GOVIND MOTI & CO. (BUILDERS) PVT. LTD., MUMBAI V. I.T.O. 9(1)(4), MUMBAI

ITA 8269/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84508 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2014
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 15-12-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 08-12-2011
• Court: TRIBUNAL
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO.8269/MUM/2011 ASSESSMENT YEAR: -2007-08 GOVIND MOTI & CO. (BUILDERS) PVT. LTD. 1 SILVER STONE, 294, LINKING ROAD KHAR, MUMBAI- 400 052. VS.` ITO 9(1)(4) AAYAKAR BHAVAN, M.K. ROAD, MARINE LINES, MUMBAI 400 020. PAN:- AAACG1936A APPELLANT RESPONDENT ORDER PER VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 26.09.2011 OF CIT(A) ARISING FROM PENALTY ORDER PASSED U/S 271(1) (C) OF INCOME TAX ACT FOR A.Y. 2007-08. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: - THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN PARTLY SUSTAINING THE PENALTY IMPOSED BY THE ASSESSING OFFICER ON ESTIMATED ADDITIONS OF DEE MED RENTAL INCOME FROM OFFICE PREMISES OCCUPIED BY THE ASSESSEE FOR ITS BUSINESS PURPOSES. HE FAILED TO APPRECIATE THAT ALL FACTS MATERIAL TO COMPUTATION OF THE TOTAL INCOME WERE FULLY DISCLOSED AND PLACED BEFORE THE ASSESSING OFF ICER AND THERE IS NO SUPPRESSION OF ANY FACT WHICH MAY LEAD TO INITIATION OF PENALTY PROCEE DINGS. 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT A SUM OF RS. 1,24,901/- WAS CLAIMED BY THE ASSESSEE AS REIMBURSEMENT OF EXPENSES RELATING TO PREMISES AT 1, SILVER STONE, KHAR (W) O CCUPIED BY M/S IMAGING PRODUCTS INDIA P. LTD. THE ASSESSING OFFICER HELD THAT THIS WAS NOTHING BUR RENT AND ACCORDINGLY, THE ASSESSING OFFICER COMPUTED THE FAI R RENTAL VALUE OF THE PROPERTY AT ASSESSEE SHRI PRADEEP KEDIA REVENUE BY SHRI VIVEK BATRA DATE OF HEARING 15.12.2014 DATE OF PRONOUNCEMENT 15.12.2014 ITA NO.8269/MUM/2011 ASSESSMENT YEAR: -2007-08 2 | P A G E RS. 1,98,000/- AND ASSESSED THE SAME AS INCOME FROM HOSUE PROPERTY. THE SAID ADDITION MADE BY THE ASSESSING OFFICER WAS RESTRICT ED BY THE CIT(A) TO RS. 1,24,901/- BEING THE ACTUAL RECEIPT. THE ASSESSING OFFICER INI TIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) AND LEVIED THE PENALTY AGAINST THE SAID RECEIPT OF RS. 1,24,901/- BEING TREADED AS INCOME FROM HOUSE PROPERTY. 3. THE ASSESSEE CHALLENGED THE ACTION OF ASSESSING OFFICER IN LEVYING THE PENALTY U/S 271(1)(C) BEFORE CIT(A) BUT COULD NOT SUCCEED. 4. BEFORE US, THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS SUBMITTED THAT THE REGISTERED OFFICE OF THE ASSESSEE WAS SHAR ED BY THE ASSESSEE WITH M/S IMAGING PRODUCT PVT. LTD. AND ACCORDINGLY THE ASSES SEE RECEIVED A SUM OF RS. 1,24,901/- AS REIMBURSEMENT OF THE EXPENSES AND OFF ERED THE SAME TO TAX AS BUSINESS INCOME. THE ASSESSING OFFICER PROCEEDED ON A WRONG ASSUMPTION OF FACTS THAT THE PREMISES WHICH WAS IN OCCUPATION WITH M/S IMAGING P RODUCT INDIA P. LTD WAS A SEPARATE PREMISES THAN THE ASSESSEES OWN OFFICE. T HE LD. AUTHORIZED REPRESENTATIVE HAS POINTED OUT THE PREMISES USED BY THE ASSESSEE A ND THE PREMISES USED BY M/S IMAGING PRODUCT PVT. LTD IS THE SAME AND, THEREFORE , IT WAS ONLY ONE PREMISE WHICH IS OCCUPIED BY THE ASSESSEE AS WELL AS M/S IMAGING PRO DUCT INDIA PVT. LTD. THUS THE LD. AUTHORIZED REPRESENTATIVE HAS SUBMITTED THAT THOUGH THE RECEIPT OF RS. 1,24,901/- WAS ASSESSED AS INCOME FROM HOUSE PROPERTY, THE PEN ALTY IS NOT WARRANTED BY TREATING THE REIMBURSEMENT OF EXPENSES AS INCOME FR OM HOUSE PROPERTY. HE HAS POINTED OUT THAT THE ASSESSEE, SUBSEQUENT TO THE OF ASSESSMENT ORDER, FILED A RECTIFICATION PETITION U/S 154, WHEREIN, IT WAS SPE CIFICALLY POINTED OUT THAT THERE WAS ONLY ONE PROPERTY AND REGISTERED OFFICE OF ASSESSEE LOCATED AT THE SAME PREMISES AND PART OF WHICH WAS USED BY M/S IMAGING PRODUCT INDIA PVT. LTD. THIS FACTS WAS NOT CONSIDERED BY THE AUTHORITIES BELOW. ACCORDINGLY, T HE LD. AUTHORIZED REPRESENTATIVE HAS PLEADED THAT THE PENALTY LEVIED MAY BE DELETED. ITA NO.8269/MUM/2011 ASSESSMENT YEAR: -2007-08 3 | P A G E 5. ON THE OTHER HAND, THE LD. DR HAS RELIED UPON TH E ORDERS OF AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSING OFFICER HAS GIVEN THE FINDING OF FACT WHICH HAS BEEN UPHELD BY THE CIT(A). THE ASSESSEE HAS FURNISHED IN ACCURATE PARTICULARS OF INCOME BY SHOWING THE INCOME FROM HOUSE PROPERTY AS BUSINESS INCOME OR REIMBURSEMENT OF EXPENSES. 6. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD, WE NOTE THAT THE ASSESSEE HAS POINTED OUT T HIS FACT BEFORE THE AUTHORITIES BELOW AND EVEN BEFORE THE CIT(A) IN THE QUANTUM PRO CEEDINGS IN PARA 4.2 AS UNDER:- IT IS SUBMITTED THAT THERE IS ONLY ONE PROPERTY A ND THE REGISTERED OFFICE OF THE APPELLANT IS LOCATED AT THE PREMISES AND THAT P ART OF PREMISES WAS USED BY M/S IMAGING PRODUCT PVT. LTD THOUGH THERE W AS NOT WRITTEN LEASE AGREEMENT EXPENSES WERE REIMBURSED BY LESSEE AND TH ERE ARE SHOWN AS BUSINESS RECEIPTS. 7. WE FURTHER NOTE THAT THE PREMISES WHICH WAS IN T HE OCCUPATION OF M/S IMAGING PRODUCT INDIA PVT. LTD. AS WELL AS THE ASSESSEES REGISTED OFFICE IS THE SAME AND, THEREFORE, THE ASSESSEE S EXPLANATION IS SUBSTANTIATED BY TH IS FACT THAT BOTH THE ASSESSEES OFFICE AS WELL AS PREMISES IN THE OCCUPATION OF M/S IMAGING P RODUCTS INDIA P. LTD IS ONE BEARING SAME NUMBER AND ADDRESS. THEREFORE, WE FIND SUBSTAN CE IN THE SUBMISSIONS OF THE ASSESSEE THAT IT IS ONLY ONE PREMISE WHICH IS SHARE D AND OCCUPIED BY ASSESSEE AS WELL AS M/S IMAGING PRODUCTS INDIA P. LTD. THE ONLY QUESTIO N TO BE CONSIDERED WHETHER THE AMOUNT RECEIVED BY THE ASSESSEE FROM M/S IMAGING PR ODUCTS INDIA PVT. LTD IN PART OCCUPATION OF THE ASSESSEES OFFICE PREMISES TREATE D BY THE ASSESSING OFFICER AS INCOME FROM HOUSE PROPERTY AS AGAINST THE BUSINESS INCOME CLAIMED BY THE ASSESSEE WOULD AMOUNT TO CONCEALMENT OF INCOME OR FURNISHING INACC URATE PARTICULARS OF INCOME. THERE IS NO DISPUTE THAT THE ASSESSEE HAS BROUGHT OUT A C ASE THAT THE PREMISES IN QUESTION IS OFFICE PREMISES OF THE ASSESSEE WHICH IS SHARED BY THE ASSESSEE AS WELL AS M/S IMAGING PRODUCTS INDIA PVT. LTD AND THE AMOUNT RECEIVED BY THE ASSESSEE IS NOT DISPUTED. THEREFORE, MERELY BECAUSE THE ASSESSING OFFICER TRE ATED THE SAID AMOUNT AS INCOME FROM HOUSE PROPERTY INSTEAD OF REIMBURSEMENT OF EXPENSES WOULD NOT LEAD TO THE CONCLUSION ITA NO.8269/MUM/2011 ASSESSMENT YEAR: -2007-08 4 | P A G E THAT THE ASSESSEE HAS CONCEALED THE INCOME ASSESSAB LE TO TAX OR FURNISHED INACCURATE PARTICULARS OF INCOME. ACCORDINGLY, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DELETE THE PENALTY LEVIED U/S 271(1)(C). 8. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF DECEMBER 2014. SD/- SD/- ( D. KARUNAKARA RAO ) (VIJAY PAL RAO) (ACCOUNTANT MEMBER/ YS[KK LNL; YS[KK LNL; YS[KK LNL; YS[KK LNL; ) (JUDICIAL MEMBER/ U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; ) MUMBAI DATED 15-12-2014 SKS SR. P.S, COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, G BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI