NAJMA MUMTAZ HAIDER SAYED, MUMBAI V. ITO 13(3)(1), MUMBAI

ITA 9168/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56065 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-11-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 30-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P C MAURYA
• Assessee Lawyers: K GOPAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC , MUMBAI BEFORE SHIRI RAJENDRA SINGH, A.M. ITA NO. : 9168/MUM/2010 ASSESSMENT YEAR : 2007-08 MRS . NAJMA MUMTAZ HAIDER SAYED MAKKER & CO., SHOP NO.9, SHAMJI MORARJI BLDG., CHAPSHI BHIMJI ROAD, MAZGAON, MUMBAI-400 010. PAN NO : AXLPS 5282 Q VS. THE INCOME TAX OFFICER, WARD - 13 (3) (1), AAYEKAR BHAVAN, MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. GOPAL RESPONDENT BY : SHRI P. C. MAURYA DATE OF HEARING : 30 .11.2011 DATE OF PRONO UNCEMENT : 02.12.2011 ORDER PER RAJENDRA SINGH (AM) : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 15.11.2010 OF THE LD. CIT(A)-24 FOR THE ASSESSMENT YEAR 2007-08. THE ASSESSEE IN THIS APPEAL HAS RAISED DISPUTE REGARDIN G ASSESSMENT OF HOUSE PROPERTY INCOME AND ADDITION MADE ON ACCOUNT OF INCOME FROM PCO / STD. 2. THE FACTS IN BRIEF ARE THAT THE AO DURING THE AS SESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAD RECEIVED RE NT OF `. 1,28,000/- ITA NO : 9168/MUM/2010 MRS. NA JMA MUMTAZ HAIDER SAYED 2 FROM BUILDING PREMISES AND `. 60,000/- FROM SHOP PREMISES. THE ASSESSEE HAD ALSO RECEIVED A SUM OF `. 2,55,043/- FROM THE PCO. THE ASSESSEE HAD DECLARED NIL INCOME AFTER SETTING OFF THE EXPENSES. THE AO DID NOT ACCEPT THE INCOME DECLARED BY THE ASSESSEE. HE ASSESSED THE RENT RECEIVED AS INCOME FROM HOUSE PROPERTY AND A FTER ALLOWING DEDUCTION @ 30%, HE COMPUTED THE HOUSE PROPERTY INC OME AT `. 1,30,624/-. IN RELATION TO RECEIPTS FROM PCO, THE A O NOTED THAT THE ASSESSEE HAD CLAIMED EXPENSES SUCH AS SALARIES `. 1,44,000/-; TELEPHONE CHARGES OF `. 1,26,605/-; ELECTRICITY CHARGES OF `. 15,125/-; REPAIRS AND MAINTENANCE OF `. 74,462/-; MISCELLANEOUS EXPENSES OF `. 14,935/- AND CONVEYANCE EXPENSES OF `. 9,259/-. THE AO OBSERVED THAT THE ASSESSEE HAD NOT FILED THE DETAILS AND EVI DENCES IN RESPECT OF THE EXPENSES CLAIMED. HE, THEREFORE, ALLOWED THE EX PENSES ONLY TO THE EXTENT OF `. 2 LAKHS AND THE BALANCE AMOUNT OF `. 55,043/- WAS TREATED AS INCOME FROM PCO WHICH WAS ADDED TO THE TOTAL I NCOME. 3. IN APPEAL, THE CIT(A) CONFIRMED THE ORDER OF AO AGGRIEVED BY WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL . 4. BEFORE ME, THE LD. AR FOR THE ASSESSEE SUBMITTED THAT HE WAS NOT OBJECTING TO THE ASSESSMENT OF RENTAL INCOME AS HO USE PROPERTY INCOME. HOWEVER, HE STRONGLY OBJECTED TO THE SUBST ANTIAL DISALLOWANCE OF EXPENSES CLAIMED AGAINST PCO INCOME. IT WAS SUBM ITTED THAT THE ASSESSEE HAD RECEIVED RENTAL INCOME FROM THE GUEST HOUSE, IN WHICH THE PCO HAD BEEN INSTALLED FOR THE BENEFIT OF THE GUEST S. THE PCO WAS NOT OPEN TO THE PUBLIC AT LARGE AND, THEREFORE, THE ASS ESSEE WAS INCURRING LOSSES. THE DISALLOWANCE OF SUBSTANTIAL PORTION OF THE EXPENSES WAS, THEREFORE, NOT JUSTIFIED. ITA NO : 9168/MUM/2010 MRS. NA JMA MUMTAZ HAIDER SAYED 3 4.1 THE LD. DR ON THE OTHER HAND, SUPPORTED THE ORD ERS OF THE LOWER AUTHORITIES BELOW AND PLACED RELIANCE ON THE FINDIN GS GIVEN IN THEIR ORDERS. 5. I HAVE PERUSED THE RECORDS AND CONSIDERED THE RI VAL CONTENTIONS CAREFULLY. THE DISPUTE RAISED IN THIS APPEAL IS REG ARDING ASSESSMENT OF HOUSE PROPERTY INCOME AND DISALLOWANCE OF EXPENSES CLAIMED AGAINST THE INCOME FROM PCO. THE LD. AR DID NOT RAISE ANY O BJECTIONS AGAINST ASSESSMENT OF RENTAL INCOME AS HOUSE PROPERTY INCOM E. THE GROUND RAISED IN RELATION TO THE RENTAL INCOME IS, THEREFO RE, DISMISSED. AS REGARDS, THE INCOME FROM THE PCO, THERE IS NO DISPU TE THAT EXPENSES ARE NOT SUPPORTED BY FULL DETAILS AND EVIDENCES. TH E AO HAS ESTIMATED THE INCOME FROM PCO AT `. 55,043/-. CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THAT THE PCO HAD BEEN INSTALLED AT THE GUE ST HOUSE AND HAD LIMITED ACCESS TO THE PUBLIC, IN OUR VIEW, ON THE F ACTS OF THE CASE IT WILL BE APPROPRIATE TO ESTIMATE THE INCOME FROM THE PCO AT 5% OF THE RECEIPTS OF `. 2,55,043/-. THE AO WILL, THEREFORE, COMPUTE THE INC OME FROM PCO ACCORDINGLY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED ON THIS 2 ND DAY OF DECEMBER, 2011. SD/- ( RAJENDRA SINGH ) ACCOUNTANT MEMBER MUMBAI, DT: 02/12/2011 ITA NO : 9168/MUM/2010 MRS. NA JMA MUMTAZ HAIDER SAYED 4 COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, SMC - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ROSHANI