MAYURA INDUSTRIAL ENTERPRISES ,BANGALORE vs. INCOME TAX OFFICER, WARD 3(2)(1), BANGALORE

ITA 2693/BANG/2025Status: DisposedITAT Bangalore29 September 2026AY 2015-164 pages
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What were the facts?

The assessee, Mayura Industrial Enterprises, a partnership firm, filed its return of income for Assessment Year 2020-21 on 13.12.2020, declaring a total income of Rs. 7,16,330/-. The case was selected for reassessment, and a notice under section 148 was issued on 27.03.2024. The assessee filed a revised return on 23.04.2024, showing the same income. During reassessment, the Assessing Officer (AO) noted that M/s. Korrun India Pvt. Ltd. paid Rs. 24,80,091/- as rent to the assessee, while the assessee declared Rs. 22,96,389/-. The AO treated the entire Rs. 24,80,091/- as income from house property, making an addition of Rs. 17,76,964/- after deductions. The CIT(A) upheld the AO's order, dismissing the assessee's appeal for failure to produce the partnership deed.

What did the Tribunal hold?

The Tribunal acknowledged that the assessee submitted a reconciliation statement for rental receipts net of GST and provided details of gross and net amounts. However, the assessee failed to produce the partnership deed to substantiate its claim of being in the business of renting out commercial premises. Consequently, the Tribunal found that the AO was justified in treating the income as income from house property. Nevertheless, in the interest of substantial justice, the Tribunal granted the assessee one more opportunity to furnish the partnership deed before the CIT(A). The Tribunal also agreed with the assessee's contention that the taxable rental income should be Rs. 22,96,389/-, excluding the GST portion. The matter was remitted back to the CIT(A) for re-determination of total income based on these directions. The grounds raised by the assessee were allowed for statistical purposes.

What were the issues?

1. Whether the rental income received by the assessee should be characterized as business income or income from house property, as per Section 44AD of the Income Tax Act, 1961. 2. Whether the amount of rental income to be taxed should be Rs. 24,80,091/- or Rs. 22,96,389/-, considering the GST component. Assessee's arguments: The assessee contended that it is in the business of letting out commercial premises as a warehouse, thus treating the income as business income under Section 44AD. They argued that the AO erred in considering the gross amount paid by the lessee, as it included GST, which is not taxable. The assessee also stated that a reconciliation statement was furnished, showing rental income net of GST, and that the partnership deed could not be located as the business had closed. Revenue's arguments: The Revenue relied on the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 44AD,Section 148,Section 133(6),Section 24(a)

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Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI BALAKRISHNAN S & SHRI SOUNDARARAJAN K.

For Respondent: Shri. Pradeep S - Addl. CIT
Pronounced: 29.09.2026

PER SHRI BALAKRISHNAN S, ACCOUNTANT MEMBER:

This appeal is filed by the assessee against the order of Ld. CIT(A)NFAC vide DIN: ITBA/NFAC/S/250/2025-26/1081284300(1) dated 29-Sep-2025 for the Assessment Year 2020-21. 2. Briefly stated, facts of the case are assessee, a partnership firm, filed its return of income on 13.12.2020, admitt

The order continues below.

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