITION U/S 68 FOR RS.171.99 LACS WITH RESPECT TO FRESH LOAN TA KEN FROM 5 ENTITIES DURING THE YEAR UNDER CONSIDERATION, THE DETAILS OF WHICH HAVE ALREADY BEEN EXTRACTED IN THE QUANTUM ASSESSMENT ORDER. SINCE TH E ASSESSEE FAILED TO DISCHARGE THE ONUS OF PROVING THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS, THE SAID AMOUNTS WERE ADDED TO THE IN COME OF THE ASSESSEE. 3.5 IT TRANSPIRED THAT THE ASSESSEE PURCHASED TWO F LATS DURING THE YEAR UNDER CONSIDERATION AND UPON PERUSAL OF SALE DEEDS, IT WAS OBSERVED THAT IT PAID STAMP DUTY ON THE SAME FOR RS.7.53 LACS. HOWEV ER, THE SAID PAYMENT WAS NOT REFLECTED IN THE BOOKS OF ACCOUNTS. THE ASS ESSEE SUBMITTED THAT 4 BALAJI INFRASTRUCTURE & DEVELOPMENT COMPANY LTD. ASSESSMENT YEAR-2010-11 THE STAMP DUTY WAS PAID BY DIGHI PORT LIMITED WHICH WAS LATER ON REIMBURSED BY THE ASSESSEE. HOWEVER, THE STAMP DUTY WAS INADVERTENTLY DEBITED TO SAID ENTITY INSTEAD OF OFFICE PREMISES A CCOUNT. HOWEVER, NOT CONVINCED, THE SAID AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE U/S 69. 4.1 THE ASSESSEE SUBMITTED ADDITIONAL EVIDENCES U/R 46A DURING APPELLATE PROCEEDINGS WHICH WERE SUBJECTED TO REMAND PROCEEDI NGS BEFORE LD.AO. THE LEARNED FIRST APPELLATE AUTHORITY, AFTER DUE CO NSIDERATION, UPHELD THE STAND OF LEARNED AO IN ASSESSING INCOME FROM OFFICE PREMISES UNDER THE HEAD INCOME FROM HOUSE PROPERTY. HOWEVER, WITH REGA RD TO RENTAL INCOME FROM YACHT, LD. AO WAS DIRECTED TO ASSESS THE SAME UNDER THE HEAD BUSINESS INCOME. AGGRIEVED, THE ASSESSEE IS UNDER A PPEAL BEFORE US WITH GROUND NOS. 1(A) & 1(B). THE REVENUE HAS NOT AGITAT ED THIS MATTER ANY FURTHER. 4.2. THE ADHOC DISALLOWANCE OF 20% ON ACCOUNT OF SA LARY & ALLOWANCE WAS REDUCED TO RS.2.22 LACS AFTER CONSIDERING FACTUAL M ATRIX & ASSESSEES SUBMISSIONS. SIMILARLY, THE ADDITION OF RS.7.50 LAC S OUT OF LEGAL EXPENSES OF RS.8.71 LACS WAS CONFIRMED SINCE NO SUPPORTING M ATERIAL WAS NOT FURNISHED BY THE ASSESSEE. THE ADDITION OF RS.171.9 9 LACS MADE U/S 68 WAS REDUCED TO RS.16.25 LACS AFTER CONSIDERING THE DOCUMENTARY EVIDENCES SUBMITTED BY THE ASSESSEE. FINALLY, THE A DDITION OF RS.7.53 LACS MADE U/S 69 WAS CONFIRMED. AGGRIEVED, THE ASSESSEE AS WELL AS REVENUE IS UNDER APPEAL BEFORE US. THE REVENUE IS AGITATING TH E RELIEF PROVIDED BY 5 BALAJI INFRASTRUCTURE & DEVELOPMENT COMPANY LTD. ASSESSMENT YEAR-2010-11 LD.CIT(A) U/S 68 WHEREAS THE ASSESSEE IS UNDER APP EAL AGAINST ADDITIONS CONFIRMED BY LD. CIT(A). 5. UPON CAREFUL CONSIDERATION, AT THE OUTSET, WE FI ND THAT THE REVENUES APPEAL IS NOT MAINTAINABLE IN VIEW OF RECENTLY ISSU ED LOW TAX EFFECT CIRCULAR NO.17/2019 DATED 08/08/2019 ISSUED BY CBDT [F.NO.27 9/MISC.142/2007- TTJ(PT.) GOVERNMENT OF INDIA, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE] AND THEREFORE, THE APPEAL IS NOT MAINTAINABLE. THE LD. DEPARTMENTAL REPRESENTATIVE IS UNABLE TO POINT OUT ANY EXCEPTION S IN THE APPEAL AS PROVIDED IN PARA-10 OF CIRCULAR NO. 3 OF 2018 DATED 11/07/2018 OR IN ANY SUBSEQUENT CIRCULAR / INSTRUCTIONS. IN VIEW OF THE SAME, THE REVENUES APPEAL IS DISMISSED. AT THE SAME TIME, A LIBERTY IS GRANTE D TO REVENUE TO SEEK RECALL OF THE APPEAL, IF AT A LATER STAGE, IT IS FOUND THA T THE MATTER IS COVERED BY ANY EXCEPTIONS PROVIDED IN ANY OF THE CIRCULAR OR IN CA SE THE TAX EFFECT OF THE ADDITIONS IN THE APPEAL AS AGITATED BY REVENUE EXCE EDS THE PRESCRIBED MONETARY LIMIT. 6. SO FAR AS THE ASSESSEES APPEAL IS CONCERNED, WE FIND THE FIRST APPELLATE AUTHORITY HAS CLINCHED ALL THE ISSUES IN CORRECT PERSPECTIVE AFTER DUE CONSIDERATION OF FACTUAL MATRIX. NOTHING ON REC ORD COMPEL US TO TAKE ANY OTHER VIEW IN THE MATTER. NO NEW MATERIAL HAS B EEN BROUGHT ON RECORD. THEREFORE, BY CONFIRMING THE STAND OF LD.CIT(A), WE DISMISS ASSESSEES APPEAL. 7. BOTH THE APPEALS STAND DISMISSED. 6 BALAJI INFRASTRUCTURE & DEVELOPMENT COMPANY LTD. ASSESSMENT YEAR-2010-11 ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH OCTOBER, 2019. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 04/10/2019 SR.PS:-JAISY VARGHESE &' (' / COPY OF THE ORDER FORWARDED TO : 1. %& / THE APPELLANT 2. '(%& / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. / 0 ' 1 , 1 , / DR, ITAT, MUMBAI 6. 0 234 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.