DCIT, Circle - 8, Kolkata, Kolkata V. M/s. Elite (India) Pvt. Ltd., Kolkata

ITA 719/KOL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62089 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2012
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 12-04-2010
• Court: TRIBUNAL
• Department Lawyers: A K PRAMANIK
• Assessee Lawyers: M TIWARI
• Keywords: Opportunity of being heard; Additional evidence

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [ () , ,, , , . .. .'# '#'# '#. .. . , , , , $% ] ]] ] [BEFORE HONBLE SRI GEORGE MATHAN, JM & HONBLE S RI C. D. RAO, AM] ' ' ' ' /ITA NO.719/KOL/2010 () *+/ ASSESSMENT YEAR : 2006-07 (- / APPELLANT ) - - ( /0- /RESPONDENT) D.C.I.T., CIRCLE-8, M/S.ELITE (INDIA)PVT.LTD. KOLKATA -VERSUS- KOLKATA (PAN:AAACE 6317 K) - 1 2 $/ FOR THE APPELLANT: SHRI A.K.PRAMANIK /0- 1 2 $/ FOR THE RESPONDENT: SHRI M.TIWARI 34 1 #% /DATE OF HEARING : 13.04.2012. 5* 1 #% /DATE OF PRONOUNCEMENT : 20.04.2012. $6 / ORDER ( (( ( . .. .'# '#'# '#. .. . ) )) ), , , , $% PER SHRI C.D.RAO, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST ORDE R DATED 18.01.2010 OF CIT(A) VIII, KOLKATA PERTAINING TO A.YR. 2006-07. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT LD. CIT(A) ERRED ON FACTS AND IN CIRCUMSTA NCE OF THE CASE AND IN LAW IN HOLDING THAT ANNUAL VALUE OF THE PROPERTY IS RS.4,91.642/- WHILE IT SHOULD BE RS.27,95,906/- AS PER THE SUBMISSION MADE BY THE ASSESSEE DURING THE COUR SE OF ASSESSMENT PROCEEDING. 2. THAT LD. CIT(A) ERRED ON FACTS AND IN CIRCUMSTAN CE OF THE CASE AND IN LAW IN HOLDING THAT EXPLANATION BELOW SECTION 23(1) OF THE ACT IS APPLICABLE IN THE CASE OF ASSESSEE WHEN NO EVIDENCE WAS SUBMITTED BY THE ASSESSEE BEFORE TH E ASSESSING OFFICER GIVING REASON AS TO HOW ITS CASE FALLS INTO THE CONDITIONS MENTIONED IN CLAUSE (B) OR CLAUSE ( C) OF SECTION 23(1) OF THE ACT. 3. THAT LD. CIT(A) ERRED ON FACTS AND IN CIRCUMSTAN CE OF THE CASE AND IN LAW IN HOLDING THAT ALL THE FOUR CONDITIONS MENTIONED IN RULE 4 IS SATISFIED BY THE ASSESSEE. 4. THAT LD. CIT(A) ERRED ON FACTS AND IN CIRCUMSTAN CE OF THE CASE AND IN LAW IN ADMITTING THE FRESH EVIDENCE FROM THE ASSESSEE BUT WITHOUT GI VING AN OPPORTUNITY TO THE ASSESSING OFFICER TO EXAMINE THE SAME AS PER RULE 46A AND THE REBY VIOLATING THE PROVISIONS OF RULE 46A. 5. THAT THE IMPUGNED ORDER OF THE CIT(A) IS PERVERS E AND DESERVES TO BE SET ASIDE AND THE ORDER OF THE A.O. TO BE RESTORED. 2 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR ABRO GATE ANY GROUND OF APPEAL AT THE TIME OF HEARING 3. THE ISSUE INVOLVED IN THIS APPEAL IS RELATING T O THE DETERMINATION OF ANNUAL LETTING VALUE OF THE PROPERTY 4. THE BRIEF FACTS OF THE ISSUE ARE THAT WHILE DOI NG THE SCRUTINY ASSESSMENT AO HAS ESTIMATED THE RENTAL VALUE OF ONE OF THE PROPERTIES OF ASSESSEE AT RS.23,04,264/- AGAINST THE AMOUNT OF RS.6,55,005/- SHOWN BY ASSESSEE BY OB SERVING AS UNDER :- THE ASSESSEE HAS SHOWN RENTAL INCOME OF RS.4,91,64 2/- IN FINANCIAL YEAR 2005-06. HOWEVER, AS PER SUBMISSION DATED 22.09.2008, THE AS SESSEE STATED RENTAL INCOME AS BELOW :- SL.NO . NAME OF TENANT AREA GIVEN ON RENT MONTHLY RENT 1. MOHINI EXPORTS 42,700 SQ.FEET RS.1,95,000 PER MONTH FROM APRIL, 2005 TO FEBRUARY, 2006 THEN RS.2.54,150 PER MONTH FOR MARCH, 2006 2. INSTITUTE OF TOOL ROOM 3200 SQ.MT. RS.33,063 PER MONTH TRAINING. THUS TOTAL RENT RECEIPT IS RS.27,95,906/- (RS.1.95 X 11 + RS.2,54,150 + RS.33,063 X 12). BUT ASSESSEE HAS SHOWN RENTAL RECEIPT OF RS.4,91,64 2/- ONLY FOR FULL YEAR 2005-06. SO, THERE IS SUPPRESSION OF INCOME OF RS.23,04,264/-. 4.1. ON APPEAL THE LD. CIT(A) HAS DELETED THE SAME AFTER TAKING INTO CONSIDERATION OF THE VARIOUS SUBMISSIONS BY OBSERVING AS UNDER :- IT IS SEEN FROM THE A.O.S ORDER THAT THIS ASPECT OF THE CASE HAS NOT BEEN CONSIDERED BY HIM. IT IS SEEN FROM THE PROVISIONS OF EXPLANATI ON OF SEC.23(1) OF THE ACT THAT UNREALIZED RENT CANNOT FORM PART OF THE APPELLANTS RENTAL INCOME. THE FACT THAT THERE WAS A DISPUTE WITH THE TENANT IS EVIDENT AND THAT UNREA LIZED RENT HAS BEEN REALIZED DURING THE YEAR IS EVIDENT FROM THE NOTES TO THE APPELLANTS B ALANCE SHEET AND PROFIT AND LOSS ACCOUNT. IN FACT, THE A.O. WHILE COMPUTING THE RENT AL INCOME HAS ALSO TAKEN COGNIZANCE OF RENTAL INCOME DECLARED AS PER COMPUTATION WHICH INCLUDED SUCH UNREALIZED RENT. I AM, THEREFORE, OF THE OPINION THAT THE ADDITION MADE B Y THE A.O. IS NOT IN ACCORDANCE WITH LAW AND DIRECT THAT IT BE DELETED. THIS GROUND OF A PPEAL IS DECIDED IN FAVOUR OF THE APPELLANT. 4.2. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BE FORE US. 5. AT THE TIME OF HEARING THE LD. DR APPEARING ON BEHALF OF REVENUE BY REFERRING TO GROUND NO.4 WHEREIN THE REVENUE HAS TAKEN THE GROUN D THAT LD.CIT(A) HAS ACCEPTED THE ADDITIONAL EVIDENCES IN VIOLATION OF RULE 46A O F IT RULES AND DECIDED THE ISSUE WITHOUT GIVING AN OPPORTUNITY OF BEING HEARD TO ASS ESSEE. IN SUPPORT OF THIS HE REFERRED 3 TO PARA NOS.7 AND 8 APPEARING AT PAGE 4 OF THE IMPU GNED ORDER WHICH CONTAIN THE WRITTEN SUBMISSIONS OF THE LD. COUNSEL FOR ASSESSEE BEFORE LD. CIT(A). THEREFORE, HE REQUESTED TO SET ASIDE THE MATTER TO THE FILE OF AO TO RE-DECIDE THE SAME AFRESH BY SETTING ASIDE THE ORDERS OF LD. CIT(A). 6. ON THE OTHER HAND, THE LD. COUNSEL APPEARING ON BEHALF OF ASSESSEE BY REFERRING TO THE COMPUTATION OF INCOME FILED WHICH WAS PLACED AT PAGE 21 OF THE PAPER BOOK AND AUDIT ACCOUNTS OF THE COMPANY AS SHOWN IN THE NOTES ON ACCOUNTS WHICH WAS PLACED AT PAGE-33 OF THE PAPER BOOK IN RESPECT OF FACTS THAT ASSESSEE COMPANY HAS RECEIVED ONLY RS.6,55,005/- AND THESE PAPERS ARE BEFORE AO HIMSEL F. THEREFORE HE SUPPORTED THE ORDERS OF LD. CIT(A). 7. WHEN THE BENCH ASKED THE LD. COUNSEL FOR ASSESSE E WHETHER COPY OF ARBITRATOR AWARD DATED 07.01.2006 WHICH WAS PLACED AT PAGES 4 TO 13 OF THE PAPER BOOK AND COPY OF THE LETTERS SENT BY M/S. KHAITAN & CO. TO M/S.MO HINI EXPORTS BEING NOTICE FOR INVOKING ARBITRATION WHICH WAS PLACED AT PAGES 14 T O 18 OF THE PAPER BOOK ARE BEFORE AO OR NOT. HE SUBMITTED THAT THESE TWO DOCUMENTS AR E NOT CALLED BY AO AND THEREFORE ASSESSEE HAS NOT PROVIDED THE SAME. 8. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD, IT IS OBSERVED THAT WHILE GIVI NG THE WRITTEN SUBMISSIONS BEFORE LD. CIT(A) ASSESSEE FILED THE ADDITIONAL EVIDENCE THAT IS COPY OF ARBITRATOR AWARD DATED 07.01.2006 AND COPY OF THE LETTERS SENT BY M/S.KHAI TAN & CO. TO M/S. MOHINI EXPORTS WHICH IS APPARENT FROM PARAS 7 & 8 APPEARING AT PAG E 4 OF THE IMPUGNED ORDER WHICH ARE AS UNDER :- 7) ON RENT BEING NOT PAID IN TIME/NOT BEING REALIZ ED, LEGAL PROCEEDINGS WERE INITIATED AND A DETAILED LETTER DT.16.8.2004 BY M/S KHAITAN & CO., ADVOCATES, WAS SERVED BY REGISTERED POST ON M/S MOHINI EXPORTS FOR INVOKING ARBITRATION [COPY OF LETTER IS ENCLOSED VIDE ANNEXURE NO. 5 8) COPY OF THE AWARD DT.7. 1.2006 GIVEN BY APPOINT ED ARBITRATOR IS ALSO ENCLOSED VIDE ANNEXURE 6 FOR POSSESSION IN FAVOUR OF THE APPELL ANT AS WELL AS FOR RECOVERY OF THE OUTSTANDING AMOUNT; AS SUCH, IN VIEW OF THE TERMS OF RULE 4 OF IT RULES HAVING BEEN COMPLIED, READ WITH EXPLANATION TO SUB-SECTION [1] OF SECTION 23 OF THE 1. T. ACT, AND THE AMOUNT OF REALIZED 4 RENT BEING DISCLOSED IN THE COMPUTATION OF INCOME A S WELL AS MENTIONED IN THE NOTES ON ACCOUNTS, THE AO HAS MISCONCEIVED THE FACTS BY CONS IDERING RENT RECEIVABLE AS CHARGEABLE INCOME UNDER HOUSE PROPERTY FOR THE YEAR , AND THE ADDITION OF RS.23,99, 150 THUS MADE BY HIM NEEDS TO BE DELETED. 8.1. ON CAREFUL PERUSAL OF THE ABOVE, IT IS OBSERVE D THAT EVEN THE LD. CIT(A) HAS NOT ASKED FOR THESE DOCUMENTS. HOWEVER, ASSESSEE HAS FI LED THE SAME SUO MOTO BEFORE LD. CIT(A). UNDER THESE CIRCUMSTANCES WE ARE OF THE VIE W THAT THE LD. CIT(A) IS DUTY BOUND TO GIVE EITHER AN OPPORTUNITY OF BEING HEARD TO ASSESSEE OR CALL FOR THE REMAND REPORT. HOWEVER, IN THIS CASE HE DECIDED THE ISSUE WITHOUT DOING EITHER OF THE ONE. THEREFORE, WE SET ASIDE THE ORDER OF LD. CIT(A) AN D RESTORE THE MATTER TO THE FILE OF AO TO DISPOSE OF THIS ISSUE AS PER LAW AFTER TAKING INTO CONSIDERATION OF THESE TWO DOCUMENTS AND AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO ASSESSEE. 9. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 20.04.2012. SD/- SD/- [ . , ] [ .'#., $% ] [ GEORGE MATHAN ] [ C. D. RAO ] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (#% #% #% #%) )) ) DATE: 20.04.2012. R.G.(.P.S.) $6 1 /((7 8$7*9- COPY OF THE ORDER FORWARDED TO: 1. M/S.ELITE (INDIA) PVT.LTD., 24, PARK STREET, KOLKAT A-700016. 2 THE D.C.I.T., CIRCLE-VIII, KOLKATA 3. THE CIT- 4. THE CIT(A)-VIII, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA 07 /(/ TRUE COPY, $63/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES 5