M/S. TTRUMALA ESTATES V. The Assistant Commissioner of Income Tax, Circle No. 4(1), HYDERABAD and Income Tax Officer, Ward No.1, Nirmal, ADILABAD DISTRICT

WP/6942/2006

AI Insights

The case involves M/S. TTRUMALA ESTATES, represented by Mr. A. Narsimha Reddy, challenging an order by the Assistant Commissioner of Income Tax, Hyderabad, which disallowed a claim related to the income of house property for the assessment year 2000-2001. The petitioner argued that the order was arbitrary and without jurisdiction, leading to a writ petition under Article 226 of the Constitution of India. The Income Tax Appellate Tribunal (ITAT) had previously reversed similar disallowances for subsequent years, which was not contested by the Revenue. The High Court, referencing these ITAT decisions, quashed the impugned order to the extent it disallowed the interest on the partners' loan account.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 681647 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 07-11-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B NARASIMHA SHARMA; J V PRASAD
• Assessee Lawyers: SHAIK BASHA
• Keywords: Assessment Year; House property; Income Tax; ITAT; Writ of Mandamus; Interest on Partners Loan
• Section: 148; 143(3); 151

Judgement Text

"[ 337e ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE SEVENTH DAY OF NOVEMBER TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO: 6942 OF 2006 Between: M/S. TTRUMALA ESTATES, 3-6-262, Himayathnagar, Hyderabad, Rep. Managing Partner, Mr. A. Narsimha Reddy. by its .....PETlTtOl{ER AND 'l . The Assistant Commissioner of lncome Tax, Circle No. 4(1) HYDERABAD- 2. lncome Tax Officer, Ward No.1, Nirmal, ADILABAD DISTRICT. .....RESPONDENTS Petition Under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue writ of Mandamus or any other appropriate writ, order or direction declaring the action of the '1't respondent in passing the order dated 27- 1-2006 under Section 143(3) of lncome Tax Act, 1961 for the assessment year 2OOO-2001 treating the income of the house property by disallowing the claam of the petitioner as arbitrary, contrary to the Provisions of the lncome Tax Act, without jurisdiction and also insubordination and consequently set-aside the proceedings of the 1't respondent as null and void and also declare the action of the respondents in issuing the notices under Section 148 of the lncome Tax Act for the assessment years 2002-2003 to 2005-2O06 to the petitioner and also to all the partners for the years 2000-01 to 2005-06 is not justified. l.A.NO:1 OF 2006(WPMP. NO: 8935 OF 2006) Petition Under Section 151 CPC praying that in the crrcumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant stay of all further proceedings pursuant to the orders of the '1'r respondent dated 27-1-2006 for the assessment year 2000-2001 and also issuing notices under Section 148 of the Act by the Respondents for the assessment years 2000-01 to 2005-2006 to the petitioner and partners pending disposal of the above writ petition, as other wise the petitioner will be put to severe loss and hardship. Counsel for the Petitioner : SRI SHAIK JEELANI BASHA Counsel for the Respondents : SRI B.NARASIMHA SHARMA, ADVOCATE FOR sRl J.V.PRASAD (SC FOR TNCOME TAX) The Court made the following ORDER THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUI(ARAMJI WRIT PEIITION No.6942 0F 20,0,6 JUDGMEI{T: (per Hon'ble Si Jt.stice P.SAM KoSHy) The challenge under the present Writ petition is to the impugned order, dated 2Z .0L.2006 passed by respondent No. 1 under Sectionl43(3) of Income Tax Act, 196l (for short \"the Act, 196l\"l for the Assessment year 200O_O I . 2- The petitioner seems to be aggrieved by the order of respondent No.l in taxing the income of the house property by disallowing the claim of the petitioner as arbitrary- 3. Today, when the matter is taken up for hearing, the learned counsel for the petitioner submits that in case of the Assessee itself the Income Tax Tribunal, (for short ,.the I.T.A.T.1 for the subsequent years till now has reversed the order of the Assessing Officer, whereby the petitioner's claim for allowing expenses under the head of interest of partner loan was disallowed by the Assessing Ofhcer, which was 2 PSr,J & r{rR,J W.P.No.6942 ol 2006 subsequently set-aside by the I'T'A'T' in all the subsequent Assessment Years. 4. Subsequently, the petitioner has brought on record few of the orders passed by the I'T'A'T' in respect of the petitioner itself for the subsequent years 2OO2-O3' 2OO3'O4 ' 2OO4-O5 and also in respect of the Assessment Years 2O17-i8 and 2}la-19 uide orders, d'ated 26'04'2017 and 25'05'2023 respectively. It has not been questioned by the Revenue any further and the petitioner has been extended the benefrt of treating the interest on the house property as interest on partners loan account. 5. The aforesaid submissions made by the learned counsel for petitioner and the subsequent orders passed by the I T-A'T' have not been disputed by the learned Senior Standing Counsel representing the Income Tax Department' In view of the same' we are inclined to allow the Writ Petition to the aforesaid extent by quashing the order, dated 27 'Ol '2C,O6 so far as the disallowance by the Assessing Oflicer so far as the interest on thc partners loan 3 6 PSK,J &, IfTR\"J W.P.No.6942 oJ 2006 account is concerned that pertains to the interest received from the house property. In view of the aforesaid circumstances, the impugned order, dated 27.01-2006 for rhe Assessment years 2OOO_01 stands set-aside/quashed to the aforesaid limited extent in terms of the decision rendered by the I.T.A.T. in the afore referred orders pertaining to the petitioner for the subsequent Assessment years 7. In the result, the Writ petition stands allowed. There shall be no order as to costs- Consequently, miscellaneous applications pending, if any, shall stand closed. That Rule Nisi has been absotute as above' I witn\"\"s the Hon'ble the Ghief Justice ALOK ARADHE' on this / i;il;;il-s;;;ilh dav of November, Two rhousand and rwentv three' SD/.C. PRAVEEN KUMAR ASSISTANT REGISTRAR //TRUE COPY/, *ynt/ SECTION OFFICER To 1. The Assistant Commissioner of lncome Tax' Cir.cle No{l ), Hyderabad' ,: iil; i;;;; iaiottic\"t, ward No'1' Nirmal' Adilabad District' i: d; cc i;-srishaik Jeelani Basha, AdvocalelQeucl ;. o;; cc io stl J.V.priiaa (SC FoR lNcoME rAx) [oPUC] 5. Two CD CoPies SA BS i I I HIGH COURT DATED:0711112023 ORDER WP.No.6942 of 2006 ALLOWTNG THE W.P i [7o'it2t23 rC $E STAr€ Z o * * oiisrrr,l C WITHOUT COSTS. d nu-- Y4 .)t/7 I I I I l @4* "