JESAL CO OP HSG SOCIETY LTD, MUMBAI V. ITO WD 24(2)(2), MUMBAI

ITA 7353/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9438 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-07-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 14-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HEMALATHA
• Assessee Lawyers: DR P DANIEL
• Keywords: Opportunity of being heard
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER ITA NO.7353/MUM/2016 (ASSESSMENT YEAR 2012-13) JESAL CO-OP.HSG.SOCIETY LTD., SHREENATH NAGAR, JESAL GILBERT HILL, ANDHERI (W) MUMBAI 400 058. PAN:AAAAJ 5368B ...... APPELLANT VS. THE INCOME TAX OFFICER, WARD 24(2)-2, MUMBAI. .... RESPO NDENT APPELLANT BY : DR. P.DANIEL RESPONDENT BY : MS. HEMALATHA DATE OF HEARING : 10/07/2017 DATE OF PRONOUNCEMENT : 06/10/2017 ORDER THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTA INING TO ASSESSMENT YEAR 2012-13 IS DIRECTED AGAINST AN ORDER PASSED BY CIT(A)-39 MUMBAI DATED 23/09/2016, WHICH IN TURN, ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 30/03/2015. 2. IN THIS APPEAL, ALTHOUGH THE ASSESSEE HAS RAIS ED MULTIPLE GROUNDS OF APPEAL, BUT THE SUBSTANTIVE DISPUTE REVOLVES AROUND THE ACTION OF THE ASSESSING 2 ITA NO.7353/MUM/2016 (ASSESSMENT YEAR 2012-13 OFFICER TREATING AN AMOUNT OF RS.14,49,110/- RECEIV ED M/S.VIOM NETWORK LTD. AS INCOME TAXABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT THE APPELL ANT IS A CO-OPERATIVE HOUSING SOCIETY AND IN THE COURSE OF ASSESSMENT PRO CEEDINGS THE ASSESSING OFFICER NOTED THAT ASSESSEE HAD SHOWN, INTER-ALIA, RENTAL INCOME RS.9,93,110/- AND RS.4,56,000/- AS SERVICE CHARGES, TOTALLING TO RS.14,49,110/- AS RECEIVED FROM M/S.VIOM NETWORK LTD. THE ASSESSI NG OFFICER ALSO NOTICED THAT ASSESSEE HAD CLAIMED CERTAIN EXPENDITURE AGAIN ST THE SERVICE CHARGES INCOME ON THE GROUND THAT SUCH INCOME WAS INCOME F ROM OTHER SOURCES. ACCORDING TO THE ASSESSING OFFICER, IT WAS A RENTAL INCOME AND THEREFORE, IT WAS TO BE TAXED UNDER THE HEAD INCOME FROM HOUSE PROPE RTY AND ACCORDINGLY, AFTER ALLOWING THE STATUTORY ALLOWANCES UNDER SECTI ON 24 OF THE ACT, HE ASSESSED INCOME FROM HOUSE PROPERTY AT RS. 14,49,11 0/-AND AFTER ALLOWING BASIC DEDUCTION OF RS.50,000/-, HE ASSESSED THE TOT AL INCOME AT RS.9,64,377/-. THE CIT(A) HAS ALSO AFFIRMED THE STAND OF THE ASSES SING OFFICER BY NOTICING THAT WHERE THE INCOME IS FROM RENTING OF SPACE TO HOST THE ANTENNAS ON THE TERRACE / ROOF SPACE, AND WHICH SPACE IS CERTAINLY A PART OF THE BUILDING, THE RENT CAN ONLY BE TAXED AS INCOME FROM HOUSE PROPER TY. 4. BEFORE ME, THE LD.REPRESENTATIVE FOR THE ASSESS EE HAS POINTED OUT THAT THE ASSESSEE DOES NOT DISPUTE THAT THE INCOME EARNE D FROM ALLOWING USE OF THE BUILDING PREMISES IS ASSESSABLE AS INCOME UNDER TH E HEAD HOUSE PROPERTY, BUT IN THE PRESENT CASE, RELEVANT FACTS HAVE NOT BEEN A PPROPRIATELY APPRECIATED. FIRSTLY, IT POINTED OUT THAT ASSESSEE HAD RECEIVED A SUM OF RS.15.00 LACS FROM M/S.VIOM NETWORK LTD. IN TERMS OF TWO CONCURRENT AG REEMENTS DATED 26/02/2011. IN TERMS OF A LEAVE AND LICENCE AGREE MENT, ASSESSEE RECEIVED A SUM OF RS.4,50,000/- FOR ALLOWING THE SPACE FOR PU TTING THE ANTENNA AND 3 ITA NO.7353/MUM/2016 (ASSESSMENT YEAR 2012-13 ANOTHER SUM OF RS.4,50,000/- IN TERMS OF SERVICE AG REEMENT OF EVEN DATE, WHICH WAS EARNED FOR PROVIDING VARIOUS SERVICES MEN TIONED THEREIN. THE LD.REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT SO FAR AS INCOME FROM THE LEAVE AND LICENCE AGREEMENT IS CONCERNED, ASSESSEE HAD NO OBJECTION, IF THE SAME IS ASSESSED AS INCOME UNDER THE HEAD INCOME F ROM HOUSE PROPERTY. SO HOWEVER, THE AMOUNT RECEIVED IN TERMS OF SERVICE AGREEMENT IS CONCDERNED, THE SAME IS ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES AFTER ALLOWING THE RELEVANT EXPENSES. THE LD.REPRESENTATI VE FOR THE ASSESSEE POINTED OUT TO THE SALIENT FEATURES OF THE TWO AG REEMENTS IN THIS REGARD AND PRAYED THAT SINCE RELEVANT FACTS HAVE NOT BEEN CULL ED OUT AT THE LEVEL OF THE LOWER AUTHORITIES, THE MATTER MAY BE SET-ASIDE TO T HE FILE OF ASSESSING OFFICER FOR APPROPRIATE DECISION. 5. THE PLEA OF THE ASSESSEE FOR REMANDING THE MATTE R BACK TO THE FILE OF THE ASSESSING OFFICER HAS NOT BEEN SERIOUSLY OPPOSED BY THE LD. DEPARTMENTAL REPRESENTATIVE, WHO HAS OTHERWISE REITERATED THE ST AND OF THE ASSESSING OFFICER. 6. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND AFTE R PERUSING THE RELEVANT AGREEMENTS, IN TERMS OF WHICH ASSESSEE HAD RECEIVED THE IMPUGNED AMOUNTS, IT IS QUITE CLEAR THAT A PART OF THE AMOUNT HAS BEE N RECEIVED ON ACCOUNT OF RENTAL ARRANGEMENT FOR THE SPACE AND PARTLY IT IS F OR RENDERING SERVICES. IN FACT, THE ASSESSING OFFICER IN PARA- 3 OF HIS ORDER HAS N OTED THAT ASSESSEE HAS CREDITED IN ITS INCOME & EXPENDITURE ACCOUNT, INTER -ALIA, BY TWO SEPARATE ENTRIES NAMELY RENTAL INCOME AND SERVICE CHARGES. BE THAT AS IT MAY, I AGREE WITH THE PLEA OF THE ASSESSEE THAT THE FACTS WHICH ARE APPROPRIATE TO DECIDE THE CONTROVERSY AS TO UNDER WHICH HEAD OF INCOME TH E RESPECTIVE INCOMES ARE TAXABLE, DO NOT EMERGE FROM THE ORDERS OF THE LOWER AUTHORITIES. THEREFORE, IN 4 ITA NO.7353/MUM/2016 (ASSESSMENT YEAR 2012-13 THE INTEREST OF JUSTICE AND FAIR PLAY, I DEEM IT F IT AND PROPER TO SET-ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER TO THE FILE OF ASSESSING OFFICER, WHO SHALL CULL OUT APPROPRIATE FACTS AND, THEREAFTER DECIDE THE CONTROVERSY AS PER LAW. NEEDLESS TO SAY, THE ASSESSING OFFICER SHALL ALLO W THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD IN SUPPORT OF ITS STAND AND ONLY THEREAFTER, HE SHALL PASS AN ORDER ON THE AFORESAID ASPECT AS PER LAW. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 06/10/2017 SD/- (G.S.PANNU) ACCOCUNTANT MEMBER MUMBAI, DATED 06/10/2017 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI