M/s SNC Power Corporation Private Limited, Bangalore V. The Deputy Commissioner of Income Tax, Circle-12(3), Bangalore

MA 98/BANG/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4370 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 05-08-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P MISHRA
• Assessee Lawyers: V CHANDRASEKHAR
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE B BENCH, BANGALORE BEFORE SHRI N. V. VASUDEVAN, VICE PRESIDENT AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER [MP NO. 98/BANG/2020 (IN ITA NO. 65/BANG/2013)] (ASSESSMENT YEAR : 2007 08) M/S SNC POWER CORPORATION (P) LTD., APPELLANT (PRESENTLY KNOWN AS M/S SHANKARNARAYANA CONSTRUCTIONS (P) LTD.), SNC HOUSE, NO. 7, 4 TH FLOOR, RESIDENCY ROAD, (OLD NO. 9, RAJARAM MOHAN ROY ROAD), BENGALURU 560025 PAN: AAJCS7901C VS DCIT CIRCLE 12 (3), RESPONDENT BANGALORE ASSESSEE BY : SHREE V. CHANDRASEKHAR, ADVOCATE REVENUE BY : SHREE P. MISHRA, JCIT DR DATE OF HEARING : 23 10 2020 DATE OF PRONOUNCEMENT : 23 10 2020 O R D E R PER A. K. GARODIA, A.M.: THIS M. P. IS FILED BY THE ASSESSEE AND IT IS CONTENDED IN THIS M. P. THAT THERE ARE CERTAIN APPARENT MISTAKES IN THIS TRIBUNAL ORDER WHICH SHOULD BE RECTIFIED U/S 254 (2). 2. IN COURSE OF HEARING, IT WAS SUBMITTED BY THE LEARNED AR OF THE ASSESSEE THAT IN PARA 6 ON PAGE 4 OF THE IMPUGNED TRIBUNAL ORDER, THE TRIBUNAL HAS HELD THAT THERE IS NO DOUBLE DISALLOWANCE MADE BY THE AO AS CLAIMED BY THE ASSESSEE AND THIS OBSERVATION OF THE TRIBUNAL IS ON THIS BASIS THAT AS PER COMPUTATION OF INCOME AVAILABLE ON PAGE 54 OF THE PAPER BOOK FILED BY THE ASSESSEE AT THE TIME OF HEARING OF APPEAL, ALTHOUGH THE ASSESSEE DISALLOWED THE AMOUNT OF LEASE RENT RS. 6 LACS WHILE COMPUTING BUSINESS INCOME BUT IT WAS CLAIMED AS DEDUCTION WHILE COMPUTING INCOME FROM HOUSE PROPERTY. HE POINTED OUT THAT AS PER THE M. P. NO. 120/BANG/2020 2 COMPUTATION OF INCOME AVAILABLE ON PAGE 54 OF THE PAPER BOOK FILED BY THE ASSESSEE AT THE TIME OF HEARING OF APPEAL, THERE BUSINESS INCOME OF RS. 207,72,110/- AFTER MAKING DISALLOWANCE OF LEASE RENT RS. 6 LACS BUT AFTER CONSIDERING INCOME FROM HOUSE PROPERTY WHERE THE ASSESSEE HAS CLAIMED DEDUCTION FOR LEASE RENT RS. 6 LACS, THERE IS NET LOSS OF RS. 494,159/- UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND NET TAXABLE INCOME IS WORKED OUT AT RS. 202,77,951/-. THEREAFTER, HE SUBMITTED THAT AS PER PAGE 9 OF THE ASSESSMENT ORDER COPY FILED WITH APPEAL MEMO, THE AO HAS STARTED THE COMPUTATION BY TAKING THE FIGURE OF INCOME AT RS. 207,72,110/- WHICH IS AFTER MAKING DISALLOWANCE OF LEASE RENT RS. 6 LACS AND AGAIN DISALLOWED LEASE RENT RS. 6 LACS AND THEREFORE, IT IS A CLEAR CASE OF DOUBLE DISALLOWANCE OF LEASE RENT RS. 6 LACS AND IT IS AN APPARENT MISTAKE