Alpesh Kantilal Panchal, Ahmedabad V. The ADIT, CPC, Bengaluru Present Juridiction The ITO, Ward-3(2)(1), Ahmedabad

ITA 96/AHD/2023

AI Insights

The case involves Alpesh Kantilal Panchal, the appellant, contesting an order from the CIT(A), National Faceless Appeal Centre, which upheld the addition of Rs.4,44,000 to the business income for the Assessment Year 2020-21. This amount was initially considered as rental income under 'income from house property' and was also included in the business income. The appellant argued that this led to double taxation of the same income. The Tribunal agreed with the appellant, noting that the rental income was already accounted for in the audited Profit & Loss account under 'income from house property' and should be allowed as a deduction from the business income.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129483 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-05-2023
• Assessment Year: 2020-2021
• Appeal Filed On: 13-02-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Rectification of order; Principle of natural justice
• Section: 154; 143(1)

Judgement Text

ITA No.96/Ahd/2023 Assessment Year: 2020-21 Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.96/Ahd/2023 Assessment Year: 2020-21 Alpesh Kantilal Panchal, vs. ADIT, CPC, Bangalore, 51/52, Rachna Estate, Present Jurisdiction Behind Abhushan Jewellers, Income Tax Officer, Saijpur, Ward – 3(2)(1), Bogha, Ahmedabad. Ahmedabad – 382 350. [PAN – AGMPP 5144 N] (Appellant) (Respondent) Assessee by : Shri Ashok Dhariwal, AR Revenue by : Shri N.J. Vyas, Sr. DR Date of hearing : 03.05.2023 Date of pronouncement : 10.05.2023 O R D E R This appeal is filed by the Assessee against order dated 15.12.2022 passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2020-21. 2. The Assessee has raised the following grounds of appeal :- “1. The order passed by learned CIT (Appeals)(NFAC) and u/s.154 by CPC for Assessment Year 2020-21 is illegal, unlawful and against the principles of natural justice. 2. On the facts and in the circumstances of the case and in law, the CIT(Appeals)(NFAC) has grossly erred in not allowing the deduction of Rs.4,44,000/- being rental income from profits and gains from business and profession and the same amount of rent was considered under the head income from house property in the computation of income. Since the rental income of Rs.4,44,000/- was shown in audited profit and loss account of the proprietorship firm M/s. Leo Engineering Enterprises and considered under the head income from house property, same be allowed for deduction from business income. In view of above facts and circumstances of the case, the addition of Rs.4,44,000/- being rental income deducted under the head profits and gains from business and profession and computed under the head income from house property, the addition be deleted.” ITA No.96/Ahd/2023 Assessment Year: 2020-21 Page 2 of 3 3. The assessee received intimation under Section 143(1) of the Income Tax Act, 1961 thereby making addition of Rs.4,44,000/- in business income which was claimed as deduction in computation of income being rental income considered separately under the head “income from house property”. The assessee claimed deduction of Rs.4,44,000/- being rental income from the business profit shown under the head “income from business and profession”. The assessee filed rectification application dated 13.11.2021 but on 08.03.2022 order under Section 154 of the Act was passed thereby not allowing deduction of rental income from business income. 4. Being aggrieved by the rectification order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that the income of Rs.4,44,000/- being rental income was considered separately by the assessee under the head income from house property and, therefore, claimed deduction as the same is shown as business profit under the head income from business and profession. The Assessing Officer has taxed the said amount twice which is not allowable. The Ld. AR further submitted that the CIT(A) has accepted the fact that the assessee has already shown the same as rental income under the head income from house property but the CIT(A) did not consider the audited Profit & Loss account whether income was separately shown as which was deducted under business income and the same was shown under the head income from house property. The Ld. AR submitted that the assessee already shown the rental income under the head income from house property which included in audited Profit & Loss account of the Firm M/s. Leo Engineering Enterprises and the same should have been allowed as deduction from business income. 6. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). 7. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the CIT(A) has accepted that the assessee has shown the rental income under the head income from house property but at the same time in respect of audited Profit & Loss account, the income was shown as separate and deducted from the business income. Since it was included in audited Profit & Loss account of the Firm M/s. Leo Engineering Enterprises, the same should have been allowed as deduction from income. The Assessing Officer has taxed the said ITA No.96/Ahd/2023 Assessment Year: 2020-21 Page 3 of 3 amount twice in the intimation under Section 143(1) of the Act. The Assessing Officer was also not right in rejecting the rectification application. The CIT(A) failed to appreciate that since the rental income was shown in audited Profit & Loss account of the proprietorship firm M/s. Leo Engineering Enterprises, the same should have been considered under the head income from house property and has to be allowed for deduction from business income. 8. In the result, appeal of the assessee is allowed. Order pronounced in the open Court on this 10 th day of May, 2023. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 10 th day of May, 2023 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad