SINUJ VIJAYAN,VADAKKENCHERRY V. ITO,WARD2, PALAKKAD

ITA 806/COCH/2024

AI Insights

The case involves Sinuj Vijayan, an individual engaged in the business of dealing in cement, iron & steel, and roofing material under the name M/s. Vijay Steels. For the Assessment Year 2017-18, Vijayan filed a return declaring an income of Rs. 7,13,040. The Assessing Officer (AO) later made an addition of Rs. 3,00,000 to the income, which was contested. Subsequently, the AO issued a notice under section 154, proposing an addition of Rs. 2,76,000 as rent payable, which was contested as it was an inherited property and not a revenue receipt. The CIT(A) dismissed the appeal without proper consideration of the submissions. The Tribunal, after hearing the Senior Departmental Representative and reviewing the records, concluded that the AO's order under section 154 was not justified and quashed it.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 47011 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Keywords: Rectification of order
• Section: 154

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM ITA No. 806/Coch/2024 Assessment Year: 2017-18 Sinuj Vijayan .......... Appellant Vijay Steels, Bus-Stand, Vadakkencherry Palakkad 678683 [PAN: ASNPV3671K] vs. The Income Tax Officer, Ward-2 .......... Respondent Aayakar Bhavan, English Chruch Road Palakkad 678001 Appellant by: ------- None ------- Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 12.03.2025 Date of Pronouncement: 09.04.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 08.08.2024 for Assessment Year (AY) 2017-18. 2. Brief facts of the case are that the appellant is an individual engaged in the business of dealing in cement, iron & steel and roofing material in the name and style of M/s. Vijay Steels. The return of income for AY 2017-18 was filed on 27.10.2017 declaring total income Rs.7,13,040/0-. Against the said return of income, the assessment was completed by the Assessing Officer (AO) vide order dated 22.08.2019 at 2 ITA No. 806/Coch/2024 Sinuj Vijayan a total income of Rs. 10,13.040/- after making addition of Rs. 3,00,000/- on account of disallowance of expenditure claimed. 3. Subsequently the AO issued notice u/s. 154 of the Act on 16.07.2021 proposing to make addition of rent payable at Rs. 2,76,000/- credited to the capital account of the appellant. In reply to the said notice, the appellant submitted that the said sum represents the rent payable to grandmother of the appellant as the properties were inherited by him and the rent was payable on account of inheritance of properties from grandmother under will and said sum does not represent revenue receipt. However, the AO disagreeing with the submission, proceeded with passing of the order u/s. 154 of the Act vide order dated 02.08.2021 making addition of Rs. 2,76,000/-. 4. Being aggrieved by the rectification order, appeal was filed before the CIT(A), who vide the impugned order dismissed the appeal by passing a cryptic order without adverting to the ground of appeal and the statement of facts and written submissions of the appellant which were extrcted by him from page Nos. 1 to 7 of the order. 5. Being aggrieved, the appellant is in appeal before the Tribunal in the present appeal. 6. When the appeal was called on nobody appeared on behalf of the assessee despite due service of notice of hearing. Therefore, I proceeded to dispose of the appeal after hearing the learned Sr. DR. 7. On perusal of the impugned order passed by the AO u/s. 154 of the Act, it would be clear that the AO sought to make addition of rent 3 ITA No. 806/Coch/2024 Sinuj Vijayan payable of Rs. 2,76,000/- credited to the capital account of the appellant in the proceedings u/s. 154 of the Act. There is no material on record to suggest that the amount of rent payable calls for addition. I do not find any mistake apparent from record which is being capable of being rectified u/s. 154 of the Act. Therefore, the AO ought not have exercised jurisdiction u/s. 154 of the Act. Accordingly the order passed u/s. 154 of the Act is hereby quashed. 8. In the result, the appeal filed by the assessee stands allowed. Order pronounced in the open court on 9th April, 2025. Sd/- (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 9th April, 2025 n.p. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin "