ITO WD 19(3)-2, V. JOLLY HIGHRISC CO.OP. HSG SOC. LTD,

MA 545/MUM/2010

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6422 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 25-03-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 09-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: JITENDRA SINGH PER R S SYAL A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B,MUMBAI BEFORE SHRI R.S. SYAL (AM) & SMT. ASHA VIJAYARAGHA VAN (JM) M.A.NO. 545/MUM/2010 (ARISING OUT OF I.T.A.NO.2546/MUM/2003 READ WITH TRIBUNAL ORDER IN MA NO.762/MUM/09) (A.Y. 2001-02) INCOME-TAX OFFICER, WARD 19(3)-2, ROOM NO.306, 3 RD FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI-400 012. VS. M/S. JOLLY HIGHRISE CO-O.HSG.SOCIETY LTD., 241A, PALIMALA ROAD, BANDRA (W), MUMBAI-400 050. APPLICANT RESPONDENT APPLICANT BY SHRI R.K. GUPTA. RESPONDENT BY S/SHRI K. GOPAL & JITENDRA SINGH O R D E R PER R.S. SYAL, AM : THIS MISC. APPLICATION BY THE REVENUE IS ARISING O UT OF ORDER OF THE TRIBUNAL DT. 24.03.2010 IN M.A. NO. 762/MUM/2009, WHICH IN T URN AROSE OUT OF ORDER OF THE TRIBUNAL DT. 04.04.2006 IN I.T.A.NO.2546/MUM/20 03, REQUESTING FOR RECALLING OF THE ORDER PASSED IN M.A.NO. 762/MUM/2009. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A CO-OP. HOUSING SOCIETY, WHICH EARNED INCOME OF RS.13,70,5 76/- FROM PROPERTY, SPLIT INTO TWO PARTS, VIZ, FIRST AMOUNT OF RS.8,54,900/- TOWARDS HIRING THE TERRACE AS INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND THE SECOND AMOUNT OF RS.5,17,676/- BEING MAINTENANCE AND SERVICE CHARGES RECEIVED, WHICH AMOUNT WAS SET OFF AGAINST THE TOTAL INCOME EARNED BY THE ASSESSEE SOCIETY. THE AO HELD MA NO.545/M/10 JOLLY HI GHRISE CHS LTD. 2 THAT THE ENTIRE AMOUNT OF RS.13,70,576/- WAS CHARGE ABLE TO TAX UNDER THE HEAD `INCOME FROM OTHER SOURCES, AS IT RELATED TO LEAS ING OUT A PORTION OF TERRACE. 3. WHEN THE MATTER CAME UP BEFORE THE LD. CIT(A), I T WAS HELD BY HIM THAT THE SUM OF RS.8,54,900/- BE CHARGED TO TAX UNDER TH E HEAD INCOME FROM HOUSE PROPERTY. THE REMAINING RECEIPTS OF RS.5,15,676/- WAS HELD TO BE TAXABLE UNDER THE HEAD INCOME FROM OTHER SOURCES, AGAINST WHIC H HE ALLOWED DEDUCTION OF RS.25,000/-. 4. THE ASSESSEE APPEALED AGAINST THIS ORDER OF THE CIT(A) CLAIMING THAT AD HOC DEDUCTION OF RS.25,000/- ALLOWED BY THE CIT(A) WAS INADEQUATE. THE TRIBUNAL, VIDE PARA-4 OF ITS ORDER DATED 04-04-2006 , NOTED THAT THE PROVISION OF LIFT IN A MULTI-STORYED BUILDING ALONG WITH WATC H AND WARD STAFF EXPENSES ETC. WERE ALSO TO BE CONSIDERED AS HAVING BEEN PARTLY IN CURRED FOR EARNING INCOME UNDER THE HEAD `INCOME FROM OTHER SOURCES. IT WAS HELD THAT : THEREFORE, WE DIRECT THE ASSESSING OFFICER TO ALLOW 50% OF THE CL AIM OF THE ASSESSEE AS NECESSARY EXPENDITURE TO BE INCURRED UNDER THE HEAD INCOME FROM OTHER SOURCES. AT THIS JUNCTURE IT WILL BE IMPORTANT TO MENTION THAT IN PARA-3 OF THIS ORDER, THE TRIBUNAL OBSERVED THAT THE ASSESSEE HAD CLAIMED EXPENSES OF RS.5,15,676/- TOWARDS EARNING INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. 5. THE REVENUE PREFERRED MISC. APPLICATION BEFORE T HE TRIBUNAL CONTENDING THAT THE SUM OF RS.5,15,676/- , IN FACT, REPRESENTE D RECEIPTS FROM MAINTENANCE AND SERVICE CHARGES AND NOT THE EXPENDITURE AS ERRO NEOUSLY CONSIDERED BY THE TRIBUNAL. VIDE ITS ORDER DATED 24-03-2010, THE TRIB UNAL CARRIED OUT THE MA NO.545/M/10 JOLLY HI GHRISE CHS LTD. 3 AMENDMENT TO THE EARLIER ORDER PASSED U/S.254(1) BY HOLDING THAT A SUM OF RS.5,15,676/- WAS TO BE CONSIDERED AS INCOME FROM OTHER SOURCES AND ALSO DIRECTED THAT 50% OF SUCH AMOUNT BE CONSIDERED AS N ECESSARY EXPENDITURE FOR EARNING INCOME UNDER THE HEAD INCOME FROM OTHER SO URCES. 6. THE PRESENT MISC. APPLICATION HAS BEEN FILED BY THE REVENUE PUTTING FORTH THAT THE DEDUCTION OF EXPENSES AT 50% OF THE RECEIP TS OF RS.5,15,676/- IS UNCALLED FOR INASMUCH AS THE TRIBUNAL OUGHT TO HAVE RECALLED THE ORIGINAL ORDER PASSED U/S.254(1) AND GIVEN OPPORTUNITY OF HEARING TO THE ASSESSEE AND THE REVENUE FOR MAKING A CLAIM OF EXPENSES AGAINST SUCH INCOME. 7. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD, IT IS NOTICED THAT THE MAIN GRIEVANCE OF TH E REVENUE IS AGAINST ALLOWING DEDUCTION AT THE RATE OF 50% TOWARDS EXPENSES ON RE CEIPTS OF RS.5,15,676/-. THIS PERCENTAGE FOR ALLOWING EXPENSES IS NOT IN THE AIR BUT IS BASED ON THE FINDING GIVEN BY THE TRIBUNAL IN ORDER U/S.254(1) AS QUOTED ABOVE DIRECTING THE AO TO ALLOW 50% OF THE CLAIM OF THE ASSESSEE AS NECESSARY EXPENDITURE TO BE INCURRED UNDER THE HEAD INCOME FROM OTHER SOURCES. AT VERY THRESHOLD, IT CAN BE SEEN THAT BY FILING THIS MISC. APPLICATION, THE REVENUE IS TRYING TO GET THE FINDING GIVEN BY THE TRIBUNAL U/S.254(1) VACATED, WHICH IS NOT PE RMISSIBLE AS PER LAW. FROM THE ORIGINAL ORDER PASSED BY THE TRIBUNAL U/S.254(1), I T IS MANIFEST THAT THERE WAS DIRECTION FOR ALLOWING 50% OF THE EXPENSES. NOW, TH E DEPARTMENT CANNOT IMPRESS UPON THE TRIBUNAL TO REVERSE SUCH FINDING IN THE PR OCEEDINGS U/S 254(2), THE SCOPE OF WHICH IS LIMITED TO RECTIFYING ANY MISTAKE APPARENT FROM RECORD. IT IS NOT OPEN TO THE PARTIES TO REARGUE THE CASE IN THE GARB OF RECTIFICATION PROCEEDINGS TO HAVE A FAVORABLE ORDER ON THE ISSUE, WHICH HAVE ALREADY BEEN MA NO.545/M/10 JOLLY HI GHRISE CHS LTD. 4 DECIDED BY THE TRIBUNAL. IN THE PRESENT CASE, THE T RIBUNAL, VIDE ITS ORDER U/S. 254(1), AFTER CONSIDERING ALL THE RELEVANT FACTS AN D CIRCUMSTANCES OF THE CASE, CAME TO THE CONCLUSION THAT 50% WAS REASONABLE AS THE EXPENDITURE AGAINST THE INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. IN THE ORDER PASSED U/S 254(2), THE TRIBUNAL HAS NOT DECIDED ANY NEW THING. WHEN IT WAS NOTICED THAT SOME AMOUNT WAS LIABLE TO BE TAXED UNDER THE HEAD ` INCOME FROM OTHER SOURCES, IT REPEATED THE SAME DIRECTION GIVEN IN T HE ORDER U/S 254(1) AND THAT 50% OF SUCH INCOME BE ALLOWED AS EXPENSES. IN OUR CONSIDERED OPINION, THERE IS NO MISTAKE MUCH LESS THE MISTAKE APPARENT FROM RECO RD ON THIS ASPECT IN SO FAR AS THE ORDER U/S.254(1) OR FOR THAT PURPOSE THE FIR ST ORDER PASSED BY THE TRIBUNAL U/S.254(2) ARE CONCERNED. THE LEGAL OBJECTION RAISE D BY THE LD. AR THAT IT WAS A SECOND MISCELLANEOUS APPLICATION FILED BY THE REVEN UE AND HENCE SHOULD BE DISMISSED IN LIMINE , IS LEFT OPEN AS THE INSTANT APPLICATION IS NOT MA INTAINABLE ON MERITS, AS DISCUSSED ABOVE. WE, THEREFORE, DISMISS THE MISC. APPLICATION FILED BY THE REVENUE AS BEREFT OF ANY FORCE. 8. IN THE RESULT, THE MISC. APPLICATION IS DISMISSE D. ORDER PRONOUNCED ON THE 11TH DAY OF MAY, 2011. SD/- SD/- (SMT. ASHA VIJAYARAGHAVAN) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 11TH DAY OF MAY , 2011. NG: COPY TO : MA NO.545/M/10 JOLLY HI GHRISE CHS LTD. 5 1. DEPARTMENT. 2.ASSESSEE. 3 CIT(A)-XIX,MUMBAI. 4 CIT,CITY-XIX,MUMBAI. 5.DR,B BENCH,MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST.REGISTRAR, ITAT, MUMBAI. MA NO.545/M/10 JOLLY HI GHRISE CHS LTD. 6 DETAILS DATE INITIALS DESIGN ATION 1. DRAFT DICTATED ON 06-05-11 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 06-05-11 SR.PS/ 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER *