MILAN PLAST P.LTD, MUMBAI V. DCIT 8(2), MUMBAI

ITA 7187/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2795 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 09-12-2013
• Court: TRIBUNAL
• Assessee Lawyers: VISHWAS MEHANDALE

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B , BENCH MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV , JM & SHRI R.C.SHARMA, AM ./ ITA NO . 7187 / MUM/20 1 3 ( / ASSESSMENT YEAR : 20 0 9 - 20 10 ) M/ S MILAN PLAST PVT. LTD., B - 16, NAND BHAVAN INDUSTRIAL ESTATE, MAHAKALI CAVES ROAD, ANDHERI (E), MUMBAI - 400093 VS. DCIT - 8(2), MUMBAI ./ ./ PAN/GIR NO. : A A ACM 3478 M ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI VISHWAS MEHANDALE /REVENUE BY : SHRI AIRIJU JAIKARAN / DATE OF HEARING : 0 9 / 11 / 2015 / DATE OF PRONOUNCEMENT 09/11 /2015 / O R D E R PER R.C.SHARMA (A.M) : TH I S IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), DATED 10 - 10 - 2013 , FOR THE ASSESSMENT YEAR 200 9 - 10 , IN THE MATTER OF ORDER P ASSED U/S.143(3) OF THE I.T.ACT . 2. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED FOR ADDITION UNDER THE HEAD INCOME F ROM HOUSE PROPERTY. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FROM THE RECORD WE FOUND THAT DURING THE COURSE OF SCRUTINY ASSESSMENT THE AO FOUND THAT ASSESSEE IS OWNING A RESIDENTIAL FLAT, HOWEVER, NO INCOME FROM HOUSE PROPERTY WAS SHOWN. IT WAS EXPLAINED THAT FLAT WAS PURCHASED FOR GIVING TO THE DIRECTORS FOR THE PURPOSE OF THEIR RESIDENCE AS IT WAS CONVENIENT FOR THE COMPANY TO HOUSE THE DIRECTOR NEAREST TO THE WORKING PLACE SO THAT THE DIRECTORS CAN GIVE MORE ATTENTION TO THE BUSINESS O F THE ITA NO. 7187 /1 3 2 COMPANY. SINCE THE INCOME FROM HOUSE PROPERTY WAS NEITHER ADDED IN THE HANDS OF THE ASSESSEE COMPANY NOR SHOWN AS PERQUISITE IN THE HANDS OF THE DIRECTORS, THE AO ADDED THE SAME IN ASSESSEES INCOME. 4. BY THE IMPUGNED ORDER THE CIT(A) CONFIRMED THE ACTION OF THE AO BY OBSERVING THAT ASSESSEE COMPANY HAS NOT CHARGED ANY TAX ON THE VALUE OF PERQUISITE GIVEN TO THE DIRECTORS, THIS CLEARLY PROVES THAT ASSESSEE COMPANY HAD NO INTENTION TO GIVE THE RENT FREE ACCOMMODATION TO THE DIRECTORS FOR ITS BUSINESS PURPOSE. A GAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5 . WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT ASSESSEE HAS PURCHASED FLAT NO. B - 42, SWAPNASHEEL BUILDING, VILE PARLE (E) . THE FLAT WAS GIVEN TO THE DIRECTORS FOR THE PURPOSE OF TH EIR RESIDENCE. AS PER LD. AR SINCE THE FLAT WAS USED FOR THE PURPOSE OF BUSINESS, ITS INCOME WAS NOT ASSESSABLE U/S.22 OF THE IT ACT AS INCOME FROM HOUSE PROPERTY. THERE IS NO DISPUTE TO THE FACT THAT ASSESSEE HAS USED THE FLAT FOR THE PURPOSE OF BUSINESS . HOWEVER, NO BOARD RESOLUTION WAS PLACED TO THE EFFECT THAT IT WAS GIVEN TO THE DIRECTORS ON FREE OF RENT, NOR THE COMPANY HAS DEDUCTED ANY TAX ON THE PERQUISITE VALUE OF THE FLAT GIVEN TO THE DIRECTORS ON FREE OF RENT. THERE IS NO DISPUTE TO THE WELL SET TLED LEGAL PROPOSITION THAT HOUSE PROPERTY PURCHASED FOR BUSINESS PURPOSE AND USED FOR BUSINESS PURPOSE CANNOT BE BROUGHT TO TAX U/S.22 OF THE ACT. HOWEVER, AT THE VERY SAME TIME, ASSESSEE HAS TO SHOW THE USE OF SUCH HOUSE PROPERTY FOR THE PURPOSE OF ITS B USINESS. BY NOT DEDUCTING THE TAX AT SOURCE ON THE PERQUISITE VALUE OF RENT FREE ACCOMMODATION GIVEN TO THE DIRECTORS , THE ITA NO. 7187 /1 3 3 ASSESSEE HAS NOT SUBSTANTIATED ITS CLAIM OF USE OF FLAT FOR THE PURPOSE OF BUSINESS , NOR ANY BOARD RESOLUTION WAS BROUGHT TO OUR NOTI CE TO THIS EFFECT . IT IS ALSO NOT CLEAR FROM THE RECORD AS TO WHETHER THE DIRECTOR HAS OFFERED PERQUISITE VALUE IN ITS INCOME TAX RETURN. IN THE INTEREST OF JUSTICE, WE RESTORE THE MATTER BACK TO THE FILE OF AO FOR DECIDING AFRESH AFTER GIVING SUFFICIENT O PPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 09/11 / 201 5 . SD/ - SD/ - ( SHAILENDRA KUMAR YADAV ) ( R.C .SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 13/11 /201 5 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APP ELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//