M/s Y.D. Solutions, Chandigarh V. ITO, W-4(5), Chandigarh

ITA 852/CHANDI/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2335 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 05-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V K KATARIA
• Keywords: Business income
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH SMC CHANDIGARH , ! BEFORE: SMT. DIVA SINGH, JUDICIAL MEMBER ./ ITA NO. 852/CHD/2018 !' # $# / ASSESSMENT YEAR : 2014-15 Y.D.SOLUTIIONS, 2133, SECTOR 38-C, CHANDIGARH. VS THE ITO, WARD 4 (5), CHANDIGARH. ./ PAN NO: AABFY0386N / APPELLANT / RESPONDENT / ASSESSEE BY : NONE / REVENUE BY : SHRI V.K.KATARIA, SR.DR / DATE OF HEARING : 29.05.2019 !'#$%& / DATE OF PRONOUNCEMENT : 21.06.2019 %&/ ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSAILING THE CORRECTNESS OF THE ORDER DATED 07.03.2018 OF CIT(A) -2, CHANDIGARH PERTAINING TO 2014-15 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : I) THAT THE LD. CIT (A) HAS ERRED ON LAW AND FACTS IN CONFIRMING THE ASSESSMENT OF RENTAL INCOME FROM COMMERCIAL COMPLEX OF THE APPELL ANT UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' INSTEAD OF THE CORRECT HEAD 'INCOME FROM BUSINESS'. THE CONCLUSION DRAWN BY THE LD.A.O IS BASED ON SURMISES . WHEREAS THE BUSINESS, OF THE APPELLANT AS PER THE OBJECT CLAUSE OF THE PARTNERSH IP DEED, IS TO PROVIDE SPACE SOLUTION BY RENTING OF THE COMPLEX. HENCE IT IS PRA YED THAT SUCH INCOME OF THE APPELLANT BE ASSESSED UNDER THE HEAD 'INCOME FROM B USINESS'. II) THAT THE LD. CIT (A) HAS ERRED IN LAW BY CONFIR MING THE ADDITIONS OF RS. 87,53,486 BEING THE DIFFERENCE BETWEEN EXPENSES CLAIMED BY TH E APPELLANT AS PER AUDITED PROFIT & LOSS ACCOUNT AND EXPENSES AS ALLOWED BY THE LD. A .O U/S 24 (RS.3,24,98,672 MINUS RS.2,37,45,186 ALLOWED U/S 24). HENCE, IT IS PRAYED THAT THE ADDITION OF RS. 87,53,486 BE DELETED. III) THAT THE LD. CIT (A) HAS ERRED ON LAW AND FACT S IN TREATING THE INCOME FROM ELECTRICITY RELATED SERVICES OF RS.3,45,410 INCLUDE D IN THE GROSS RECEIPTS OF RENTAL INCOME AS INCOME FROM OTHER SOURCES WHEREAS THIS IN COME IS PART OF INCOME FROM BUSINESS. HENCE, IT IS PRAYED THAT THE INCOME FROM ELECTRICITY RELATED SERVICES PERTAINING TO THE BUSINESS OF THE APPELLANT BE TREA TED AS BUSINESS INCOME. ITA 852/CHD/2018 A.Y. 2014-15 PAGE 2 OF 3 IV) THAT THE APPELLANT RESERVES THE RIGHT TO ALTER, ADD OR DELETE ANY GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. AT THE TIME OF HEARING, NO ONE WAS PRESENT ON BE HALF OF THE ASSESSEE. THE APPEAL WAS PASSED OVER. IN THE SECOND ROUND AL SO, NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. THE RECORD SHOWS THAT IN T HE APPEAL FILED ON 05.06.2018, ON THE THREE OCCASIONS THE APPEAL CAME UP FOR HEARING, THE ASSESSEE HAS REMAINED UNREPRESENTED. 3. A PERUSAL OF THE RECORD SHOWS THAT THE CIT(A) HA S PASSED THE ORDER RELYING UPON THE PAST HISTORY OF THE ASSESSEE. IT IS SEEN THAT IN 2013-14 ASSESSMENT YEAR I.E. IN THE IMMEDIATELY PRECEDING A SSESSMENT YEAR IDENTICAL ISSUE WAS DISMISSED BY THE ITAT VIDE ITS ORDER DATE D 06.08.2018 IN ITA 435/CHD/2017. IT IS FURTHER SEEN THAT IN 2012-13 AS SESSMENT YEAR IN ITA 1513/CHD/2018, THE CO-ORDINATE BENCH VIDE ORDER DAT ED 07.05.2019 DISMISSED THE ASSESSEE'S APPEAL TAKING NOTE OF THE FACT THAT DESPITE ISSUANCE OF NOTICE, THE ASSESSEE HAS REMAINED UNREPRESENTED. A PERUSAL OF THE ORDER DATED 06.08.2018 IN 2013-14 ASSESSMENT YEAR SHOWS T HAT SIMILAR ARGUMENT WAS ADVANCED I.E. THAT IN 2012-13 ASSESSMENT YEAR, RENTAL INCOME HAS BEEN ACCEPTED BY THE REVENUE WHICH ARGUMENT HAS BEEN NOT ED IN THE FOLLOWING MANNER IN PARA 15 WITH THE FOLLOWING OBSERVATIONS : 15. AS FOR THE CONTENTION OF THE LD.COUNSEL FOR T HE ASSESSEE THAT IN THE PRECEDING YEAR THE RENTAL INCOME EARNED HAD BEEN ACCEPTED BY THE REVENUE AS ASSESSABLE UNDER THE HEAD BUSINESS AND PROFESSION IN SCRUTINY ASSESSMENT ,WE FIND NO MERIT IN THE SAME. WE HAVE GONE THROUGH THE ORDER PASSED IN THE PRECEDING YEAR U/S 143(3) AND FIND THAT THE INCOME RETURNED BY THE ASSESSEE W AS ACCEPTED AS SUCH WITH NO DISCUSSION ON THE ISSUE OF HEAD UNDER WHICH THE REN TAL INCOME WAS ASSESSABLE . EVEN THE LD.COUNSEL FOR THE ASSESSEE HAS BEEN UNA BLE TO POINT OUT WITH EVIDENCE THAT THE ISSUE WAS INQUIRED INTO DURING ASSESSMENT PROCEEDINGS. THEREFORE WE HOLD THAT NO BENEFIT CAN BE DERIVED BY THE ASSESSEE FROM THE ORDER PASSED U/S 143(3) IN THE PRECEDING YEAR T O THE EFFECT THAT THE RENTAL INCOME HAD BEEN ACCEPTED AS ASSESSABLE UNDER THE HEAD BUSI NESS AND PROFESSION. IN VIEW OF THE ABOVE, GROUND NOS.(I) & (II) RAISED BY THE ASSESSEE ARE DISMISSED. (EMPHASIS SUPPLIED) 4. THE SR.DR RELIES ON THE ORDER. 5. CONSIDERING THE FACTS ON RECORD IN THE ABSENCE O F ANY MATERIAL ON RECORD WHICH WOULD JUSTIFY MODIFYING THE IMPUGNED O RDER GROUND NO. 1 AND 2 OF THE APPEAL COVERED AGAINST THE ASSESSEE ARE DISM ISSED. ITA 852/CHD/2018 A.Y. 2014-15 PAGE 3 OF 3 6. IT IS SEEN THAT THE ISSUE RAISED IN GROUND NO. 3 DOES NOT HAVE PAST HISTORY AND ARISES FOR THE FIRST TIME. IT IS SEEN THAT QUA THE SAME, THE CIT(A) HAS GIVEN THE FOLLOWING FINDING IN PARA 7.3 : 7.3 I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF TH E CASE. IT IS NOT THE BUSINESS OF THE ASSESSEE TO COLLECT AND PAY ELECTRICITY AND WAT ER CHARGES. THE AMOUNT OF RS 3,45,450/- IS THE DIFFERENCE BETWEEN THE AMOUNT COLLECTED FROM TH E TENANTS AND THE AMOUNT PAID TO THE ELECTRICITY AND WATER DEPARTMENT. THIS IS CLEARLY ' INCOME FROM OTHER SOURCES' AND I FIND NO INFIRMITY IN THE ORDER OF THE AO IN THIS REGARD. GR OUND OF APPEAL NO. 2 IS DISMISSED. 7. THE LD. SR.DR RELIES ON THE ORDER. 8. IN THE ABSENCE OF ANY ARGUMENT OR REBUTTAL ON FA CTS, THERE IS NO JUSTIFICATION TO VARY THE CONCLUSION DRAWN. THE VI EW TAKEN BY THE CIT(A) IN THE FACTS AS THEY STAND IS UPHELD. 9. THE RECORD SHOWS THAT EVEN OTHERWISE, THE APPEAL DESERVES TO BE DISMISSED ON THE GROUNDS OF NON-REPRESENTATION AS T HE ASSESSEE IN THE FACTUAL BACKGROUND AS ADDRESSED MAY NOT BE SERIOUS IN PURSU ING THE APPEAL FILED AS THE ASSESSEE DESPITE ISSUANCE OF NOTICES HAS REMAIN ED UNREPRESENTED. SUPPORT IS FROM THE ORDER OF THE ITAT DELHI BENCHES IN THE CASE OF CIT VS MULTIPLAN INDIA PVT. LTD. (1991) 38 ITD 320 AND THE DECISION OF HON'BLE MADHYA PRADESH HIGH COURT IN THE CASE OF LATE SHRI TUKOJI RAO HOLKAR VS WEALTH TAX COMMISSIONER 223 ITR 480 (MP) ETC. 10. BEFORE PARTING, IT IS APPROPRIATE TO ADD THAT I N THE EVENTUALITY THE ASSESSEE IS ABLE TO SHOW THAT THERE WAS A REASONABL E CAUSE FOR NON- APPEARANCE ON THE DATE OF HEARING, IT WOULD BE AT L IBERTY TO PRAY FOR A RECALL OF THIS ORDER BY MAKING AN APPROPRIATE PRAYER. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST JUNE,2019. SD/- ( ) (DIVA SINGH) ! / JUDICIAL MEMBER ) ' '( )* +*% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT -3. , / CIT4. , ( )/ THE CIT(A) 5. *-. / , /& , 012.3 / DR, ITAT, CHANDIGARH 6. .2 4 / GUARD FILE '( / BY ORDER, 5 / ASSISTANT REGISTRAR