ITO, Kota V. SMT ARTI BHARGAVA, Kota

ITA 944/JPR/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5074 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 24-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: SIDDHARTH RANKA DHK
• Keywords: Unexplained investment; Depreciation; Tax effect

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF;D LN L; DS LE{K BEFORE:SHRI BHAGCHAND, AM & SHRI LALIET KUMAR, J M VK;DJ VIHY LA-@ ITA NO. 944/JP/2012 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 THE ITO WARD- 1(1), KOTA CUKE VS. SMT. ARTI BHARGAVA 1-K-58, MAHAVER NAGAR EXTENSION, KOTA LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ABWPB 0453 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT C.O. 02/JP/2013 ( VK;DJ VIHY LA-@ ITA NO. 944/JP/2012) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 SMT. ARTI BHARGAVA 1-K-58, MAHAVER NAGAR EXTENSION, KOTA CUKE VS. THE ITO WARD- 1(1), KOTA LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ABWPB 0453 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY: SHRI R.A. VERMA, ADDL.CIT -DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SIDDHARTH RANKA, ADVOCATE LQUOKBZ DH RKJH[K@ DATE OF HEARING : 11/08/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 6 /10/2016 VKNS'K@ ORDER PER LALIET KUMAR, JM THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A), KOTA DATED 31-10-2012 FOR THE ASSESSMENT Y EAR 2009-10 RAISING THEREIN FOLLOWING GROUNDS OF APPEAL. ITA NO. 944/JP/2012 THE ITO, WARD- 1(1), KOTA VS. SMT. ARTI BHARGAVA, K OTA . 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN:- (I) DELETING THE ADDITION OF RS. 12,30,000/- MADE B Y THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PROPERT Y AT 162, RAJEEV GANDHI NAGAR, KOTA . (II) DELETING THE ADDITION OF RS. 16,53,307/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PROPERT Y AT 161, RAJEEV GANDHI NAGAR, KOTA (III) RESTRICTING THE INCOME FROM PROPERTY AT 161, RAJEEV GANDHI NAGAR, KOTA FROM RS. 5,76,238/- TO RS. 5,08, 946/- 2.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS OBSERVED THAT THE DEMA ND/ TAX EFFECT IN THE REVENUES APPEAL IN QUESTION IS BELOW RS. 10.00 LA CS . UNDER THE POWERS VESTED BY SEC. 268A(1) OF THE I T ACT, CBDT HAS REC ENTLY ISSUED CIRCULARNO.21 OF 2015 DATED 10.12.2015(F NO. 279/MI SC. 142/2007-ITJ(PT) INSTRUCTING THE AUTHORITIES BELOW DEPARTMENTAL APPEAL SHOULD NOT BE FILED BEFORE ITAT WHERE THE DEMAND/TAX EFFECT DOES NOT EXCEED RS.10 LACS. THE C IRCULAR IS SPECIFICALLY MENTIONED TO BE APPLICABLE FOR ALL PEN DING APPEALS. 2.2 SUBJECT TO SOME EXCEPTIONS, IT IS FURTHER DIRE CTED BY CBDT THAT ALL THE DEPARTMENTAL APPEALS PENDING BEFORE ITAT WHERE THE DEMAND/TAX EFFECT IS LESS THAN 10 LACS SHOULD BE EITHER WITHDR AWN OR NOT PRESSED BY THE DEPARTMENTAL REPRESENTATIVES. ITA NO. 944/JP/2012 THE ITO, WARD- 1(1), KOTA VS. SMT. ARTI BHARGAVA, K OTA . 3 2.3 THE PRESENT APPEAL IS NOT COVERED BY ANY EXCEP TIONS MENTIONED IN THE SAID CBDT CIRCULAR. SINCE THE TAX DEMAND IN DIS PUTE IN THIS DEPARTMENTAL APPEAL IS BELOW THE LIMIT SET OUT BY C BDT FOR THE APPEAL THE SAME IS NOT MAINTAINABLE IN VIEW OF FORE GOINGS. AC CORDINGLY THE APPEAL OF THE DEPARTMENT IS DISMISSED AS NOT PRESSED/WITHD RAWN. 3.1 IN THE C.O., THE ASSESSEE HAS RAISED THE FOLLOW ING GROUNDS. 1. THAT THE AO HAS GROSSLY ERRED IN TREATING THE RENTAL INCOME OF RS. 2,41,250/- DECLARED BY THE ASSESSEE F ROM HOUSE PROPERTY AS INCOME FROM BUSINESS AT RS. 5,76, 238/- AND THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE SAME TO THE EXTENT AT RS. 5,08,946/- 1.1 THAT THE AO HAS ERRED IN ADDING RS. 1,70,000/- ON ACCOUNT OF HOSTEL INCOME ON ESTIMATE BASIS IGNORIN G THE DETAIL CHART OF STUDENTS SUBMITTED AND THE LD. CIT( A) HAS GROSSLY ERRED IN CONFIRMING THE SAME. ASSESSEES SH ARE BEING 50% I.E. RS. 85,000/- BE DIRECTED TO BE DELETED. 1.2 THAT THE AO HAS ERRED IN NOT ALLOWING THE MESS EXPENSES OF RS. 4,39,500/- CLAIMED BY THE ASSESSEE AND THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE SAME . ASSESSEE'S SHARE BEING 50% I.E. RS. 2,19,750/- BE D IRECTED TO BE ALLOWED. 3.2 IT IS NOTED THAT THE LD. CIT(A) HAS TAKEN INTO CONSIDERATION THE ASSESSMENT ORDER AS WELL AS THE SUBMISSIONS OF THE ASSESSEE IN HIS APPELLATE ORDER. HOWEVER, THE CONCLUSIVE OBSERVATIO N AS MADE BY THE LD. CIT(A) IN HIS ORDER IS REPRODUCED AS UNDER:- BEFORE ME, THE ASSESSEE SUBMITTED LIST OF STUDENT S AND DETAILS OF VARIOUS EXPENSES LIKE MESS, ELECTRICITY, SALARY ETC . HOWEVER, NO EVIDENCE TO ITA NO. 944/JP/2012 THE ITO, WARD- 1(1), KOTA VS. SMT. ARTI BHARGAVA, K OTA . 4 SUPPORT THE SAME WAS EITHER FURNISHED BEFORE THE A. O. OR BEFORE ME. ACCORDINGLY, THE INCOME FROM THIS PROPERTY IS ESTIM ATED AS UNDER:- TOTAL RECEIPTS AS DISCUSSED ABOVE RS. 20,00,000 /- LESS: ELECTRICITY CHARGES RS. 1,10,109/- RS. 1,10 ,109/- TOTAL RS. 18,89,891/- ASSESSEES SHARE BEING 50% RS. 9,44,945/- LESS: DEPRECIATION COST OF THE BUILDING AS PER ASSESSEE RS. 75,00,000 /- COST OF LAND RS. 23,80,000/- RS. 51,20,000/- ASSESSEES SHARE 50% I.E. RS. 25,60,000/- DEPRECIATION @ 10% RS. 25,60,000/- RS. 2,56,000/- SALARY RS. 1,80,000/- NET INCOME RS. 5,08,946/- WHILE ESTIMATING THE INCOME NO DEDUCTION FOR MESS E XPENSES WAS GIVEN AS NO EVIDENCE WAS FURNISHED EITHER BEFORE AS SESSING OFFICER OR ME. SALARY OF RS. 1,80,000/- WAS ALLOWED AS A HOSTEL CA NNOT BE RUN WITHOUT STAFF AND A SALARY OF RS. 15,000/- PM WAS CONSIDERED REAS ONABLE. THE A.O. IS THEREFORE DIRECTED TO TAKE INCOME FROM THIS PROPERTY AT RS. 5,08,946/- AS AGAINST RS. 5,76,238/- ESTIMATED BY A .O. 3.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AS REGARDS GROUND NO. 1, IT IS OBSERVED THAT THE ASSESSEE HAS CHALLENGED THE ACTION OF THE LOWER AUT HORITIES FOR ASSESSING THE INCOME FROM RUNNING OF HOSTEL AS BUSINESS INCOM E INSTEAD OF INCOME FROM HOUSE PROPERTY DECLARED BY THE ASSESSEE. CONSI DERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE LOWER AUTHORITIES HAVE RIGHTLY ASSESSED THE INCOME UNDER THE HEAD B USINESS INCOME . THEREFORE, THIS GROUND NO. 1 OF THE C.O. OF THE AS SESSEE IS DISMISSED. AS REGARDS GROUND NO. 1.1, THIS ISSUE IS RESTORED TO T HE FILE OF THE AO TO CONSIDER WHETHER THERE IS ANY EVIDENCE TO INCREAS E THE RECEIPT. IF NOT, THE ITA NO. 944/JP/2012 THE ITO, WARD- 1(1), KOTA VS. SMT. ARTI BHARGAVA, K OTA . 5 RECEIPT DECLARED BY THE ASSESSEE BE ACCEPTED AND N O ADDITION ON ACCOUNT OF INCREASE IN RECEIPT BE MADE. AS REGARDS THE GRO UND NO. 1.2, THE AO IS DIRECTED TO CONSIDER WHETHER THE MESS IS RUNNING AT THE HOSTEL BY THE ASSESSEE, IF SO, THE REASONABLE EXPENDITURE BE ALLO WED. THUS GROUND NO. 1 OF THE C.O. OF THE ASSESSEE IS DISMISSED AND GROU ND NO. 1.1 AND 1.2 OF THE C.O. OF THE ASSESSEE ARE ALLOWED FOR STATISTICA L PURPOSES. 4.0 IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED AND THE C.O. OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURP OSES. ORDER PRONOUNCED IN THE OPEN COURT ON 06 /10/2 016. SD/- SD/- HKKXPUN YFYR DQEKJ (BHAGCHAND) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 06/10/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ITO, WARD- 1(1), KOTA 2. IZR;FKHZ@ THE RESPONDENT- SMT. ARTI BHARGAVA, KOTA 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 944/JP/2012) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR