What did the Tribunal hold?

The Tribunal found merit in the assessee's contention that the CPC's calculation was incorrect. The Tribunal determined that after considering the correct deductions and business losses, the assessee's net income was below the basic tax exemption limit.

The assessee, a Private Specific Trust, filed its return declaring Nil income. The CPC processed the return under Section 143(1) and raised a tax liability by reducing the declared house property income. The assessee appealed to the CIT(A) which was dismissed.

What were the issues?

Whether the Income Tax CPC correctly computed the assessee's income under Section 143(1) by not allowing the full deductions on house property income and setting off business losses.

Amitabh Jalan Family Trust vs A.D.I.T., CPC, Bengaluru | ITAT Kolkata 2023

Income Tax Appellate Tribunal, “C(SMC

Before: DR. MANISH BORAD, HON’BLE & SHRI SONJOY SARMA, HON’BLE

For Appellant: Shri K.M. Roy, A/R

Hearing: 03/05/2023Pronounced: 22/05/2023

O R D E R

PER SONJOY SARMA, JUDICIAL MEMBER :

This is the appeal preferred by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi, (hereinafter referred to as the ld. CIT(A)”], passed u/s 250 of the Income-tax Act, 1961 (hereinafter the ‘Act’), dated 12/09/2022 for the Assessment Year 2020-21.

The brief facts of the case are that the assessee is a Private Specific Trust and filed its return of income for the Assessment Year in question on 29/12/2020 declaring total income at Rs. Nil. While doing so, assessee has declared gross rent from house property at Rs.4,72,668/-, which resulted Rs.3,30,68/- as income from house property after standard deduction of 30% and assessee has also declared business loss of Rs. (-) 3,34,510/- resultantly net income has been shown at zero after setting off of the business losses of Rs.(-)3,642/- has been carried forward. However, in the return, assessee has computed business loss of Rs.(-)3,34,510/- after Assessment Year: 2020-21 Amitabh Jalan Family Trust 2 claiming house property income of Rs.8,08,956/- under the heading “income/receipts credited to profit and loss account considered under other heads of income”. However, while processing the return such claim of house property income under the heading “income/receipts credited to profit and loss account considered other heads of income” has been reduced to Rs.4,72,668/- instead of Rs.8,08,956/- resultantly it has led to net income of Rs. 3,30,68/- with aggregate tax liability of Rs. 1,07,203/- upon the assesse.

Aggrieved by the above order, assessee preferred appeal before ld. CIT(A). However, same was dismissed. Dissatisfied with the above order, assessee preferred appeal before this Tribunal raising multiple grounds of appeal

before this Tribunal.

4. At the time of hearing, ld. A/R submitted before the Bench that the revised computation of income alleging that the calculation arrived by CPC was wrong and due to this, there would be no tax liability upon the assessee. To substantiate his claim, ld. A/R submitted before us that income from house property as calculated by CPC of Rs.8,08,956/-, then also assessee’s income is below basic tax exemption limit of Rs.2.5 Lakhs and no tax liability is envisaged since it is a Private Trust. Here in the case of assessee if house property income is taken into consideration at Rs.8,08,956/- in that event cumulative deduction @30% would be Rs.2,42,686/- then also income from house property would be Rs.5,66,269/- and assessee also declared business net loss of Rs.3,44,510/- by setting off which net income comes upto Rs.2,31,769/- only which is below basic tax limit of Rs.2.5 Lakhs as prescribed under Act. Therefore, no tax liability is envisaged upon the assessee and, therefore, order passed by the CPC u/s 143(1) requires to be set aside.

AMITABH JALAN FAMILY TRUST,KOLKATA vs. A.D.I.T., CPC, BENGALURU, BENGALURU

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