IN TRIBUNAL ORDER AND IT SHOULD BE RECTIFIED U/S 254 (2). LEARNED DR OF THE REVENUE ALTHOUGH SUBMITTED THAT THERE IS NO MISTAKE IN THE TRIBUNAL ORDER BUT HE COULD NOT POINT OUT ANY MISTAKE IN THESE ARGUMENTS OF THE LEARNED AR OF THE ASSESSEE AS NOTED ABOVE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GONE THROUGH THE MATERIAL ON RECORD. WE FIND THAT THIS IS TRUE THAT THE ASSESSEE ARRIVED AT BUSINESS INCOME OF RS. 207,72,110/- AFTER MAKING DISALLOWANCE OF LEASE RENT RS. 6 LACS AND ALTHOUGH THE ASSESSEE CLAIMED THE DEDUCTION OF LEASE RENT RS. 6 LACS WHILE COMPUTING INCOME FROM HOUSE PROPERTY BUT IT RESULTED IN NET LOSS OF RS. 494,159/- UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND NET TAXABLE INCOME IS WORKED OUT AT RS. 202,77,951/-. THIS IS ALSO TRUE THAT PAGE 9 OF THE ASSESSMENT ORDER COPY FILED WITH APPEAL MEMO, THE AO HAS STARTED THE COMPUTATION BY TAKING THE FIGURE OF INCOME AT RS. 207,72,110/- WHICH IS AFTER MAKING DISALLOWANCE OF LEASE RENT RS. 6 LACS AND AGAIN DISALLOWED LEASE RENT RS. 6 LACS AND THEREFORE, IT IS A CLEAR CASE OF DOUBLE DISALLOWANCE OF LEASE RENT RS. 6 LACS BECAUSE THE LOSS WORKED OUT AT PAGE M. P. NO. 120/BANG/2020 3 54 OF THE PAPER BOOK UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND CONSEQUENT LESSER TAXABLE INCOME WORKED OUT BY THE ASSESSEE AT RS. 202,77,951/- IS NOT GIVEN EFFECT TO BY THE AO. UNDER THESE FACTS, WE ACCEPT THAT THERE IS APPARENT MISTAKE IN TRIBUNAL ORDER IN SAYING THAT THERE IS NO DOUBLE DISALLOWANCE OF LEASE RENT RS. 6 LACS. WE RECTIFY THIS MISTAKE AND ALLOW GROUND NO. 6 RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL IN RESPECT OF PART DISALLOWANCE OF RS. 4,68,600/- OUT OF TOTAL DISALLOWANCE OF LEASE RENT RS. 6,00,000/- MADE BY THE AO BECAUSE IN PARA 9.2 OF HIS ORDER, LEARNED CIT (A) HAS ALLOWED DEDUCTION OF RS. 1,31,400/- AND IN THIS MANNER, ONLY PART DISALLOWANCE OF RS. 4,68,600/- OUT OF TOTAL DISALLOWANCE OF LEASE RENT RS. 6,00,000/- MADE BY THE AO WAS CONFIRMED BY CIT (A) WHICH IS NOW BEING DELETED BY US BECAUSE OF DOUBLE DISALLOWANCE AS DISCUSSED ABOVE. GROUND NO. 6 STANDS ALLOWED BUT ULTIMATE RESULT OF THE APPEAL AS PER ORDER DATED 20.02.2020 AS PARTLY ALLOWED REMAINS UNDISTURBED BECAUSE APART FROM GROUND NO. 6 WHICH WAS REJECTED AS PER ORIGINAL ORDER DATED 20.02.2020 BUT NOW RECTIFIED AS ALLOWED, THERE ARE OTHER GROUNDS BEING GROUND NO. 3, 5 AND 7 WHICH WERE REJECTED EARLIER AND NOW ALSO, STAND REJECTED. 4. IN THE RESULT, THE M. P. OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE NOTED ON THE CAPTION PAGE. SD/- SD/- (N. V. VASUDEVAN) (A.K. GARODIA) VICE PRESIDENT ACCOUNTANT MEMBER BANGALORE, DATED: 23 RD OCTOBER, 2020. /NS/* AKG M. P. NO. 120/BANG/2020 4 COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.