ITO, New Delhi V. Sh. Chander Chauhan, New Delhi

ITA 833/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3487 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-07-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 26-02-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income
• Section: 143(3); 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `B: NEW DELHI BEFORE SHRI C.L.SETHI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER I.T. A. NO.833/DEL/2010 ASSESSMENT YEAR : 2006-07 INCOME-TAX OFFICER, SH. CHANDER CHAUHAN, WARD 36(4), NEW DELHI. VS. FLAT NO.95-C, POCKET -IV, MAYUR VIHAR, PHASE-I, DELHI. PAN: ADXPC5681P (APPELLANT) (RESPONDENT ) APPELLANT BY: SHRI ROHIT GARG, SR. DR. RESPONDENT BY: SHRI RAKESH KUMAR, CA. O R D E R PER C.L. SETHI, JUDICIAL MEMBER: THE ONLY GROUND RAISED BY THE REVENUE IN THIS APPEA L AGAINST THE ORDER DATED 4.11.2009 PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) PERTAINING TO THE ASSESSMENT YEAR 2006-07 , IS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO TREAT THE O THER INCOME SHOWN BY THE ASSESSEE AS INCOME FROM OTHER SOURCES AND TO ALLOW EXPENSES CLAIMED AGAINST THE SAME U/S 56 OF T HE I.T. ACT. 2. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. IN THIS CASE, THE ASSESSEE FILED HIS RETURN OF INCOME SHOWING TOTAL INCOME AT RS.2,19,405/- ON 31.07.2006. THE ASSESSEE FURNISHE D A SALARY CERTIFICATE IN 2 FORM NO.16, WHERE AN AMOUNT OF RS.11,37,050/- WAS A LSO INCLUDED AS OTHER INCOME. IN THE RETURN, THE ASSESSEE CLAIMED THE AF ORESAID AMOUNT OF RS.11,37,050/- AS BUSINESS INCOME AND SHOWN NET PRO FIT THEREFROM ONLY AT RS.1,13,275/-. THE AO COMPLETED THE ASSESSMENT UND ER SEC. 143(3) BY TREATING THE AFORESAID AMOUNT AS INCOME ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES. THE VARIOUS EXPENSES CLAIMED BY THE ASSESSEE AGAINST THE AFORESAID INCOME WERE NOT ALLOWED BY THE ASSESS ING OFFICER. THE ASSESSEE CLAIMED THAT THE AFORESAID AMOUNT WAS RECE IVED BY THE ASSESSEE FROM THE CUSTOMERS OF THE HOTEL AND AT THE SAME TIM E, HE HAD INCURRED CERTAIN EXPENDITURE TOWARDS LABOUR AND CONVEYANCE CHARGES, DJ CHARGES AND SOME OTHER INCIDENTAL EXPENDITURE. 4. ON AN APPEAL, THE LEARNED CIT(A) HELD THAT THE A FORESAID OTHER INCOME SHOWN BY THE ASSESSEE IS TO BE TREATED AS INCOME FR OM OTHER SOURCES AND THE EXPENSES CLAIMED AGAINST THE SAME HAVE TO BE ALLOWE D UNDER SEC. 56 OF THE ACT. THE LEARNED CIT(A) THEREFORE, DIRECTED THE AO TO TREAT SUCH INCOME AS INCOME FROM OTHER SOURCES AND ALLOW THE EXPENSES AG AINST THE SAME AS CLAIMED BY THE ASSESSEE. 5. HENCE, THE DEPARTMENT IS IN APPEAL. 6. IN THE COURSE OF HEARING OF THIS APPEAL, IT WAS POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT IDENTICAL ISS UE HAD ARISEN IN THE CASE OF 3 ITO VS. SHRI MOHAN CHANDER PALIWAL IN ITA NO.3326/D EL/2009, WHERE ITAT DELHI BENCH `E, NEW DELHI VIDE ORDER DATED 30 .04.2010, HAS RESTORED THE MATTER TO THE FILE OF THE AO BY OBSERVING AS UN DER:- 8. WE FIND THAT THE ABOVE SUBMISSIONS BEFORE THE L D. CIT(A) WERE NOT AT ALL BEFORE THE ASSESSING OFFICER. IN O UR CONSIDERED OPINION WHEN ASSESSEE IS MAKING SUBMISSION BEFORE T HE LD. CIT(A), WHICH WERE NOT BEFORE THE ASSESSING OFFICER AND HIS SUBMISSIONS ARE NOT IN AGREEMENT WITH THE LETTER FR OM THE EMPLOYER RECEIVED BY THE ASSESSEE, IT WAS INCUMBENT UPON THE LD. CIT(A) TO ASK FOR A REMAND REPORT FROM THE ASSE SSING OFFICER. FURTHERMORE, THE METHOD OF OPERATION, AS CLAIMED BY THE ASSESSEE COULD ALSO HAVE BEEN ENQUIRED FROM THE EMPLOYER HOTEL MAURYA SHERATON. THE PREVALENT TREND IN THE INDUSTRY COULD ALSO HAVE BEEN REFERRED TO IN THIS REGARD. IT IS NOT THE CASE THAT LD. CIT(A) HAS HIMSELF EXAMINED THE CLAIM OF EXPENSES MADE BY THE ASSESSEE. THE ASSESSING OFFICER HAD NO T EXAMINED THE CLAIM OF EXPENDITURE AND HAD REJECTED THE SAME AT THE THRESHOLD BY HOLDING THAT THE SAME NEED NOT HAVE BE EN INCURRED. THAT THE ASSESSEE RECEIVED RS.2,02,478/- AS SALARY AND RS.10,23,255/- AS TIPS IS ALSO A MATTER REQUIRI NG PROPER EXAMINATION. ASSESSING OFFICER WAS ALSO NOT RIGHT IN CONCLUDING WITHOUT FURTHER EXAMINATION THAT ASSESSE E DID NOT NEED TO INCUR THE EXPENSES TO EARN THAT EXTRA INCOM E CALLED TIPS. 9. HENCE, IN OUR CONSIDERED OPINION, IN THE INTERES T OF JUSTICE, THE MATTER NEEDS TO BE REMITTED TO THE FIL ES OF THE ASSESSING OFFICER. ACCORDINGLY, THE MATTER STANDS REMITTED TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER THE S AME AFRESH IN VIEW OF OUR FOREGOING OBSERVATIONS. NEEDLESS TO ADD , ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEA RD. 7. RESPECTFULLY FOLLOWING THE AFORESAID ORDER, WE R ESTORE THIS MATTER BACK TO THE FILE OF THE AO FOR HIS EXAMINATION IN THE LI GHT OF THE OBSERVATION MADE BY THE TRIBUNAL IN THE CASE OF SHRI MOHAN CHANDER P ALIWAL (SUPRA). THE 4 ASSESSING OFFICER SHALL PROVIDE REASONABLE OPPORTUN ITY OF BEING HEARD TO THE ASSESSEE. WE ORDER ACCORDINGLY. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S TREATED TO BE ALLOWED FOR A STATISTICAL PURPOSE. 9. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT I MMEDIATELY AFTER THE HEARING WAS OVER ON 27 TH JULY, 2011. SD/- SD/- (B.C. MEENA) (C.L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27 TH JULY, 2011. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR, ITAT.